BOSCJ LIMITED,BANGALORE vs. DCIT, BANGALORE

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ITA 1581/BANG/2014Status: DisposedITAT Bangalore31 May 2022AY 2009-102 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal is hearing an appeal from Bosch Limited concerning various disallowances and adjustments made by the Assessing Officer and upheld by the CIT(A). The specific grounds of appeal relate to deductions, interest expenditure, capital gains, weighted deductions, disallowance under Section 14A, and transfer pricing adjustments.

What were the facts?

The assessee, Bosch Limited, engaged in manufacturing and sales, filed its return of income. The Assessing Officer completed the assessment, determining a higher total income. The CIT(A) partly allowed the assessee's appeal, and the assessee is now appealing to the Tribunal on issues decided against it.

What were the issues?

The key issues involve the allowability of deductions for provisions, interest expenditure, the classification of technical know-how receipts, and the validity of transfer pricing adjustments and disallowances under Section 14A.

Which sections of the Income-tax Act were involved?

Section 35(2AB),Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES “A”, BANGALORE

Hearing: 19.05.2022Pronounced: 31.05.2022

O R D E R

Per George George K, JM :

1.

This appeal at the instance of the assessee is directed against CIT(A)’s order dated 28.08.2014. The relevant assessment year is 2009-2010.

2.

The brief facts of the case are as follows: The assessee is a public limited company engaged in the business of manufacture and sale of diesel fuel injection equipments and parts therefore, auto electrical etc. For the assessment year 2009-2010, the return of income was filed on 29.09.2009 declaring total income of Rs.619,75,17,688. The Assessing Officer completed the assessment u/s 143(3) of the I.T.Act vide order dated 31.05.2013 by determining the total income at Rs.653,85,57,204. Aggrieved, the assessee filed an appeal before the first appellate authority. The CIT(A) partly allowed the appeal of the assessee. Aggrieved by the 2 IT(TP)A No.1581/Bang/2014 M/s.Bosch Limited order of the CIT(A), on issues decided against the assesee, an appeal has been filed before the Tribunal. The grounds raised by the assessee read as follows:-

“1. That the learned Commissioner of Income-tax (Appeals), Large Tax payers Unit, Bangalore (for short CIT(A) LTU) erred in upholding the action of the Assessing Officer in not allowing a deduction for the provision made towards interest payable to Central excise dept amounting to Rs.40,312 although the appellant has followed mercantile system of accounting.

2. That the learned CIT(A) LTU erred in upholding the action of the Assessing Officer in disallowing the interest expenditure payable to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) amounting to Rs. 13,30,621.

3.

That the learned CIT(A) LTU erred in upholding the action of Assessing Officer in taxing the receipt towards first instalment in respect of Technical know-how from M/s E P Polymers (M) SDW, BHD Malaysia under the head business income instead of long-term Capital gains, despite agreeing with appellant's contention that "right to use" falls within the ambit of "Capital asset".

4.

That the learned CIT(A) LTU erred in upholding the action of Assessing Officer in allowing weighted deduction u/s 35(2AB) on the net expenditure of Rs. 30,33,74,421 as against gross expenditure of Rs. 94,50,68,193.

5.

That the learned CIT(A) LTU erred in upholding the action of the Assessing Officer in disallowing u/s. 14A Rs.52,12,206 as against Rs.2,01,142 disallowed by the appellant.

6.

That the learned CIT(A) erred in upholding the Transfer Pricing Adjustment of Rs.34,81,31,774.

7.

That the learned CIT(A) erred in upholding the TPO's conclusion that the arm's length price of technical fee paid is to be treated as "NIL"

8.

That the learned CIT(A) erred in upholding TPO's action of applying Comparable Uncontrolled Price (CUR) method as the most appropriate method and in treating the transactions relating to technical charges as a class of transaction of its own and further erred on facts in para 13.2 by holding that 'The manufacturing activities of the appellant, from the time

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