9911796707
TMI Blog2017 (12) TMI 1867X X X X Extracts X X X X X X X X Extracts X X X X ..... h the AEs and non- AEs, and the non-AE transaction satisfy the internal TNMM. The AO, therefore, ought to have considered them for arriving at the ALP. Therefore, we deem it fit and proper to remit this issue to the file of the AO with a direction to consider only the operating profit/operating cost of AE transactions and also to consider internal TNMM where the services rendered by the assessee are similar both to AEs and non-AEs. Accordingly, grounds of appeal Nos.3 to 3.4 are treated as allowed for statistical purposes. Denial of deduction u/s 10A on the ground that Form No.56F was not filed along with the return of income - HELD THAT:- It is seen from the assessment order, that the assessee has filed e-return and there is no possibility of filing Form No.56F along with the e-return of income. It is also seen that the assessee has filed Form No.56F during the assessment proceedings and before completion of the assessment. As in the case of American Data Solutions India (P) Ltd [ 2014 (2) TMI 128 - KARNATAKA HIGH COURT] has held that the appellate proceedings are the continuation of the assessment proceedings and if Form No.56F is filed during the course of appellate pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee submitted that the assessee does not wish to press ground of appeal No.2 against the reference to the special audit, since the assessee did not raise any such objection before the AO. Ground of appeal No.2 is accordingly rejected. 3. In addition to the above, the assessee has also raised an additional ground of appeal against the AO/DRP treating the amount of Rs.14,98,43,680 incurred at the overseas branches towards salaries allowances as covered by Explanation-2(iv) of section 10A and reducing the same from export turnover only for the purpose of computation of deduction u/s 10A of the Act. In addition to the above, the assessee also filed an application for admission of additional evidence in the form of audited segmental results for the purpose of T.P. adjustment. 4. Brief facts of the case are that the assessee company, engaged in rendering of engineering consulting services, e-filed its return of income for the A.Y 2009-10 on 30.09.2009 on the basis of pre-audited books declaring a total income of Rs.2,89,85,608. Subsequently, after getting its accounts audited, the assessee filed the revised return of income on 30.03.2010 declaring a total income of Rs.3,15,81,76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for determination of ALP adjustment, it is only AE transactions which have to be taken into consideration and not the transactions with non-AEs also. He submitted that the assessee had transactions with the AEs as well as non-AEs and therefore, the transaction with the non-AEs provided good comparables for arriving at the ALP of the similar transaction with AE s and therefore, the learned Counsel for the assessee prayed that the AO/TPO may be directed to consider the income and the operating profit/operating cost of the AE transactions only for the purpose of ALP determination and also to consider the internal TNMM as the most appropriate method. In support of his contention, the learned Counsel for the assessee placed reliance upon various decisions, particularly of Mumbai Bench of the Tribunal in the case of Twinkle Diamonds (ITA No.8107 8358/Mum/2011) dated 6th May, 2013, wherein it was observed that the TP adjustment is required to be made only with respect to AE transactions and therefore, the computation was required to be made only with respect to the operating expenses attributable to the sales to the AEs. Further, the learned Counsel for the assessee also placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed during the course of appellate proceedings, the same should be considered, as the requirement to file the Form 56F along with the return of income is only directory and not mandatory. Respectfully following the same, AO is directed to consider Form No.56F and allow deduction u/s 10A of the Act, provided the assessee, otherwise fulfills all the other conditions prescribed u/s 10A of the Act. Thus, ground of appeal No.4 is treated as allowed for statistical purposes. 13. As regards Ground No.5, the AO observed from the special audit report that the assessee has debited an amount of Rs.14,78,987 which pertains to the accounting years ended on 31.03.2004 and 31.03.2005 relevant to the financial years 2003- 04 2004-05 respectively and that the amount of Rs.6,50,591 pertains to the accounting year ended on 31.03.2006 relevant to the financial year 2006-07. Based on these observations of the special audit, the assessee was asked to show-cause as to why the prior period expenditure aggregating to Rs.21,29,578 should not be disallowed. The assessee, vide letter dated 20.08.2013, submitted that Rs.14,78,987 is the amount outstanding in the account of Collins Aikman Corporation w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax in the relevant A.Y, the claim of the assessee for the A.Y 2009-10 shall be allowed, as it is not disputed that Collins Aikman Corporation has become bankrupt during the relevant financial year. As regards the amount receivable from SCSL and written off by the assessee, the assessee has not been able to produce any evidence in support of the same either before the authorities below or before us. Therefore, this addition is confirmed. Thus, ground of appeal No.5 is partly allowed. 17. As regards the additional ground of appeal, we find that this is connected to ground of appeal No.4 against the denial of deduction u/s 10A of the Act on the ground that Form No.56F was not filed along with the return of income. Since we have already remitted this issue to the file of the AO for examination of the deduction u/s 10A, we deem it fit and proper to admit the additional ground as all the relevant facts are on record and remand this issue also to the file of the AO with direction to consider the same while examining the assessee s claim of deduction u/s 10A of the Act. In view of the same, the additional ground of appeal is treated as allowed for statistical purposes. 18. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
