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TMI Blog2023 (7) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... Disallowance of bad debts written off - HELD THAT:- As decided in assessee own case assessee has successfully discharged its onus and has fulfilled the conditions laid down U/S 36 of the Act. We, therefore, do not find any reason why the write off of bad debts should not be allowed. Appeal decided in favour of the assessee. - ITA No. 1763/Del./2022 - - - Dated:- 14-7-2023 - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Himanshu S. Sinha, Advocate, Shri Bhuwan Dhoopar, Advocate And Shri Parash Bishwal, Advocate For the Revenue : Shri Jitender Kumar, CIT DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is arising out of the order of Assessing Officer passed pursuant to the directions of Dispute Resolution Panel (DRP) for the assessment year 2017-18. 2. The grounds of appeal taken by the assessee read as under :- 1. That, on the facts and circumstances of the case and in law, the Ld. AO erred in assessing the total income of the Appellant for the relevant A Y at Rs. 28,18,68,060/- as against the returned income of Rs. 11,00,28,920/-. 2. That, on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble DRP/ Ld. AO/ Ld. TPO erred in determining the Arm's Length Price ( ALP ) of Forward Transition Support Service Charges at NIL by rejecting the Transactional Net Margin Method ( TNMM ) applied by the Appellant and applying Comparable Uncontrolled Price method ( CUP ) and making an upward adjustment of Rs. 8,92,28,190/-. 9. That, on the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. AO/ Ld. TPO erred in inappropriately categorizing the services to be in the nature of stewardship activities and suspecting the credibility of the services without appreciating the evidences and documents filed by the Appellant to demonstrate the nature of services availed by the Appellant from its Associated Enterprise and, thereby, determining the ALP to be NIL. 10. That, on the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. AO/ Ld. TPO exceeded its jurisdiction by applying the cost benefit analysis in determining the ALP of Forward Transition Support Service Charges and also erred in not following the binding precedent laid down by the jurisdictional High Court in the case of CIT v. EKL Appliances [2012J 345 ITR 241 (Delhi), w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was held that any amount paid in excess of the 'net assets' acquired, shall constitute goodwill which is eligible for depreciation. 17. That, on the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. AO erred in disallowing the expenditure claimed by the Appellant on account of bad debts of Rs. 2,10,43,511 written off during the A Y under consideration. 18. That, on facts and circumstances of the case and in law, the Hon'ble DRP/ Ld. AO/ Ld. TPO grossly erred in not following the settled principles of judicial propriety by not appreciating that the issue of disallowance of bad debts written off is squarely covered in favour of the Appellant by the order of this Hon'ble Tribunal in Appellant's own case for the preceding AYs 2015-16 and 2016-17. 19. That, on facts and circumstances of the case and in law and sans any change in facts and circumstances of the case vis-a-vis the preceding AYs 2015-16 and 2016-17, the Hon'ble DRP/ Ld. AO/ Ld. TPO grossly erred in not following the principle of consistency as laid by the Hon'ble Supreme Court of India in the case of Radhasaomi Satsang v. CIT [1992] 193 ITR 321 (SC). 20. That, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each group holding 50% share in it. Prior to 01.07.2014, Global Business Travel (GBT), was the corporate travel segment of Amex. 6. In March 2014, as per an agreement entered into between Amex and GBT III BV, Amex spun off its travel business segment and transferred GBT assets, operations, employees and shares of certain Amex affiliates to GBT III BV. Pursuant to a business transfer agreement between American Express India Pvt Ltd (AEIPL) and the assessee, corporate travel business division of AEIPL was transferred to the assessee vide a slump sale on a going concern basis effective from 01.06.2014. In lieu of the same, the appellant had paid a consideration of Rs 45,48,85,303/- to AEIPL. 7. At the outset, in this case, ld. Counsel of the assessee submitted that all the three issues involved are duly covered in favour of the assessee by the decision of ITAT in its own case for AYs 2015-16 2016-17. Ld. Counsel of the assessee summarized his submissions as under :- S.No. Grounds Submissions 1. Transfer Pricing adjustment made on account of transition support services (Rs.8,92,28,190) (G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced below: 31. In so far as the depreciation of good will is concerned, this issue is by now well settled by the decision of the Hon'ble Supreme Court in the case of Smifs Securities Ltd 348 ITR 203 wherein the Hon'ble Apex Court has held that good will acquired on amalgamation [being the difference between cost of assets and consideration paid} is a capital right and thus eligible for depreciation u/s 32 of the Act. 32. Considering the facts of the case in totality, in the light of decision of the Hon'ble Supreme Court [supra}, we direct the Assessing Officer to allow claim of depreciation. This ground is, accordingly, allowed. (please refer 991-993 of the PB) Relying on this decision, this Hon'ble Tribunal decided this issue in favour of the Appellant in A Y 2016-17 as well (please refer pages 998,1001 and 1018 of the PB). 3. Disallowance of bad debts written off (Rs.2,10,43,511/-) (Ground No.4 and 6) This issue is covered in favour of the Appellant by the decision of this Hon'ble Tribunal in Appellant's own case for preceding 2 years (A Y 2015-16 and 2016-17) The Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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