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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.S. SYAL, VP & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM :
This appeal preferred by the assessee emanates from the order of the Dispute Resolution Panel-3 (WZ) ( in short ‘DRP), Mumbai dated 13.12.2016 for the assessment year 2012-13 as per following grounds of appeal on record: “The grounds stated hereunder are independent of, and without prejudice to one another. Transfer Pricing Grounds Ground No.1 1. On the facts and in the circumstances of the case, and in law, the Honorable Dispute Resolution Panel ('Hon'ble DRP'), and the Learned
2 ITA No. 723/PUN/2017 A.Y.2012-13
Assessing Officer ('Ld. AO') pursuant to the directions of the Hon'ble DRP, erred in making a TP adjustment of Rs. 3,73,21,943 to the income of the Appellant by holding that the Appellant's international transaction pertaining to payment of commission does not satisfy the arm's length principle envisaged under the Income-tax Act, 1961 ('the Act').
The Appellant prays that the addition pertaining to payment for commission ought to be deleted.
Ground No.2 2. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld. AO, erred in rejecting the economic analysis conducted by the Appellant for demonstrating the arm's length nature of the commission paid to Associated Enterprises ('AEs'). The Appellant prays that the economic analysis conducted by the Appellant ought to be upheld.
Ground No.3 3. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld. AO, erred in re-computing the Arm's Length Price ('ALP') of the Appellant's international transaction pertaining to payment of commission to AE at 'Nil'. The Appellant prays that the said re-computation ought to be deleted.
Ground No.4 4. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld.AO, erred in contravening the principle of consistency in connection with determining the ALP of the Appellant's international transaction pertaining to payment of commission to AE. The Appellant prays that the principle of consistency be upheld and the adjustment made by the Hon'ble DRP/Ld. AO ought to be deleted.
Ground No.5 5. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld. AO, erred in ignoring the comparable uncontrolled data submitted by the Appellant to demonstrate the ALP of international transaction pertaining to payment of commission to AE.
The Appellant prays that the comparable data submitted by the Appellant ought to be accepted and consequently the transfer pricing adjustment made be deleted.
Ground No.6 6. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP / Ld. AO, erred in concluding that the purchase of software licenses amounting to Rs.1,20,337, made by the Appellant's from Dassault Systemes K.K. and unrelated parties, constitutes a deemed international transaction.
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The Appellant prays that the purchase of software licenses by the Appellant's from Dassault Systemes K.K. should not be treated as a deemed international transaction.
Ground No.7 7. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP / Ld. AO, erred in computing the ALP of Appellant's purchase of software licenses from Dassault Systemes K.K. at 'Nil'.
The Appellant prays that the addition pertaining to purchase of software licenses from Dassault Systemes K.K. ought to be deleted.
Ground No.8 8. On the facts and the circumstances of the case and in law, the Hon'ble DRP /Ld. AO has erred in adopting a contradictory position wherein first while deciding on the issue of deemed international transaction it has been concluded that the AE has rendered services in connection with purchases made from Dassault India and Dassault Systemes K.K., while later the ALP of the commission paid by the Appellant to AE, for the procurement and marketing support services received, has been recomputed at 'Nil' citing that no services have been rendered by the AE to the Appellant.
The Appellant prays that the addition pertaining to commission paid to AE should be deleted.
Corporate Tax Grounds
Ground No.9 9. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld. AO, has erred in disallowing the claim of the Appellant in respect of amortization of premium on leasehold land amounting to Rs.4,30,886.
The Appellant prays that the addition pertaining to amortization of premium on leasehold land ought to be deleted and should be allowed as revenue expenditure.
Ground No. 10 10. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld.AO, has erred in disallowing the provision for expenditure of Rs. 38,93,287 in respect of provision under Bhavishya Kalyan Yojana (,BKY'), an employee welfare scheme.
The Appellant prays that deduction in respect of the provision made for BKY expenses should be allowed as an ascertained liability.
Ground No. 11 11. On the facts and in the circumstances of the case, and in law, the Hon'ble DRP/Ld. AO, has erred in invoking Rule 80 of the Income-tax Rules,1962 and thereby disallowing expenses amounting to Rs.86,73,524 under section 14A by applying Rule 80 of the Act.
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The Appellant prays that addition made under Section 14A of the Act by applying Rule 80 should be deleted as the Appellant has suo-moto disallowed expenses of Rs 17,43,743 directly attributable to the exempt income.
Ground No. 12 12. On the facts and in the circumstances of the case and in law, the Hon'ble DRP/Ld. AO has erred in retaining, the reversal of Rs 3,60,976/-, being provision written back to Profit and Loss Account for Medicare Expenses.
The Appellant prays that reversal of provision of Rs 3,60,976 to be excluded while calculating the total income of the Appellant.
Ground No. 13 13. On the facts and in the circumstances of the case and in law, the Hon'ble DRP/Ld. AO has erred in not granting enhanced deduction under Section 10A of the Act based on the disallowances made in the Assessment Order.
The Assessee prays that enhanced deduction under Section 10A of the Act on the disallowances made by the Ld. AO should be granted to the Appellant.
Common Grounds
Ground No. 14
On the facts and in the circumstances of the case and in law, the Ld. AO has erred in charging interest under Section 234B of the Act.
The Appellant prays that the charge of interest under Section 234B of the Act should be deleted.
Ground No. 15
On the facts and the circumstances of the case, the Ld. AO has erred in initiating penalty proceedings under section 271(1)(c) of the Act.
The Appellant prays that the penalty proceedings ought to be dropped.
Your Appellant craves leave to add, amend, alter, withdraw, modify and /or substitute, and to withdraw the above grounds of appeal.”
The grounds No. 1 to 5 and 8 deals with the TP adjustment for payment
of commission to Associate Enterprises (AEs).
The brief facts in this case are that during the assessment year 2012-
13, the assessee had paid Rs.3,73,21,943/- towards commission to its
Singapore Entity ( hereinafter referred to as ‘TTPL’) on the ground that AE is
5 ITA No. 723/PUN/2017 A.Y.2012-13
helping the assessee in getting discounts from Dassault UK from whom the
assessee was procuring software licenses. The background fact of the case is
that the assessee has its Singapore Entity as TTPL and the assessee is
purchasing software licenses from Dassault UK. TTPL was facilitating the
purchase process on behalf of the assessee so to get discount from Dassault
UK in purchase of those software licenses and in view of those services
rendered by the TTPL, commission was paid by the assessee to the said
Singapore Entity i.e. TTPL.
The assessee had filed detailed submissions before the Transfer Pricing
Officer (TPO). Therein, the assessee has stated that TTPL is engaged in the
business of providing procurement and marketing support services. TTPL has
assisted the assessee in securing favourable terms from Dassault Systems U.K
for procuring the software, in terms of the discounts received from Dassault is
in the range of 20% to 35%. It is not that the TTPL is only procuring and
providing marketing support services to assessee but to other third party also
who are based outside Singapore and from them TTPL is charting higher rate
of commission i.e. @15% of the sales whereas from the assessee TTPL is
charging @6% of sales as commission. The assessee is also paying commission
to third parties @ 6.5% and @7%. The assessee has entered into commission
agreement with TTPL which operates as a centralized entity for provision of
procurement and marketing support services to Tata Technologies Group for
provision of procurement and marketing support services. Pursuant to the
agreement, TTPL has rendered procurement and marketing support services
which included the following activities:
i) Assistance in procuring software at competitive prices and maintenance of vendor relationship.
ii) Global Customer relationship
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iii) Lead Generation
iv) After Sales support.
These functions undertaken by the TTPL enable the assessee to not only
secure favourable terms from Dassault for procuring the software but also
help the assessee in obtaining more business. These are the services rendered
by TTPL for which commission had been paid by the assessee @6% as per
commission agreement with TTPL.
The prayer of the assessee is that with respect to assessment year 2010-
11, the same issue was raised and the TPO therein was convinced with the
submissions of the assessee and has accepted the same transactions to be at
arm’s length. That even in subsequent assessment year 2011-12 as well, this
transaction was accepted to be at arm’s length and therefore, for assessment
year 2012-13 also, the same consistency should be followed. The TPO has
analyzed the transactions entered into by the assessee and TTPL in detail. TPO
as per reasons recorded in his order, has decided the arm’s length price of the
international transaction of the assessee to be considered as ‘Nil’ resulting in
TP adjustment of Rs.3,73,21,943/-.
If we look into the crux of the reasons recorded by the TPO, he has not
accepted the international transaction of the assessee to be at arm’s length.
According to the TPO, the assessee was not able to demonstrate through
evidences the benefit received by it in terms of discount and more effectively,
as to what specific service was provided by TTPL to the assessee in order that
payment of commission to TTPL could be justified.
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Thereafter, the matter travelled up to the DRP. It was observed therein
that the assessee has failed to furnish any evidence in support of rendition or
receipt of the services as per agreement with TTPL. Further, the assessee has
failed to furnish any tangible evidence to demonstrate that the TTPL has
played any role whatsoever in any sale or any AMC contract of any software
for the assessee. The DRP further observed that there was agreement between
TTPL and the assessee dated 01.12.2007. However, the assessee has not
furnished any evidence to demonstrate that the TTPL has rendered any service
or that the assessee has received any service in connection with sale of any
software or any AMC contract. Thereby, the DRP carried forward the
observations of the TPO and wanted more tangible evidences in order to justify
commission payment by the assessee to TTPL. The DRP, therefore, upheld the
observation of the TPO that since no services has been received by the
assessee and therefore, arm’s length commission paid is ‘Nil’.
At the time of hearing, the Ld. AR of the assessee first and foremost
invited our attention to page 236 of the paper book wherein the commission
agreement is there between the assessee and TTPL. That on the basis of the
commission agreement, the Ld. AR demonstrated that there was an
importance of service which was required by the TTPL to be rendered to the
assessee in order to facilitate procurement of software licenses from Dassault
UK in Singapore. This commission agreement demonstrated that TTPL has to
look into over all transaction essentially maintenance of customer relation
with the assessee and Dassault UK and also to provide discount for the same
purchase from Dassault UK. The entire price negotiation and the final price of
charge and everything is as per negotiation of assessee and Dassault UK. TTPL
is only handling the procedure so that discount could be availed from Dasault
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UK and also to look into smooth functioning of the transaction. There are
specific activities which the TTPL has to perform which is given in the said
agreement. The commission was earlier fixed @ 4.25% which at the relevant
year is @6% as is evident at page 243 of the paper book.
The Ld. AR of the assessee further appraised the Bench that the
assessee obtained no objection from Dassault UK and only thereafter, TTPL
was appointed as commission agent for procuring the purchases of software
licenses. This no objection receipt from Dassault UK dated 16.11.2007 is
placed at page 277 of the paper book whereas the commission agreement
dated 01.12.2007 between the assessee and TTPL which is placed at page 236
of the paper book. Therefore, it is absolutely clear that the assessee first
obtained no objection dated 16.11.2007 from Dassault UK and thereafter on
01.12.2007 entered into the commission agreement with TTPL. This negates
the argument of the TPO that the assessee was already in business relation
with Dassault UK and therefore, there was no need for any other entity to step
in towards facilitating business transaction.
8.1 The Ld. AR of the assessee also demonstrated that there are various
emails annexed in paper book at page No.281 to 302 wherein it can be fairly
seen that there are three parties involved in the entire transaction viz.
assessee, TTPL which is the Singapore Entity of the assessee and Dassault UK
Singapore concern from whom the software licenses are purchased by the
assessee. The Ld. AR vehemently argued that this evidence clearly shows that
TTPL was involved at every stage to facilitate business transaction between the
assessee and the Dassault UK. The Ld. AR submitted that there cannot be
anything else or more circumstantial evidence to substantiate these
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transactions. The Ld. AR further stated that the assessee had paid
commission to other third parties @6.5% and @7% as is evident from pages
314, 315 and 320 of the paper book.
The Ld. DR , per contra submitted that all the emails submitted by the
assessee do not reveal the payment of commission. The Ld. DR placing
reliance on the directions of the DRP contended that the DRP evaluated the
facts that assessee did not demonstrate through tangible evidences any
service received for which the payment of commission was made. The Ld. DR
further stated that the comparables regarding payment of commission relied
on by the assessee relates to commission paid on sale transaction whereas in
the present case of the assessee, it is commission paid with regard to
discounts and other services provided to the assessee by TTPL with respect to
purchases made from Dassault UK. Therefore, comparables commission
demonstrated by the Ld. AR of the assessee should not to be relied upon.
We have perused the case records and heard the rival contentions and
analyzed the facts and circumstances in this regard. The facts on record
shows that there is a commission agreement dated 01.12.2007 between the
assessee and TTPL. That on examining the clauses contained therein and after
giving considerable thought on those clauses, it is crystal clear that TTPL was
facilitating the purchases in respect of the assessee from Dassault UK. It was
the responsibility of TTPL to undertake marketing efforts through
telemarketing and inbound inquiries through its dedicated support. TTPL also
worked towards maintenance of relationship with the key global customers of
the assessee. The agreement also specifies that the said service through TTPL
was at arm’s length commission @6%.
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Before us, it is demonstrated by the Ld. AR through a series of emails
exchanges between the assessee, TTPL and Dassault UK. This evidence
demonstrates that purchases of software licenses were done by the assessee
from Dassault UK and TTPL was facilitating the entire process and ensuring
the smooth selling of the transaction. These are sufficient evidence to
demonstrate the services rendered by the TTPL for which commission payment
was made to the AE. Taking the practicability of the business in to
consideration, these are the tangible evidence that can be placed on record
which the assessee has done in order to justify the commission payment.
There is copy of commission agreement. There is also no objection letter and
series of emails exchanged involving all the concerned parties.
Taking the totality of facts and circumstances on record, we are of
considered view that arm’s length commission @6% to TTPL is justified and we
direct the TPO to determine the arm’s length commission of the international
transaction accordingly. Thus, grounds of appeal No. 1 to 5 and 8 raised by
the assessee are allowed.
Grounds of appeal No. 6 and 7 are not pressed by the assessee.
Accordingly, ground No. 6 and 7 are dismissed as ‘not pressed’.
With regard to ground No.9, the Ld. AR of the assessee stated that this
issue is covered against the assessee with its own case for assessment year
2001-02 & 2003-04 in ITA No.1345 & 1346/PUN/2011.
We have perused the order of assessee’s own case in ITA No. 1345
&1346/PUN/2011. We find that the issue is decided against the assessee.
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Hence, respectfully following the same decision, this ground of appeal is
dismissed. Thus, grounds of appeal No.9 raised by the assessee is
dismissed.
With regard to ground No.10, the Ld. AR of the assessee submitted that
this issue is covered against the assessee in its own case for assessment year
1998-99 & 2000-01 in ITA No. 86 & 1394/PUN/2003.
We have perused the order of assessee’s own case in ITA No. 86 &
1394/PUN/2003. We find that the issue is decided against the assessee.
Hence, respectfully following the same decision, this ground of appeal is
dismissed. Thus, grounds of appeal No.10 raised by the assessee is
dismissed.
Ground No.11 pertains to disallowance u/s.14A r.w. Rule 8D. The facts
with regard to the issue and submissions of the assessee are as under:
“7.1 The AO has noted that assessee is having exempt income of Rs, 33.2 crores including dividend of Rs. 16.47 crores and income claimed exempt u/s 10AA Rs. 16.82crores. The AO has also rioted that assessee has total investment in such assets yielding exempt- income is Rs. 147 crores, interest expenditure of Rs. 1.54 crores and that assessee has made self disallowance of Rs. 17.44 lakhs u/s 14A. On these facts, the TPO has noted that suo moto disallowance made in adequate and therefore, requested the assessee to explain why disallowance apply Rule 8D should not be made. After considering the submissions made, the AO has applied Rule 8D and computed the disallowance u/s 14A Rs.1,04,17,267/-. 7.2 It is submitted that during the year under consideration, the assessee has earned a dividend income of Rs.16,47,19,200 from various mutual funds. The same was exempt as per provision of Section 10(35) of the Act. 7.2.1 The assessee has made investments in various mutual funds units out of its own funds i.e. through its internal accruals, available surplus funds & funds available from Investment made by Private Equity Investors by purchasing Equity shares of INR 141,05,99,720 issued to private equity investors during the year. It has not borrowed any funds for the purpose of making the above investments. Further, it did not incur any specific expenditure to earn aforesaid exempt income.
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7.2.2 The assessee submits that it has on its own disallowed the expenditure of Rs.17,43,743 towards indirect expenses ('without prejudice' as per working submitted during assessment proceedings) for the management of the investments in the mutual fund units and for earning dividend income from same. Hence, the question of computing disallowance of any expenses incurred in relation to such dividend income under section 14A(1) of the Act read with Rule 8D does not arise. 7.2.3 The assessee submitted that the provision of Section 14(2) and (3) could be applied only if the condition prescribed in the provisions of Section 14A(1) is satisfied i.e. there should be expenses incurred in relation to earning of the exempt income for the AO to apply the provisions of sub-Section (2) or (3). The AO cannot apply the provisions of Section 14A(2) without satisfying that there exist expenses in relation to earning of exempt income on the basis of mere presumption. 7.2.4 Further, the assessee submits that. in view of the clear language of Section 14A(2) of the Act, Rule 8D ought to have been applied only if the Ld. AO is not satisfied with the correctness of the subject claim of the assessee i.e. non-applicability of Section 14A(1) of the Act, in its case and after it has established a direct nexus between expenses incurred and exempt income.”
That after considering the facts of the case and submissions of the
assessee, the DRP on this issue upheld the addition by the Assessing Officer
as per reasons recorded in the assessment order.
At the time of hearing, the Ld. AR of the assessee submitted that the
Assessing Officer can invoke section 14A only after recording satisfaction with
regards to accounts of the assessee. We have looked into this limb of
arguments and found satisfaction. The second limb of arguments advanced by
the Ld. AR is that there cannot be any disallowance for interest expenditure
u/s.14A r.w. Rule 8D(ii) when interest income earned by the assessee is more
than its interest expenditure. The Ld. AR further submitted that where the
assessee’s own surplus funds are more than its investment, no disallowance
to be made for interest expenses u/s.14A of the Act. With respect to Rule
8D(2)(iii), the argument of the Ld. AR was that only those investments which
yielded exempt income to be considered while calculating disallowance under
Rule 8D(2)(iii).
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We have examined the facts and circumstances of the present case and
heard the contentions. However, with regard to the interest income part as
contemplated under Rule 8D(ii) and with regard to the investment which
yielded exempt income which are to be considered while calculating
disallowance under Rule 8D(2)(iii). These aspects have to be verified in
detailed. Therefore, we are of considered view that this issue is restored back
to the file of Assessing Officer for verification and re-adjudication of the same
after providing reasonable opportunity of hearing to the assessee. Accordingly,
ground No.11 raised in appeal by the assessee is allowed for statistical
purposes.
With regard to ground No.12, it pertains to the provision for written
back for Mediclaim Insurance Scheme (Medicare) for employees not to be
considered as taxable income. The Ld. DRP has held as follows:
“8.1……..In terms of the Service Rules of the assessee, the employees are entitled for Mediclaim InsuranceCoverage. for hospitalization (up to prescribed limit) after retirement and for reimbursement of medical expenses upto Rs 600 annually as domiciliary medical expenses. The scheme extends the benefit to all retired employees and their spouses till the retired employee attains the age of 70 years. 8.1.1 As regards the reversal (net of payments) of Rs 3,60,976/- during the year, this was offered to tax by the assessee since the provision made in earlier assessment years was claimed as deductible by the assessee In the respective earlier assessment years. It is an undisputed position of the law that reversal of a provision is liable to income-tax only where a deduction was allowed for the underlying provision in the earlier assessment years in view of provisions of Section 41(1). 8.1.2 Notwithstanding the fact that no deduction of provision for medicare expenses was granted to the assessee for earlier assessment years, the Ld. AO has concluded the assessment by retaining, the reversal (net of payments) of Rs.3,60,976/- which was credited to the Profit and Loss Account. Such amount of provision for medicare expenses for which no deduction was granted in earlier assessment years, ought to have been excluded from the taxable income. If it is not allowed, the assessee would suffer taxability at two points i) when provision was disallowed in earlier years and ii) when provision is written back to the Profit and Loss Account. This is obviously contrary to the law. Therefore, it is submitted that, such reversal which is credited to the Profit and Loss Account needs to be excluded.
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8.1.3 The assessee has also submitted that the provision made for medicare expenses has been disallowed in the earlier assessment years when it was created. In this regards the appeal is pending before the Hon'ble High Court. 8.2 We have considered the facts and the submissions made. We do not find any discussion in this respect in the draft order. The assessee has also not furnished the necessary evidence in support of its claim and that the amount reversed in the profit and loss account Rs.3,60,976/- has already been taxed in the past. However, the assessee has submitted that deduction for provision created as disallowed and so upheld by ITAT Appeal has been filed by the assessee before High Court and the matter is sub-judice. Considering the fact that deduction has already been claimed in the past, non-taxation of reversal of such deduction would amount to double deduction of the same amount. It is not permitted. Since the allowability of deduction is sub-judice, reversal of same is taxable. Accordingly, the order is upheld and the objection in this respect is rejected.”
That Before us, at the time of hearing the Ld. AR of the assessee
submitted that during this year, provision for Medicare expenses is written
back in books of account and offered to tax in return of income. It is humbly
submitted that the same should not be taxed by the Assessing Officer as it will
lead to double disallowance in view of the fact that when such provision was
created in earlier years, the same was disallowed by the AO in those years.
We have perused the case records in this regard and heard the rival
contentions. We find that if in the earlier year, the Assessing Officer has
already disallowed such provision for those years, then in the present year
when the assessee has specifically offered this to tax in return of income, the
same should not be taxed again by the Assessing Officer. Therefore, this issue
needs to be verified. Accordingly, this matter is restored back to the file of
Assessing Officer for verification and re-adjudication after following the
principles of natural justice. The Assessing Officer shall grant reasonable
opportunity of hearing to the assessee. Thus, ground No.12 raised in appeal
by the assessee is allowed for statistical purposes.
15 ITA No. 723/PUN/2017 A.Y.2012-13
In ground No.13, the assessee had claimed enhanced deduction u/s.10A
of the Act. The assessee has placed its reliance on the decision of the Hon'ble
Jurisdictional High Court in the case of CIT Vs. Gem Plus Jewellery India Pvt.
Ltd. reported as 330 ITR 175 and also the decision of Chennai Tribunal in the
case of iNautix Technologies India Private Limited (2016) 69 taxmann.com 53
and submitted that deduction u/s.10A should be recomputed on the basis of
enhancing gross total income after considering various disallowances.
The Ld. DRP on this issue has held as under:
“9.2 We have considered the facts of the case and the submissions made. The assessee has submitted that the deduction under Section 10A is admissible on the profit enhanced on account of disallowances made. The assessee has placed its reliance on the decision of the Hon'ble Jurisdictional Bombay High Court in case of Gem Plus Jewellery India Private Limited (2011) 330 ITR 175, wherein the Hon'ble High Court held that the contention of the revenue that in computing the deduction under section 10A on the addition made on account of the disallowance of the provident fund/ESIC payments ought to be ignored could not be accepted. Therefore, the Tribunal was justified in directing the Assessing Officer to grant the exemption under section 10A on the assessed income, which was enhanced due to disallowance of employer's as well as employee's contribution towards PF/ESIC. Further the DRP has also placed its reliance on the decision Chennai Tribunal in case iNautix Technologies India Private Limited (2016) 69 taxmonn.com 53, where in ITAT held that amount of disallowance made under section 14A to be considered as part of business profit for computing deduction under section 10A.
9.3 However, recently the CBDT circular has issued circular 37 of 2016 wherein CBDT has accepted the settled position that the deduction under Chapter IV-A of the Act is admissible on the enhanced profit on account of disallowance made which related to business activity against which chapter VI-A of the Act deduction has been claimed. However, the circular has not mentioned about deduction u/s.10A of the Act. Section 10A is not included in Chapter IV A of the Act. Hence, this section cannot be held applicable in this case. Otherwise, also as per section 92C(4) of the Act, TP adjustment does not qualify for enhanced deduction u/s.10A as per the Act. In view of the above, the order is hereby upheld in this respect and the objections are rejected.”
In view of the matter, we are inclined to go with the view of the DRP on
this issue. We observe that within the parameter of Income Tax Act, 1961, as
per Section 92C(4) of the Act, TP addition has to be separately done, whatever
16 ITA No. 723/PUN/2017 A.Y.2012-13
may be the addition in respect of other aspects but that cannot be brought together with TP adjustment or addition. Therefore, it does not qualify for enhanced deduction u/s.10A of the Act. Accordingly, ground No.13 raised in appeal by the assessee is dismissed.
Grounds of appeal No. 14 and 15 are consequential and hence, require no adjudication.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on 01st day of February, 2019. Sd/- Sd/- R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 01st February, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-13, Pune. 4. The Pr. CIT-5, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.
17 ITA No. 723/PUN/2017 A.Y.2012-13
Date 1 Draft dictated on 30.01.2019 Sr.PS/PS 2 Draft placed before author 01.02.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order
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