M/S. HYUNDAI WIA INDIA PVT. LTD.,KANCHIPURAM vs. DCIT, CORPORATE CIRCLE-1(1), CHENNAI

PER MANU KUMAR GIRI, JM: This appeal has been preferred by the assessee against the final assessment order bearing DIN & Order No. ITBA/AST/S/143(3)/2024- 25/1066517355(1) dated 09.07.2024 passed by the Assessing Officer (“AO”)

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. pursuant to the directions issued by the Dispute Resolution Panel (“DRP”) vide pursuant to the directions issued by the Dispute Resolution Panel (“DRP”) vide pursuant to the directions issued by the Dispute Resolution Panel (“DRP”) vide

F.No.147/DRP-2/Bang/2023 2/Bang/2023-24 dated 20.06.2024 for the Assessment Year 2 24 dated 20.06.2024 for the Assessment Year 2020-

21.

advanced thereon, the same does not require adjudication and is dismissed. advanced thereon, the same does not require adjudication and is dismissed. advanced thereon, the same does not require adjudication and is dismissed.

corporate tax issues. At . At the outset, the learned Authorised Representative (“Ld. the outset, the learned Authorised Representative (“Ld.

AR”) submitted that certain transfer pricing grounds are consequential and would AR”) submitted that certain transfer pricing grounds are consequential and would AR”) submitted that certain transfer pricing grounds are consequential and would

become academic if the principal issues are decided in favour of the assessee. become academic if the principal issues are decided in favour of the assessee. become academic if the principal issues are decided in favour of the assessee.

Grounds of Appeal. 4. The Assessee has raised the following The Assessee has raised the following Grounds of Appeal.

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. 5. The assessee was incorporated on 01.03.2010 as a wholly owned The assessee was incorporated on 01.03.2010 as a wholly owned The assessee was incorporated on 01.03.2010 as a wholly owned

subsidiary of Hyundai Wia Corporation, South Korea. The manufacturing facility subsidiary of Hyundai Wia Corporation, South Korea. The manufacturing facility subsidiary of Hyundai Wia Corporation, South Korea. The manufacturing facility

of the assessee is located at Chennai, India. The assessee is engaged in the of the assessee is located at Chennai, India. The assessee is engaged in the of the assessee is located at Chennai, India. The assessee is engaged in the

business of manufacturing drive shafts business of manufacturing drive shafts for four-wheelers and also renders market wheelers and also renders market

support services, including after support services, including after-sales support, to its Associated Enterprises sales support, to its Associated Enterprises

(“AEs”). The assessee operates under two segments: The assessee operates under two segments:

• Manufacturing Segment Manufacturing Segment • Market Support Services Segment (“MSS”) Market Support Services Segment (“MSS”)

international transactions with its Associated Enterprises (AEs). The Ld AR international transactions with its Associated Enterprises (AEs). The Ld AR international transactions with its Associated Enterprises (AEs). The Ld AR

submitted that it had adopted TNMM as the most appropriate method for submitted that it had adopted TNMM as the most appropriate method for submitted that it had adopted TNMM as the most appropriate method for

benchmarking the international transaction and the Assesse benchmarking the international transaction and the Assessee had reported the e had reported the

following results: -

Transfer Pricing Method Transfer Pricing Method PLI Assessee’s Weighted average Weighted average Margin arithmetic mean of arithmetic mean of comparable companies comparable companies TNMM (manufacturing segment) TNMM (manufacturing segment) Operating 4.33% 4.57% Profit/ Operating cost TNMM (MSS segment) TNMM (MSS segment) 23.53% 11.43% (OP/OC)

TNMM for both the segments and concluded that the margins earned in MSS TNMM for both the segments and concluded that the margins earned in MSS TNMM for both the segments and concluded that the margins earned in MSS

segment is at arm’s length. However, the TPO has recomputed the margins of segment is at arm’s length. However, the TPO has recomputed the margins of segment is at arm’s length. However, the TPO has recomputed the margins of

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. the Assessee in the manufacturing segment by excluding export incentives i.e. the Assessee in the manufacturing segment by excluding export incentives i.e. the Assessee in the manufacturing segment by excluding export incentives i.e.

MEIS scrip income and duty draw back income as non MEIS scrip income and duty draw back income as non-operating income and operating income and

also by included three more comparable companies in the final list of also by included three more comparable companies in the final list of also by included three more comparable companies in the final list of

comparables. The TPO also rejected t comparables. The TPO also rejected the Assesseee’s claim on depreciation cost he Assesseee’s claim on depreciation cost

adjustment. Accordingly, the TPO has determined the margin of the Assessee in adjustment. Accordingly, the TPO has determined the margin of the Assessee in adjustment. Accordingly, the TPO has determined the margin of the Assessee in

manufacturing segment to be at 1.76% against 8 comparable companies margin manufacturing segment to be at 1.76% against 8 comparable companies margin manufacturing segment to be at 1.76% against 8 comparable companies margin

of 4.73% to 6.91% with a median of 5.66%.Since the Assessee m of 4.73% to 6.91% with a median of 5.66%.Since the Assessee m of 4.73% to 6.91% with a median of 5.66%.Since the Assessee margin did not

fall within the range, the TP adjustment was proposed on the difference between fall within the range, the TP adjustment was proposed on the difference between fall within the range, the TP adjustment was proposed on the difference between

the margin of the Asseesse (i.e. 1.76%) and the median of comparable the margin of the Asseesse (i.e. 1.76%) and the median of comparable the margin of the Asseesse (i.e. 1.76%) and the median of comparable

companies (i.e.5.66%).The TPO vide order dated 22.02.2023 determined the companies (i.e.5.66%).The TPO vide order dated 22.02.2023 determined the companies (i.e.5.66%).The TPO vide order dated 22.02.2023 determined the

quantum of adjustment at Rs.8,17,27,919/. A draft assessment order dated t at Rs.8,17,27,919/. A draft assessment order dated t at Rs.8,17,27,919/. A draft assessment order dated

25.09.2023 was passed by the Assessing Officer incorporating the TP 25.09.2023 was passed by the Assessing Officer incorporating the TP 25.09.2023 was passed by the Assessing Officer incorporating the TP

adjustment. The Assessee filed its objections before the DRP, along with adjustment. The Assessee filed its objections before the DRP, along with adjustment. The Assessee filed its objections before the DRP, along with

additional ground on working capital adjustment. The DRP issue additional ground on working capital adjustment. The DRP issue additional ground on working capital adjustment. The DRP issued directions

dated 20.06.2024 upholding the action/order of the TPO rejecting the additional dated 20.06.2024 upholding the action/order of the TPO rejecting the additional dated 20.06.2024 upholding the action/order of the TPO rejecting the additional

ground. Aggrieved by the final assessment order, the Assessee has preferred the ground. Aggrieved by the final assessment order, the Assessee has preferred the ground. Aggrieved by the final assessment order, the Assessee has preferred the

above appeal before us.

by referring to the findings of lower authorities. Our attention has been drawn to by referring to the findings of lower authorities. Our attention has been drawn to by referring to the findings of lower authorities. Our attention has been drawn to

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. various documents as placed in paper book, case law compendium and the various documents as placed in paper book, case law compendium and the various documents as placed in paper book, case law compendium and the

extract of annual report of comparable companies. The Ld. CIT extract of annual report of comparable companies. The Ld. CIT extract of annual report of comparable companies. The Ld. CIT-DR also

advanced arguments and supported the findings of TPO / DRP. Having heard and supported the findings of TPO / DRP. Having heard and supported the findings of TPO / DRP. Having heard

rival submissions and upon perusal of case records, our adjudication is as under. rival submissions and upon perusal of case records, our adjudication is as under. rival submissions and upon perusal of case records, our adjudication is as under.

The core issues which fall for our primary consideration are: The core issues which fall for our primary consideration are:

a) Treatment of export incentives as operating income while Treatment of export incentives as operating income while Treatment of export incentives as operating income while computing the margin of Assessee margin of Assessee b) Considering the working capital adjustment claimed by the Assessee. Considering the working capital adjustment claimed by the Assessee. Considering the working capital adjustment claimed by the Assessee.

Scheme (MEIS) scrip income and duty drawback income as non Scheme (MEIS) scrip income and duty drawback income as non Scheme (MEIS) scrip income and duty drawback income as non-operating

income while computing the margins of the Appellant. income while computing the margins of the Appellant.

export incentives of Rs. 6.24 crores under the Merchandise Exports from India export incentives of Rs. 6.24 crores under the Merchandise Exports from India export incentives of Rs. 6.24 crores under the Merchandise Exports from India

Scheme (‘MEIS’) of the Government of India. The sa Scheme (‘MEIS’) of the Government of India. The same was considered as me was considered as

operating in nature while computing the operating margins of the assessee. operating in nature while computing the operating margins of the assessee. operating in nature while computing the operating margins of the assessee.

According to the Ld. AR, the incentive received under the MEIS Scheme was in According to the Ld. AR, the incentive received under the MEIS Scheme was in According to the Ld. AR, the incentive received under the MEIS Scheme was in

the nature of export incentive which was provided to augment the regular the nature of export incentive which was provided to augment the regular the nature of export incentive which was provided to augment the regular

business operations of the assessee and to encourage its exports, designed to perations of the assessee and to encourage its exports, designed to perations of the assessee and to encourage its exports, designed to

reward exporters. These rewards are given by the way of duty credit scrip to reward exporters. These rewards are given by the way of duty credit scrip to reward exporters. These rewards are given by the way of duty credit scrip to

exporters. The Ld. AR showed us that, the basis and manner of disbursement of exporters. The Ld. AR showed us that, the basis and manner of disbursement of exporters. The Ld. AR showed us that, the basis and manner of disbursement of

MEIS subsidy was directly linked MEIS subsidy was directly linked with the quantum of exports made by the with the quantum of exports made by the

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. assessee. The Ld AR also explained that these scrips are utilized by the assessee. The Ld AR also explained that these scrips are utilized by the assessee. The Ld AR also explained that these scrips are utilized by the

Assessee only to pay the basic customs duty on imports and also demonstrated Assessee only to pay the basic customs duty on imports and also demonstrated Assessee only to pay the basic customs duty on imports and also demonstrated

it based on the bill of entry and related workings. The Ld. AR als it based on the bill of entry and related workings. The Ld. AR als it based on the bill of entry and related workings. The Ld. AR also took us

through the provisions of Section 28 of the Act and showed us that the through the provisions of Section 28 of the Act and showed us that the through the provisions of Section 28 of the Act and showed us that the MEIS

Scheme was specifically mandated as taxable business income of the assessee. Scheme was specifically mandated as taxable business income of the assessee. Scheme was specifically mandated as taxable business income of the assessee.

It was therefore urged that these export incentives are inextricably connected to It was therefore urged that these export incentives are inextricably connected to It was therefore urged that these export incentives are inextricably connected to

the operations of the company and hence rightly considered as operating in ons of the company and hence rightly considered as operating in ons of the company and hence rightly considered as operating in

nature.

were treated to be operating item: were treated to be operating item:

authorities. He submitted that, the MEIS incentive was not directly linked with the authorities. He submitted that, the MEIS incentive was not directly linked with the authorities. He submitted that, the MEIS incentive was not directly linked with the

operations of the assessee but only the exports and therefore it was rightly operations of the assessee but only the exports and therefore it was rightly operations of the assessee but only the exports and therefore it was rightly

excluded from computati excluded from computation of operating margin. He pointed out that several on of operating margin. He pointed out that several

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. comparables had not earned any such export incentive and therefore inclusion of comparables had not earned any such export incentive and therefore inclusion of comparables had not earned any such export incentive and therefore inclusion of

the same in assessee’s PLI would give skewed results. The Ld AR also the same in assessee’s PLI would give skewed results. The Ld AR also the same in assessee’s PLI would give skewed results. The Ld AR also

countered this by taking us through the paper book subm countered this by taking us through the paper book submitted with details of itted with details of

export revenue and export incentive received by those comparable companies. export revenue and export incentive received by those comparable companies. export revenue and export incentive received by those comparable companies.

seen that, the assessee was in receipt of MEIS scrip income of INR 6.24 crores seen that, the assessee was in receipt of MEIS scrip income of INR 6.24 crores seen that, the assessee was in receipt of MEIS scrip income of INR 6.24 crores

and duty drawback income of INR 4.16 crores under the Scheme of Government nd duty drawback income of INR 4.16 crores under the Scheme of Government nd duty drawback income of INR 4.16 crores under the Scheme of Government

of India which was reported as part of the operating revenues in the audited of India which was reported as part of the operating revenues in the audited of India which was reported as part of the operating revenues in the audited

financial statements of the assessee. The assessee is noted to have considered financial statements of the assessee. The assessee is noted to have considered financial statements of the assessee. The assessee is noted to have considered

this government incentive this government incentive as an operating item of income for arriving at its PLI as an operating item of income for arriving at its PLI

i.e. OP/OC. Though MEIS scrip income and duty draw back income are provided i.e. OP/OC. Though MEIS scrip income and duty draw back income are provided i.e. OP/OC. Though MEIS scrip income and duty draw back income are provided

by the Government of India emanates from two separate Act i.e. from the Foreign by the Government of India emanates from two separate Act i.e. from the Foreign by the Government of India emanates from two separate Act i.e. from the Foreign

Trade Policy and the Customs Act, the main in Trade Policy and the Customs Act, the main intention behind this initiative is to tention behind this initiative is to

promote exports and boost foreign exchange. The case of the Revenue however promote exports and boost foreign exchange. The case of the Revenue however promote exports and boost foreign exchange. The case of the Revenue however

is that, MEIS receipts are not directly related to the ongoing operational activities is that, MEIS receipts are not directly related to the ongoing operational activities is that, MEIS receipts are not directly related to the ongoing operational activities

of the assessee and are nonrecurring in nature and theref of the assessee and are nonrecurring in nature and theref of the assessee and are nonrecurring in nature and therefore ought to be

excluded while computing the operating margins of the assessee is not tenable. excluded while computing the operating margins of the assessee is not tenable. excluded while computing the operating margins of the assessee is not tenable.

utilized these scrips against the payment of basic customs duty. Having perused utilized these scrips against the payment of basic customs duty. Having perused utilized these scrips against the payment of basic customs duty. Having perused

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. the terms of the scheme, we find that the MEIS incentive was directly and terms of the scheme, we find that the MEIS incentive was directly and terms of the scheme, we find that the MEIS incentive was directly and

intrinsically related to the exports made by the assessee both to AEs and non intrinsically related to the exports made by the assessee both to AEs and non intrinsically related to the exports made by the assessee both to AEs and non-

AEs and therefore in our considered view, it ought to form part of the operating AEs and therefore in our considered view, it ought to form part of the operating AEs and therefore in our considered view, it ought to form part of the operating

revenue .The Tribunal in th revenue .The Tribunal in the case of Same Deutz Fahr India Private Limited (IT India Private Limited (IT

(TP)A No.45/Chny/2024) has held that A No.45/Chny/2024) has held that

“………We are unable to countenance the reasoning given by the “………We are unable to countenance the reasoning given by the “………We are unable to countenance the reasoning given by the lower authorities that, the export incentive ought to be excluded while lower authorities that, the export incentive ought to be excluded while lower authorities that, the export incentive ought to be excluded while computing the PLI because some of the comparable companies may computing the PLI because so me of the comparable companies may not have such export incentives and therefore it may result in distorted not have such export incentives and therefore it may result in distorted not have such export incentives and therefore it may result in distorted comparison. According to us, this cannot be a reason to debar the comparison. According to us, this cannot be a reason to debar the comparison. According to us, this cannot be a reason to debar the assessee from considering export incentive, which otherwise as noted assessee from considering export incentive, which otherwise as noted assessee from considering export incentive, which otherwise as noted have, has the features of operating revenue. Only because some of the features of operating revenue. Only because some of the features of operating revenue. Only because some of the comparables operated only in domestic markets or had minimal exports comparables operated only in domestic markets or had minimal exports comparables operated only in domestic markets or had minimal exports cannot justify the TPO’s action of excluding the MEIS receipts from the cannot justify the TPO’s action of excluding the MEIS receipts from the cannot justify the TPO’s action of excluding the MEIS receipts from the operating revenues of the assessee. Rather, considering th operating revenues of the assessee. Rather, considering th operating revenues of the assessee. Rather, considering the terms of the scheme and having regard to the fact that this incentive is directly the scheme and having regard to the fact that this incentive is directly the scheme and having regard to the fact that this incentive is directly linked with all exports, irrespective whether made to AEs or non linked with all exports, irrespective whether made to AEs or non linked with all exports, irrespective whether made to AEs or non-AEs, there is merit in the assessee’s plea that, this incentive would impliedly there is merit in the assessee’s plea that, this incentive would impliedly there is merit in the assessee’s plea that, this incentive would impliedly be inter alia reflected while pricing the transaction or ascertaining the be inter alia reflected whi le pricing the transaction or ascertaining the cost of exports and thereby the overall profitability from exports. Hence, cost of exports and thereby the overall profitability from exports. Hence, cost of exports and thereby the overall profitability from exports. Hence, we are of the view that the exclusion of such export incentive from we are of the view that the exclusion of such export incentive from we are of the view that the exclusion of such export incentive from operating revenues would distort the operating profits of the asse operating revenues would distort the operating profits of the asse operating revenues would distort the operating profits of the assessee company in our considered view therefore, the lower authorities were company in our considered view therefore, the lower authorities were company in our considered view therefore, the lower authorities were unjustified in treating the export incentives earned by the assessee unjustified in treating the export incentives earned by the assessee unjustified in treating the export incentives earned by the assessee under the MEIS Scheme to be non-operating in nature. Our view is ably under the MEIS Scheme to be non operating in nature. Our view is ably supported by the decision of the coordinate Bench in the case of ZF supported by the decision of the coordinate Bench in the case of ZF Rane Automotive India Private Limited v. DCIT (supra) rendered on Rane Automotive India Private Limited v. DCIT (supra) rendered on Rane Automotive India Private Limited v. DCIT (supra) rendered on similar facts and circumstances, wherein the incentives received in similar facts and circumstances, wherein the incentives received in similar facts and circumstances, wherein the incentives received in relation to exports were held to be item of operating nature. The relation to exports were held to be item of operating nature. The relation to exports were held to be item of operating nature. The relevant portion of the judgment is as under:- relevant portion of the judgmen “…. whether an income is operating or non “…. whether an income is operating or non-operating would be heavily operating would be heavily dependent upon the character of such income and its proximity to the dependent upon the character of such income and its proximity to the dependent upon the character of such income and its proximity to the normal business operation. Viewed from this angle, we feel that both normal business operation. Viewed from this angle, we feel that both normal business operation. Viewed from this angle, we feel that both the export incentives are intertwined with the core operation of the export incentives ar e intertwined with the core operation of manufacturing and export as the entitlement of such incentive is wholly manufacturing and export as the entitlement of such incentive is wholly manufacturing and export as the entitlement of such incentive is wholly on manufacturing and export. In fact, Section 28 of the Act, specifically on manufacturing and export. In fact, Section 28 of the Act, specifically on manufacturing and export. In fact, Section 28 of the Act, specifically

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. states that these export incentives will chargeable to tax as "profit states that these export incentives will chargeable to tax as "profit states that these export incentives will chargeable to tax as "profits and gains of business or profession", accordingly taking a cue from the gains of business or profession", accordingly taking a cue from the gains of business or profession", accordingly taking a cue from the corporate tax provisions, it could be safely inferred that export corporate tax provisions, it could be safely inferred that export corporate tax provisions, it could be safely inferred that export incentives are operating in nature. Further, the Act does not provide any incentives are operating in nature. Further, the Act does not provide any incentives are operating in nature. Further, the Act does not provide any specific definition of the specific term "operating income". Therefore we specific definition of the specific term " operating income". Therefore we refer to other related Enactments/Rules to decipher the meaning of the refer to other related Enactments/Rules to decipher the meaning of the refer to other related Enactments/Rules to decipher the meaning of the aforesaid term. In this regard, the Safe Harbour Rules 10TA (1)(i) aforesaid term. In this regard, the Safe Harbour Rules 10TA (1)(i) aforesaid term. In this regard, the Safe Harbour Rules 10TA (1)(i) defines "operating revenue" in an inclusive manner to mean "the defines "operating revenue" in an inclusive manner to mean "the defines "operating revenue" in an inclusive manner to mean "the revenue earned by the assessee in the previous year in relation to the revenue earned by the assessee in the previous year in relation to the international transaction during the course of its normal operations but international transaction during the course of its normal operations but international transaction during the course of its normal operations but not including the following, namely. (vii) other incomes not relating to not including the following, namely. (vii) other incomes not relating to not including the following, namely. (vii) other incomes not relating to normal operations of the assessee". From this definition it i normal operations of the assessee". From this definition it i normal operations of the assessee". From this definition it is clear that an income to form part of operating income it should be derived from an income to form part of operating income it should be derived from an income to form part of operating income it should be derived from normal operations. Undoubtedly in the instant case, the export incentive normal operations. Undoubtedly in the instant case, the export incentive normal operations. Undoubtedly in the instant case, the export incentive is derived during the course of normal operations. is derived during the course of normal operations.

“……… 6. Therefore,one cannot have qualms abo “……… 6. Therefore,one cannot have qualms about the nature of such ut the nature of such export incentives and it forms part of the core business operation. export incentives and it forms part of the core business operation. export incentives and it forms part of the core business operation. Accordingly, the same will have to be treated as operating revenue in Accordingly, the same will have to be treated as operating revenue in Accordingly, the same will have to be treated as operating revenue in the hands of the Assessee while computing its margin for the purpose the hands of the Assessee while computing its margin for the purpose the hands of the Assessee while computing its margin for the purpose of Transfer Pricing benchmarking analysis with comparable companies. of Transfer Pricing benchma rking analysis with comparable companies. We also hold that merely because some of the comparables may not We also hold that merely because some of the comparables may not We also hold that merely because some of the comparables may not have such export incentive cannot debar the Assessee from have such export incentive cannot debar the Assessee from have such export incentive cannot debar the Assessee from considering such income as operating revenue. Turning to the decisions considering such income as operating revenue. Turning to the decisions considering such income as operating revenue. Turning to the decisions relied on by the Ld DR. in the case of Sami Labs (supra), we find that in relied on by the Ld DR. in the case of Sami Labs (supra), we find that in the said decision it has been held in principle that export incentive is the said decision it has been held in principle that export incentive is the said decision it has been held in principle that export incentive is operating revenue, therefore this decision does not actually aid the operating revenue, therefore this decision does not actually aid the operating revenue, therefore this decision does not actually aid the contention of the Ld DR/DRP. The other decision which was co contention of the Ld DR/DRP. The other decision which was co contention of the Ld DR/DRP. The other decision which was considered by DRP and also emphasised by Ld DR in the case of Goodyear India by DRP and also emphasised by Ld DR in the case of Goodyear India by DRP and also emphasised by Ld DR in the case of Goodyear India Ltd (supra), the issue was whether export incentive and rebate should Ltd (supra), the issue was whether export incentive and rebate should Ltd (supra), the issue was whether export incentive and rebate should be reduced from cost of goods. What was held was that such incentives be reduced from cost of goods. What was held was that such incentives be reduced from cost of goods. What was held was that such incentives were available to an Assessee only after the exports were made and were available to an Assessee only after the exports were made and therefore, could not go to reduce the cost of goods. Apparently, the therefore, could not go to reduce the cost of goods. Apparently, the therefore, could not go to reduce the cost of goods. Apparently, the issue for consideration in the aforesaid case is different from the issue issue for consideration in the aforesaid case is different from the issue issue for consideration in the aforesaid case is different from the issue under consideration. Therefore, the under consideration. Therefore, the under consideration. Therefore, the decision decision of Goodyear is decision of Goodyear is of Goodyear is distinguishable on facts. Our view is also supported by the jurisdictional distinguishable on facts. O ur view is also supported by the jurisdictional Tribunal decision in the case of Greenland Exports (P.) Ltd. (supra) Tribunal decision in the case of Greenland Exports (P.) Ltd. (supra) Tribunal decision in the case of Greenland Exports (P.) Ltd. (supra) wherein it was held that export incentives and duty drawback are wherein it was held that export incentives and duty drawback are wherein it was held that export incentives and duty drawback are considered to be operating in nature. Relevant extract of the ruling is considered to be operating in nature. Relevant extract of the ruling is considered to be operating in nature. Relevant extract of the ruling is provided below: “….We have perused the orders and heard the rival contentions insofar “….We have perused the orders and heard the rival contentions insofar “….We have perused the orders and heard the rival contentions insofar as duty drawback and export incentives are concerned, the cases relied as duty drawback and export incentives are concerned, the cases relied as duty drawback and export incentives are concerned, the cases relied

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. on by the ld. AR do support Assessee's case. As for the case of on by the ld. AR do support Assessee's case. As for the case of on by the ld. AR do support Assessee's case. As for the case of Goodyear India Ltd (supra) relied on by the Assessing Officer, the issue Goodyear India Ltd (supra) re lied on by the Assessing Officer, the issue was whether export incentive and rebate could be reduced from cost of was whether export incentive and rebate could be reduced from cost of was whether export incentive and rebate could be reduced from cost of goods. What was held was that such incentives were available to an goods. What was held was that such incentives were available to an goods. What was held was that such incentives were available to an Assessee only after the exports were made and therefore, could not go Assessee only after the exports were made and therefore, could not go Assessee only after the exports were made and therefore, could not go to reduce the cost of goods. In the cases relied by the Assessee, it has duce the cost of goods. In the cases relied by the Assessee, it has duce the cost of goods. In the cases relied by the Assessee, it has been uniformly held that such incentives were to be considered as a been uniformly held that such incentives were to be considered as a been uniformly held that such incentives were to be considered as a part of operational income under TNM method while working out the part of operational income under TNM method while working out the part of operational income under TNM method while working out the margin of an Assessee for comparability. hence we set aside the orders margin of an Assessee for comparability. hence we set aside the orders of the authorities below on this issue and direct the Assessing of the authorities below on this issue and direct the Assessing of the authorities below on this issue and direct the Assessing officer/TPO to rework the results of the Assessee after considering the officer/TPO to rework the results of the Assessee after considering the officer/TPO to rework the results of the Assessee after considering the above terms as operational in nature.” above terms as operational in nature.” Similarly, the co-ordinate Bench of this Tribunal in the case o ordinate Bench of this Tribunal in the case o ordinate Bench of this Tribunal in the case of ZF Commercial Vehicle Control Systems India Ltd. (supra), has also held Commercial Vehicle Control Systems India Ltd. (supra), has also held Commercial Vehicle Control Systems India Ltd. (supra), has also held that export incentive ought to be treated as “operating revenue” while that export incentive ought to be treated as “operating revenue” while that export incentive ought to be treated as “operating revenue” while computing the margins of the tested party (i.e. Assessee therein). The computing the margins of the tested party (i.e. Assessee therein). The computing the margins of the tested party (i.e. Assessee therein). The relevant extract of paragraph 44 of the order of this Tribunal is relevant extract of paragraph 44 of the order of this Tribunal is reproduced below: “44. We have heard the rival contentions, and we reproduced below: “44. We have heard the rival contentions, and we reproduced below: “44. We have heard the rival contentions, and we find that the issue of considering the incentives / grants as part of the find that the issue of considering the incentives / grants as part of the find that the issue of considering the incentives / grants as part of the operating income for computing the margin earned has already been operating income for computing the margin earned has already been operating income for computing the margin earned has already been decided by this tribunal in the case of Hyundai Motor India Limited decided by this tribuna l in the case of Hyundai Motor India Limited (supra). Therefore, by following the decision of this tribunal we direct (supra). Therefore, by following the decision of this tribunal we direct (supra). Therefore, by following the decision of this tribunal we direct the TPO to consider government grants received by the Assessee as the TPO to consider government grants received by the Assessee as the TPO to consider government grants received by the Assessee as operating income and accept the margin computation of the Assessee operating income and accept the margin computation of the Assessee operating income and accept the margin computation of the Assessee and ordered accordingly. Thus, we allow the grounds of appeal filed by rdered accordingly. Thus, we allow the grounds of appeal filed by rdered accordingly. Thus, we allow the grounds of appeal filed by the Assessee.”

are of the view that the export incentives viz., MEIS scrips and the duty drawback are of the view that the export incentives viz., MEIS scrips and the duty drawback are of the view that the export incentives viz., MEIS scrips and the duty drawback

scheme awarded by the Government is meant to mitigate the gross operating scheme awarded by the Government is meant to mitigate the gross operating scheme awarded by the Government is meant to mitigate the gross operating

costs of the assessee, and therefore costs of the assessee, and therefore, it ought to be considere it ought to be considered as part of the

"operating revenue" while computing the margin of the assessee. Ground No 5 "operating revenue" while computing the margin of the assessee. Ground No 5 "operating revenue" while computing the margin of the assessee. Ground No 5

raised by the assessee is accordingly allowed. raised by the assessee is accordingly allowed.

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. 16. Ground 7 – Working Capital Adjustment Working Capital Adjustment

The next issue before us is the ground on working capital adjustment. The Ld AR The next issue before us is the ground on working capital adjustment. The Ld AR The next issue before us is the ground on working capital adjustment. The Ld AR

submitted that this ground was raised as an additional ground before the Dispute submitted that this ground was raised as an additional ground before the Dispute submitted that this ground was raised as an additional ground before the Dispute

Resolution Panel (DRP).The DRP having admitted the grounds has not allowed Resolution Panel (DRP).The DRP having admitted the grounds has not allowed Resolution Panel (DRP).The DRP having admitted the grounds has not allowed

the adjustment on working capital. The Ld AR placed reliance on Jurisdictional rking capital. The Ld AR placed reliance on Jurisdictional rking capital. The Ld AR placed reliance on Jurisdictional

ruling in the case of Doowon Automotive India Private Limited I.T.A. No. ruling in the case of Doowon Automotive India Private Limited I.T.A. No. ruling in the case of Doowon Automotive India Private Limited I.T.A. No.

692/Mds/2016 for AY 2011 692/Mds/2016 for AY 2011-12and also I.T.A. No. 3061/Chny /2017 for AY 2013 12and also I.T.A. No. 3061/Chny /2017 for AY 2013-

14 , the Tribunal has held under: ribunal has held under:

“……We have heard the rival contentions. With regard to the allowability of rd the rival contentions. With regard to the allowability of rd the rival contentions. With regard to the allowability of working capital adjustment, the Tribunal has considered similar issue in working capital adjustment, the Tribunal has considered similar issue in working capital adjustment, the Tribunal has considered similar issue in the assessment year 2011 the assessment year 2011-12 and vide its order in I.T.A. No. 12 and vide its order in I.T.A. No. 692/Mds/2016, the Tribunal has observed and held as under: 692/Mds/2016, the Tribunal has observed and held as under:

“7. The Ld. AR argued that the Assessing Officer/DRP has confirmed “7. The Ld. AR argued that the Assessing Officer/DRP has confirmed “7. The Ld. AR argued that the Assessing Officer/DRP has confirmed the action of the TPO in not providing working capital adjustment while the action of the TPO in not providing working capital adjustment while the action of the TPO in not providing working capital adjustment while determining net profit margin of the assessee. In the assessee's own case determining net profit margin of the assessee. In the assessee's own case determining net profit margin of the assessee. In the assessee's own case in the assessment year 2009 in the assessment year 2009-10, DRP in its order dated 20.12.2013 has n its order dated 20.12.2013 has directed the TPO to examine the issue and consider working capital directed the TPO to examine the issue and consider working capital directed the TPO to examine the issue and consider working capital adjustment. Whereas, the Ld. TPO observed that the assessee company adjustment. Whereas, the Ld. TPO observed that the assessee company adjustment. Whereas, the Ld. TPO observed that the assessee company is actually buying the parts from the AE and working capital adjustment to is actually buying the parts from the AE and working capital adjustment to is actually buying the parts from the AE and working capital adjustment to be allowed if the assessee demonstrates with AE of allowing the credit the assessee demonstrates with AE of allowing the credit the assessee demonstrates with AE of allowing the credit period to the assessee and DRP confirm the action of the TPO and the Ld. period to the assessee and DRP confirm the action of the TPO and the Ld. period to the assessee and DRP confirm the action of the TPO and the Ld. AR demonstrated the Arithmetic Mean of 4.58% of seven comparables AR demonstrated the Arithmetic Mean of 4.58% of seven comparables AR demonstrated the Arithmetic Mean of 4.58% of seven comparables selected at Page 41 of paper book and referred to the worki selected at Page 41 of paper book and referred to the worki selected at Page 41 of paper book and referred to the working capital adjustment PLR of 12.26% with the comparables current assets being adjustment PLR of 12.26% with the comparables current assets being adjustment PLR of 12.26% with the comparables current assets being sundry creditors, sundry debtors and inventories at Page 42 and sundry creditors, sundry debtors and inventories at Page 42 and sundry creditors, sundry debtors and inventories at Page 42 and supported working capital adjustment of comparables company based on supported working capital adjustment of comparables company based on supported working capital adjustment of comparables company based on the financial statements. The Ld. DR relied o the financial statements. The Ld. DR relied on the order of TPO and n the order of TPO and prayed for no adjustment is required. Considering the facts and material prayed for no adjustment is required. Considering the facts and material prayed for no adjustment is required. Considering the facts and material on record the financial statements and the paper book, there is necessity on record the financial statements and the paper book, there is necessity on record the financial statements and the paper book, there is necessity

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. for working capital adjustment and accordingly we remit the issue to the for working capital adjustment and accordingly we remit the issue to the for working capital adjustment and accordingly we remit the issue to the file of AO to consider the material for fresh consideration. consider the material for fresh consideration. 5.3 By giving effect to the order of the ITAT, vide order dated 28.10.2018, 5.3 By giving effect to the order of the ITAT, vide order dated 28.10.2018, 5.3 By giving effect to the order of the ITAT, vide order dated 28.10.2018, the TPO had examined and allowed the benefit of working capital the TPO had examined and allowed the benefit of working capital the TPO had examined and allowed the benefit of working capital adjustment. Thus, respectfully following the above decision of the adjustment. Thus, respectfully following the above decision of the adjustment. Thus, respectfully following the above decision of the Coordinate Benches of the Tribunal, for the assessment year under Coordinate Benches of the Tribunal, for the assessment year under Coordinate Benches of the Tribunal, for the assessment year under consideration also, we direct the Assessing Officer to give suitable consideration also, we direct the Assessing Officer to give suitable consideration also, we direct the Assessing Officer to give suitable adjustment against the working capital component while determining the adjustment against the working capital component while determining the adjustment against the working capital component while determining the ALP.”

in the case of Mobis India Ltd. v. Dy. CIT [2013] 38 taxmann.com 231/[2014] in the case of Mobis India Ltd. v. Dy. CIT [2013] 38 taxmann.com 231/[2014] in the case of Mobis India Ltd. v. Dy. CIT [2013] 38 taxmann.com 231/[2014]

where the decision was based on the factual aspect that the Assessee was not where the decision was based on the factual aspect that the Assessee was not where the decision was based on the factual aspect that the Assessee was not

able to demonstrate the impact of working capital adjustment. The L able to demonstrate the impact of working capital adjustment. The L able to demonstrate the impact of working capital adjustment. The Ld AR

objected to the argument of the Ld objected to the argument of the Ld. DR and pointed out that complete working DR and pointed out that complete working

capital adjustment working has been given by the Assessee and a copy of the capital adjustment working has been given by the Assessee and a copy of the capital adjustment working has been given by the Assessee and a copy of the

same is at pages 212 to 260 of the Assessee's paper book. same is at pages 212 to 260 of the Assessee's paper book.

and furnished before the lower authority. Therefore, we direct the TPO to and furnished before the lower authority. Therefore, we direct the TPO to and furnished before the lower authority. Therefore, we direct the TPO to

consider the working capital adjustment as provided in paper book page nos. 212 consider the working capital adjustment as provided in paper book page nos. 212 consider the working capital adjustment as provided in paper book page nos. 212

to 260 and grant adjustment while arriving at the arm’s length p to 260 and grant adjustment while arriving at the arm’s length p to 260 and grant adjustment while arriving at the arm’s length price. This ground

is allowed.

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd.

This ground deals with disallowance of deduction claimed under section This ground deals with disallowance of deduction claimed under section This ground deals with disallowance of deduction claimed under section

80G of the Act on CSR expenditure. The Ld AR for the Appellant submitted that 80G of the Act on CSR expenditure. The Ld AR for the Appellant submitted that 80G of the Act on CSR expenditure. The Ld AR for the Appellant submitted that

the Assessee had made contribution towards Corporate Social Responsibility made contribution towards Corporate Social Responsibility made contribution towards Corporate Social Responsibility

(“CSR”) amounting to Rs.17,13,153 (“CSR”) amounting to Rs.17,13,153/- and since the same was eligible for and since the same was eligible for

deduction under section 80G of the Act (eligible @ 50% to the tune of deduction under section 80G of the Act (eligible @ 50% to the tune of deduction under section 80G of the Act (eligible @ 50% to the tune of

Rs.8,19,673/-), the Assessee had claimed the same as de ), the Assessee had claimed the same as deduction. However, the duction. However, the

NaFAC disallowed the claim of deduction under section 80G of the Act on the NaFAC disallowed the claim of deduction under section 80G of the Act on the NaFAC disallowed the claim of deduction under section 80G of the Act on the

ground that CSR expenses do not qualify for any benefit under section 80G of ground that CSR expenses do not qualify for any benefit under section 80G of ground that CSR expenses do not qualify for any benefit under section 80G of

the Act.

issued its FAQ’s on CSR expenditure as per section 135 of the Companies Act issued its FAQ’s on CSR expenditure as per section 135 of the Companies Act issued its FAQ’s on CSR expenditure as per section 135 of the Companies Act

vide Circular No. 01/2016 dated 12 January 2016. As per FAQ No.6 of the said vide Circular No. 01/2016 dated 12 January 2016. As per FAQ No.6 of the said vide Circular No. 01/2016 dated 12 January 2016. As per FAQ No.6 of the said

Circular, it was noted that while no specific tax exemption has been extended to Circular, it was noted that while no specific tax exemption has been extended to Circular, it was noted that while no specific tax exemption has been extended to

CSR expenses, the specific activities as mentioned in Schedule VII of the , the specific activities as mentioned in Schedule VII of the , the specific activities as mentioned in Schedule VII of the

Companies Act, 2013 already enjoy tax exemptions under different sections of Companies Act, 2013 already enjoy tax exemptions under different sections of Companies Act, 2013 already enjoy tax exemptions under different sections of

the Income Tax Act. The Ld AR The Ld AR further submits that Section 80G(1) of the Act submits that Section 80G(1) of the Act

provides that while computing the total provides that while computing the total income of the Appellant, there shall be a income of the Appellant, there shall be a

deduction in respect of such sum paid by the Assessee as a donation. Deduction deduction in respect of such sum paid by the Assessee as a donation. Deduction deduction in respect of such sum paid by the Assessee as a donation. Deduction

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. under Chapter VI-A comes into play only after the gross total income has been A comes into play only after the gross total income has been A comes into play only after the gross total income has been

computed. The provisions of section 80G is under “Part B computed. The provisions of section 80G is under “Part B computed. The provisions of section 80G is under “Part B – Deductions in

respect of certain payments” in Chapter VI respect of certain payments” in Chapter VI-A of the Act. Accordingly, the A of the Act. Accordingly, the

contributions made to certain funds, charitable institutions are eligible for contributions made to certain funds, charitable institutions are eligible for contributions made to certain funds, charitable institutions are eligible for

deduction under section 80G subject to the fulfilment of the attendant conditions. deduction under section 80G subject to the fulfilment of the attendant conditions. deduction under section 80G subject to the fulfilment of the attendant conditions.

arguments:

M/s. FNF India Private Ltd v. The ACIT, Circle 3(1)(1), Bengaluru M/s. FNF India Private Ltd v. The ACIT, Circle 3(1)(1), Bengaluru M/s. FNF India Private Ltd v. The ACIT, Circle 3(1)(1), Bengaluru in ITA No.1565/Bang/2019 and Allegis Services (India) Pvt. Ltd. v. ACIT in ITA Allegis Services (India) Pvt. Ltd. v. ACIT in ITA No.1693/Bang/2019

expenditure on CSR activities under section 80G of the Act. As per section 80G expenditure on CSR activities under section 80G of the Act. As per section 80G expenditure on CSR activities under section 80G of the Act. As per section 80G

of the Act, restriction is placed only for specific donations such as Swachh Bharat of the Act, restriction is placed only for specific donations such as Swachh Bharat of the Act, restriction is placed only for specific donations such as Swachh Bharat

Kosh [Sec 80G(2)(iiihk)] and C Kosh [Sec 80G(2)(iiihk)] and Clean Ganga Fund [Sec 80G(2)(iiihl)], provided if it lean Ganga Fund [Sec 80G(2)(iiihl)], provided if it

has been spent in pursuance to CSR activities. Hence, only those contributions has been spent in pursuance to CSR activities. Hence, only those contributions has been spent in pursuance to CSR activities. Hence, only those contributions

made in pursuance to CSR activities to the above made in pursuance to CSR activities to the above-mentioned funds would not mentioned funds would not

qualify for deduction u/s 80G of the Act. This is qualify for deduction u/s 80G of the Act. This is not the case with any donations not the case with any donations

made to funds or institutions covered under section 80G(2)(iv) and hence, all made to funds or institutions covered under section 80G(2)(iv) and hence, all made to funds or institutions covered under section 80G(2)(iv) and hence, all

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. donations made to such institutions or funds are allowable whether spent through donations made to such institutions or funds are allowable whether spent through donations made to such institutions or funds are allowable whether spent through

CSR or otherwise. The Ld AR has placed its reliance on the follow CSR or otherwise. The Ld AR has placed its reliance on the follow CSR or otherwise. The Ld AR has placed its reliance on the following decisions:

i.) M/s. Source Hov India Private Limited v. The DCIT, Corporate Circle M/s. Source Hov India Private Limited v. The DCIT, Corporate Circle M/s. Source Hov India Private Limited v. The DCIT, Corporate Circle- 6(2) Chennai in ITA No.2454/Chny/2024: It was held as under: 6(2) Chennai in ITA No.2454/Chny/2024: It was held as under: 6(2) Chennai in ITA No.2454/Chny/2024: It was held as under:

“It could thus be seen that there is prohibition on claiming such “It could thus be seen that there is prohibition on claiming such “It could thus be seen that there is prohibition on claiming such expenditure u/s 37. However, there is no such restriction for expenditure u/s 37. However, there is no such restriction for expenditure u/s 37. However, there is no such restriction for claiming deduction thereof u/s 30 to 36. In other words, It is quite claiming deduction thereof u/s 30 to 36. In other words, It is quite claiming deduction thereof u/s 30 to 36. In other words, It is quite possible to claim the deduction in other sections subject t possible to claim the deduction in other sections subject t possible to claim the deduction in other sections subject to fulfillment of conditions of those sections and allowability of CSR fulfillment of conditions of those sections and allowability of CSR fulfillment of conditions of those sections and allowability of CSR expenditure is not completely ruled out. expenditure is not completely ruled out. … We find that there is no such restriction for donation out of … We find that there is no such restriction for donation out of … We find that there is no such restriction for donation out of CSR funds to Prime Minister’s National Relief Fund. CSR funds to Prime Minister’s National Relief Fund. Considering all the above fa Considering all the above facts and circumstances of the case, cts and circumstances of the case, we are of the considered opinion that the impugned deduction u/s we are of the considered opinion that the impugned deduction u/s we are of the considered opinion that the impugned deduction u/s 80G would be available to the assessee.” 80G would be available to the assessee.”

ii.) M/s. Goldman Sachs Services Pvt. Ltd., v, JCIT in IT(TP)A M/s. Goldman Sachs Services Pvt. Ltd., v, JCIT in IT(TP)A M/s. Goldman Sachs Services Pvt. Ltd., v, JCIT in IT(TP)A No.2355/Bang/2019; ; iii.) First American (India) (P.) Ltd. v. Asstt. CIT [IT Appeal No. 1762 First American (India) (P.) Ltd. v. Asstt. CIT [IT Appeal No. 1762 First American (India) (P.) Ltd. v. Asstt. CIT [IT Appeal No. 1762 (Bang.) of 2019, dated 29 (Bang.) of 2019, dated 29-4-2020]; iv.) Sling Media (P.) Ltd. v. Deputy Commissioner of Income Sling Media (P.) Ltd. v. Deputy Commissioner of Income Sling Media (P.) Ltd. v. Deputy Commissioner of Income-tax, [2022] 135 taxmann.com 164 (Bangalore 135 taxmann.com 164 (Bangalore - Trib.); v.) Optum Global Solutions (India) (P.) L Optum Global Solutions (India) (P.) Ltd. v. Deputy Commissioner of td. v. Deputy Commissioner of Income-tax [2023] 154 taxmann.com 651 (Hyderabad tax [2023] 154 taxmann.com 651 (Hyderabad - Trib.); ; vi.) Power Mech Projects Ltd. v. Deputy Commissioner of Income Power Mech Projects Ltd. v. Deputy Commissioner of Income Power Mech Projects Ltd. v. Deputy Commissioner of Income-tax [2023] 156 taxmann.com 575 (Hyderabad [2023] 156 taxmann.com 575 (Hyderabad - Trib.)[31-08-2023] 2023].

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. 23. Per contra,, the Ld. DR for the Re , the Ld. DR for the Revenue vehemently supported the venue vehemently supported the

assessment order passed by the AO and submitted that expenses under the assessment order passed by the AO and submitted that expenses under the assessment order passed by the AO and submitted that expenses under the

head CSR as per Companies Act 2013 cannot be allowed as deduction under head CSR as per Companies Act 2013 cannot be allowed as deduction under head CSR as per Companies Act 2013 cannot be allowed as deduction under

section 80G of the Income Tax Act. section 80G of the Income Tax Act.

records and the judicial precedents submitted before us. We have taken note of records and the judicial precedents submitted before us. We have taken note of records and the judicial precedents submitted before us. We have taken note of

the MCA Circular No.01/2016 and the attendant conditions dealing with the the MCA Circular No.01/2016 and the attendant conditions dealing with the the MCA Circular No.01/2016 and the attendant conditions dealing with the

allowability of deductions under section 80G of the Act. We are of th allowability of deductions under section 80G of the Act. We are of th allowability of deductions under section 80G of the Act. We are of the considered

view that while CSR expenses do not qualify as a business expenditure, there view that while CSR expenses do not qualify as a business expenditure, there view that while CSR expenses do not qualify as a business expenditure, there

cannot be any extraneous conditions imposed on the allowability of deduction cannot be any extraneous conditions imposed on the allowability of deduction cannot be any extraneous conditions imposed on the allowability of deduction

under section 80G of the Act (other than the conditions mentioned therein). It is under section 80G of the Act (other than the conditions mentioned therein). It is under section 80G of the Act (other than the conditions mentioned therein). It is

worthwhile to note that section 80G already contains the list of CSR expenses ile to note that section 80G already contains the list of CSR expenses ile to note that section 80G already contains the list of CSR expenses

which do not qualify as deductions namely contributions to Swachh Bharat Kosh which do not qualify as deductions namely contributions to Swachh Bharat Kosh which do not qualify as deductions namely contributions to Swachh Bharat Kosh

[Sec 80G(2)(iiihk)] and Clean Ganga Fund [Sec 80G(2)(iiihl)]. Accordingly, when [Sec 80G(2)(iiihk)] and Clean Ganga Fund [Sec 80G(2)(iiihl)]. Accordingly, when [Sec 80G(2)(iiihk)] and Clean Ganga Fund [Sec 80G(2)(iiihl)]. Accordingly, when

restrictions for allowability u ty u/s.80G of the Act are specifically called out towards are specifically called out towards

CSR contributions, it cannot be said that that 80G prohibits all expenses towards CSR contributions, it cannot be said that that 80G prohibits all expenses towards CSR contributions, it cannot be said that that 80G prohibits all expenses towards

CSR contributions. The AO has not brought on record any material to support his CSR contributions. The AO has not brought on record any material to support his CSR contributions. The AO has not brought on record any material to support his

case that restriction under section case that restriction under section 80G should be extended to cover all CSR 80G should be extended to cover all CSR

expenses. Accordingly, we direct the AO to delete the impugned addition of expenses. Accordingly, we direct the AO to delete the impugned addition of expenses. Accordingly, we direct the AO to delete the impugned addition of

IT(TP)A No. IT(TP)A No.48/Chny/2024 M/s. Hyundai Wia India P. Ltd. M/s. Hyundai Wia India P. Ltd. Rs.8,19,673/- on account of disallowance of deduction claimed under section on account of disallowance of deduction claimed under section on account of disallowance of deduction claimed under section

80G of the Act. This ground is allowed. 80G of the Act. This ground is allowed.

Order pronounced on 30th day of December, 2025 at Chennai. Order pronounced on 5 at Chennai.

Sd/- Sd/ Sd/- कुमार िग�र) (एस. आर. रघुनाथा) ) (मनु कुमार (S.R.RAGHUNATHA) (S.R.RAGHUNATHA) (MANU KUMAR GIRI) (MANU KUMAR GIRI) लेखा सद)य/ACCOUNTANT MEMBER �याियक सद)य/JUDICIAL MEMBER /ACCOUNTANT MEMBER /JUDICIAL MEMBER चे�नई/Chennai, *दनांक/Dated: 30th December, 2025. cember, 2025. EDN, Sr. PS

आदेशक��ितिल+पअ,े+षत 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकरआयु-/CIT, Chennai / Madurai / Salem / Coimbatore. CIT, Chennai / Madurai / Salem / Coimbatore. 4. +वभागीय�ितिनिध/DR 5. गाड�फाईल/GF