T vs. MOTOR COMPANY LTD.,CHENNAIVS.ACIT, CHENNAI

आयकर अपीलीय अिधकरण, ’डी’
यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘D’ BENCH: CHENNAI

ीएबीटी. वक
, ाियकसद एवं
एवं
एवं
एवं

ीअिमताभशुा, लेखासद केसम

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

आयकरअपीलसं./ITA No.672/Chny/2017
िनधारणवष/Assessment Year: 2012-13
M/s.TVS Motor Co. Ltd.,
No.29, Haddows Road,
Chennai-600 006. v.
The ACIT,
Corporate Circle – 3(1),
Chennai.
[PAN: AAACS 7032 B]

(अपीलाथ/Appellant)

(यथ/Respondent)

अपीलाथ क ओर से/ Appellant by :
Shri Vikram Vijayaraghavan,
Adv.
यथ क ओर से /Respondent by :
Shri A. Sasikumar, CIT
सुनवाईकतारीख/Date of Hearing
:
11.11.2024
घोषणाकतारीख /Date of Pronouncement
:
24.01.2025

आदेश / O R D E R
PER ABY T. VARKEY, JM:

This is an appeal preferred by the assessee against the order of the Learned
Assessing
Officer on 24.01.2017
passed u/s.143(3) r.w.s.92CA(4) of the Income Tax Act, 1961 (hereinafter in short "the Act”), pursuant to the directions of the Dispute Resolution Panel-2
(hereinafter in short ‘DRP’), Bengaluru, dated 19.12.2016. 2. Ground Nos.1 to 4 are general in nature and therefore, it does not require any adjudication.

&6 are against the transfer pricing de by the TPO in relation to comfort provided by the appellant t d are that the assessee is engaged wheelers. It had given corporate gu
0/- on behalf of the foreign subsidia esia (‘AE’). The assessee had also g
0,57,00,000/- to Banks/AE for the ee didn’t charge any fee towards ued in favour of the AE. The TPO is djustment in relation thereto on the P in the earlier year viz., 2% of and LOC. Aggrieved, the asses
RP which confirmed the action of the efore us.
arties. The Ld. AR for the assessee te guarantee and Letter of Comfor e AE, it didn’t have any bearing of p e and therefore could not be re n and be benchmarked under the t rd, the Ld. AR relied upon the decisi

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

g adjustment of the corporate o its AEs.
in the business uarantee to the ary M/s PT TVS given Letters of loans borrowed such corporate s noted to have e same lines as f the value of ssee preferred e TPO. Now, the has contended t was provided profits, income, egarded as an transfer pricing on rendered by this Tribunal in their ow provisions of Section 9
Limited. In the said c providing Corporate Gu transaction after retros assessee argued that provided by the Parent shareholders. Further, t enlarge the scope of ITA No.672/Chny/
M/s
:: 3 ::

wn case for AY 2011-12. We howeve
2B has been amended by the Fina e Explanation to Section 92B, the g ee has been clarified to be in n. We note that the Hon’ble Bomba verest Kanto Cylinders Ltd (378
ue in light of the provisions of Sectio conclusion that the corporate guara its AE is an international transacti l issue came up before the Hon’b he case of PCIT v. Redington (Ind he Hon’ble Madras High Court held out in providing guarantees a suance of corporate guarantee is c ional transaction consequent to he Finance Act, 2012 and, according e for guarantee commission. The re s follows: - k Guarantees and Corporate Guarantees war e
Hyderabad Tribunal in the case of Prolifics Cor case, the Revenue contended that the transa uarantee is covered by the definition of inter spective amendment made by Finance Act, 20
the Corporate Guarantee is an additional gu t company. It does not involve any cost of ris the retrospective amendment of Section 92B d the term international transaction to incl

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

er note that the ance Act 2012, uarantees/NOC the nature of y High Court in 8 ITR 57) has on 92B and the antee issued by on. We further le juri ictional dia) Ltd. (430
that, inherent nd hence the covered by the retrospective gly adjustments elevant findings explained rporation action of rnational
012. The uarantee, sk to the does not ude the Corporate Guarantee i
Tribunal held that in ca therefore, there is alwa may be a reason that F from Associated Enterp observed that this po involves risk and there increasing its creditwo
Financial institutions or & L account, but inher
Ultimately, the Tribun commissions both on th the guarantee provided of Associate Enterprise.
76. In the light of the a error in deleting the ad and restore the order pa
3.3
We also note that subsequent AY 2013
No.2404/Chny/2019, ha be an international tra
Accordingly, the first ple
3.4
Hence, the limited the guarantee commiss notice that this Tribuna the decision of the Ho
Everest Kento Cylin guarantee commission direct the AO to adopt t and accordingly re-com therefore stands partly
ITA No.672/Chny/
M/s
:: 4 ::

n the nature provided by the assessee there ase of default, Guarantor has to fulfill the liab ays an inherent risk in providing guarantees a Finance provider insist on non-charging any com prise as a commercial principle. Further, it h osition indicates that provision of guarantee e is a service provided to the Associate Ente orthiness in obtaining loans in the market, from others. There may not be immediate cha rent risk cannot be ruled out in providing gua nal upheld the adjustments made on gu he guarantees provided by the Bank directly and to the erstwhile shareholders for assuring the p bove decisions, we hold that the Tribunal comm dditions made against Corporate and Bank Gu assed by the DRP.
t this Tribunal in the assessee’s ow
-14 in IT (TP) A No.66/Chny ad held the transaction of corporat ansaction by benchmarking the s ea of the assessee is hereby rejected d issue now to be adjudicated is th ion. In this regard, the Ld. AR had al in their own case for AY 2013-14
on’ble Bombay High Court in the c nders Ltd (supra) had ascerta at 0.5%. Respectfully following the guarantee commission @ 0.50%
mpute the transfer pricing adjustmen allowed.

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

ein. The bility and and that mmission has been e always rprise in be from rge on P arantees.
uarantee d also on payment mitted an uarantee wn case for the y/2019 & ITA te guarantee to same at 0.5%.
d.
he ALP value of brought to our
4, by relying on case of CIT v.
ained the ALP the same, we
% as against 2%
nt. This ground

"92B, (1) For th
92E "internation more associated in the nature property, or pro any other such losses or asse agreement or enterprises for to, any cost or e
ITA No.672/Chny/
M/s
:: 5 ::

against the action of the lower aut on expenses incurred during the y transaction and thereafter making relation thereto.
are that, the TPO noted that, the on/market development expenditur
Crs. According to the TPO, althoug but the Indonesia AE was a licensed r Advertising & Marketing Expenses ed, ought to have been borne by In he TPO accordingly show caused the nsaction should not be considered a MP expenditure incurred on behalf o t recoverable from the AE at cost a to have rejected the objections of t section 92B(1) of the Act may be made at th national transaction as under:
he purpose of this section and sections 92,92C, nal transaction" means a transaction between d enterprises, either or both of whom are non-re of purchase, sale or lease of tangible or in ovision of services, or lending or borrowing m transaction having a bearing on the profits, ets of such enterprise, and shall include a arrangement between two or more as the allocation or apportionment of, or any con expense incurred or to be incurred in connectio

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

horities holding year was in the TP adjustment e assessee has re in Indonesia gh the assessee d manufacturer
(hereinafter in donesia AE and assessee as to as international of the AE ought along with mark he assessee by his stage
92D and n two or esidents, ntangible oney, or income, mutual ssociated tribution on with a benefit, service more of such en

The transfer pricing reg overall arrangement/ su

Section 92F (v) of the I

"transaction inc concert, whethe formal or in writ

Similarly, Rule 1

"the contractua writing) of the t the responsibilit respective partie

It is evident from the a two AEs for allocation o expense incurred or to facility provided or to be international transactio the cost of AMP for the International transactio

Apart from this, in the inserted w.r.e.f. 01.04.2
under the definition o intangible property', the expression intangible p related intangible asset logos; customer related contracts, customer rela intangible assets, such agreements, union con institutional goodwill, professional, celebrity methods, programmes, forecasts, estimates, cu
ITA No.672/Chny/
M/s
:: 6 ::

or facility provided or to be provided to any nterprises."
gulations also require that it is not the 'form'
ubstance of the transactions that must be kept i ncome-tax Act states as below:
cludes an arrangement, understanding or a er or not such arrangement, understanding or ting;"
10B (2)(c) states:
l terms (whether or not such terms are form transactions which lay down explicitly or implic ties, risks and benefits are to be divided betw es to the transactions;"
bove extracted provision that an arrangement or apportionment of or any contribution to, any o be incurred in connection with a benefit, se e provided to any one or more of such enterpris n. In this case, admittedly, the assessee has e benefits of its AE accordingly AMP expenditu n under section 92B(1) of the Act.
Finance Act, 2012, an explanation to Sec.928 h
2002 which has included the 'use of intangible p of "International transaction. As for the defin e explanation also provides an inclusive definitio roperty [w.r.e.f. 01.04.2002). This includes m ts, such as, trademarks, trade names, brand d intangible assets, such as, customer lists, c ationship, open purchase orders; human capita h as, trained and organized work force, emp ntracts; goodwill related intangible assets, s professional practice goodwill, personal goo goodwill, general business going concern
, systems, procedures, campaigns, surveys, stomer lists, or technical data.
en upheld by a plethora of decisions given rec
Hon'ble ITAT. In the case of M/s L.G. Electron
A No.5140/Del/2011), the Special Bench of ITA e law on the various aspects of transfer pricing olding it to be an international transaction.
say that brand promotion expenses have not be on marketing and advertisement, the asse e of its brand in a foreign market, which admitte netrate.
stated that TVSM has incurred marketing expe ndonesia being the economic owner of the bran d, asset utilized and risk assumed (FAR analysis produced as below:

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

y one or but the n mind.
action in action is mal or in citly how ween the between y cost or ervice or ses is an incurred ure is an has been property'
nition of on of the marketing names, customer al related ployment such as, odwill of n value; studies, cently by ics India
AT, New g on the enefitted essee is edly, the enses to d.
s) of the TVS Mo
Conceptualize the brand promot the nature of promotional acti promotional events, roadshows,
Decide and allocate the bud
Indonesian market.
Identify third party vendors in promotion services
Negotiate the contracts and th enter into contracts
Discussion from time to time promotion activities with the ve
Create marketing and promo through the third party vendors
Monitor the third party vend promotion activities
Payment to third party vendors

otor Company Limited tion strategy in the Indonesian market. Decide vities to be undertaken - whether to opt for , print advertisements or sponsorships.
dget for brand promotion activities in the the Indonesian market for availing the brand e pricing arrangements with the vendors and e on the implementation strategy for brand ndor, providing guidance and co-ordination otional materials (flyers/leaflets/ brochures) s dors in the execution phase of the brand for the services received.
LP of AMP expenses, it is important to underst promoting a brand in Indonesia as a legal owne esia being licensed manufacturer by way of inc n Indonesia. As per the argument of the asses incurred higher percentage of AMP expenses i ership of TVS brand in Indonesia vests with AE may be also possible that the percentage
PT TVS Indonesia is less than what th manufacturer would have incurred in Indonesia ndia is providing services to develop TVS b umstances whatever the expenditure incurred a should be reimbursed by the AE along with th statement of the assessee, the percentage he other independent parties Indonesia is not a his scenario it is more appropriate to conside and it has to be ascertained whether TVSM I nditure in other countries where the spares and M India. The search resulted in that TVSM In other countries such as Colombia, Banglades
Singapore and Sri Lanka where TVSM India enses. It means that due to the presence AE e company incurred huge amount as AMP exp that TVSM India is a service provider in respect donesia.
aken the stand that arrangements with non-AE brand promotion expenses incurred by the com ness model and the market catered to in th pletely different.
not explained how the functions of the TVSM I
AE PT TVS Indonesia and with other independen t and other functions of the assessee company explained how the functions of TVSM India is ade and AMP expenditure incurred in Sin

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

PT TVS
Indonesia
--

--
--
--
--
--
--
-- and that er or it is crease of ssee that t means
E PT TVS of AMP he other
. If so it brand in d by the he mark- of AMP available er TVSM ndia has vehicles ndia has h, Hong has not PT TVS penditure t to AMP s cannot mpany in hese two ndia are nt parties is same.
different ngapore,

Bangladesh, Hong Kong the AMP expenses in considered as compara based on the FAR analy for Indonesia and other

Description
Sale
Indonesia
51,17
Other Countries
1068

The AMP/ Sales Ratio of third parties) is arrive incurred in favour of AE

Advertisem
Total AMP
Sales of th
AMP/Sales

The ALP of the Intern expense leading to the c

Total sales to AE
Arm's length level of AMP e
Arm's length AMP
Amount actually spent on A Amount spent in excess as Mark-up @ 6.12%
The amount by which th reimbursed by A.E, and fo made

The ALP calculated on promotion has not bee with section 92C (3). H the provision of sub-s
9,72,301 and Rs. 78,70
up on Excess AMP. H amounting to Rs. 78,70
ITA No.672/Chny/
M/s
:: 8 ::

g, Japan and Nepal. Considering the facts of t curred by TVSM India in other countries able and the ALP of AMP expenses may be co ysis of TVSM India. The segmental details of TVS countries are given below:
s (in Rs.)
AMP (in Rs.)
AMP/S
7,37,520
12,95,68,031
25.31%
8,48,70,186
2,03,31,969
(14,99,00,000
-
12,95,68,031)
(total advt. exp. In Forex
Advt.
exp in Indonesia)
0.19%
f TVSM India for other countries (export to inde ed at 0.19% against the AMP sales ratio of PT TVS Indonesia.
ark-up of ALP of the AMP services rendered ss AMP, an independent search was conducte as comparable companies. The margin of 4 com as Annexure and the same is 6.12% (OP/OI).
cussion made above, the amount which repres ve been compensated to the assessee compan
Particulars
Amount in Rs.
ment and publicity
12,95,68,031
expenses
14,99,00,000
he assessee to AE
51,17,37,520
s Ratio of the assessee
25.31%
national transaction related to the incurring creation a marketing intangible is calculated as Particulars
Am exp. (% of sale)
AMP exp.
s service provider he assessee company should have been or which the adjustment is proposed to be n the international transaction in respect t n determined by the assessee company in acc
Hence the arms length price has been calculate sections (1) and (2) of 92C and determined
0,058 towards reimbursement of excess AMP a ence an adjustment to the income of the a 0,058 towards mark-up on service rendered fo

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

the case may be omputed
SM India
Sales Ratio
%
ependent
25.31%
towards d and 4
mparable ents the ny is re- of AMP under:
mount in INR
51,17,37,520
0.19%
9,72,301
12,95,68,031
12,85,95,729
78,70,058
13,64,65,787
o brand cordance d as per d as Rs.
nd mark assessee or brand promotion and Rs. 1
incurred towards brand assessee.

The important point is need not to be a inte segment. The assessee that this type of brand p

No independent ente promotion and brand goes to AE. Though the such expenditure on th whole process the actua going up in Indonesia assessee on AMP, expo gone up which reduces adjustment is required.”
4.2
Aggrieved, the a which was dismissed.
before us.
4.3
Assailing the acti expenses cannot be r
Chapter X of the Act. I
Hon’ble Delhi High Cou
ITR 117), Bosch & L
(381 ITR 227) and H
(237 taxman 304). He rendered following the (supra). The Ld.AR furt correctly appreciate the impugned adjustment.
ITA No.672/Chny/
M/s
:: 9 ::

2,85,95,729 towards reimbursement of exp d promotion are to be made to the income to allocate the expenditure to AE segment, fo ernational transaction but it should be relate has not produced any uncontrolled comparable promotion expenditure is routine in the industry rprises would incur huge expenditure on promotion in the circumstances that ultimate e assessee is a legal owner of the brand, by i he brand, benefit goes to AE PT TVS Indonesia al advantage is accruing to the AE. Not only th a, due to extraordinary expenditure incurred ort cost of goods from TVSM India to the asses the profitability of the assessee. Therefore, an ”
assessee preferred an objection b
Being aggrieved, the assessee is on of the TPO, the Ld. AR submi regarded as an international tran n this regard, he relied upon the d rt in the cases of Maruti Suzuki I
Laumb Eye Care India Pvt Ltd
Honda Siel Power Products Pvt e also relied upon several decisions foregoing judgments of Hon’ble De ther submitted that the lower auth e basic facts and therefore erroneo
The Ld. AR explained to us that,

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.
Ltd vs. DCIT of the Tribunal elhi High Court horities did not ously made the in all the AMP cases, impugned by th foreign headquarter / A incurring marketing ex that the incurrence of marketing tangibles w foreign company and th
Indian subsidiary for it foregoing principle, the assessee was the owne and therefore, the AMP owner, i.e. the assessee expenses, then the fore from the assessee. Acco blow hot and cold by ta cases. The Ld. AR acco be set aside. He also computing the adjustm taken on record.
4.4
Per contra, the Ld assessee’s own case for action of the TPO/DRP/A ITA No.672/Chny/
M/s
:: 10 ::

e Revenue, the position taken is t
AE owns the brands and the subsidia xpenses and therefore, the Revenu f marketing expenses by the Sub hich enhanced the brand values herefore the foreign company should s marketing spend with a mark-up e Ld. AR submitted that, in the pre r of the brand and its subsidiary w
P spends ought to be incurred only e and if the subsidiary in Indonesia eign AE ought to recover the same w ording to the Ld. AR therefore, the R king completely contrary positions a rdingly urged that the transfer pric o additionally objected to the m ment and his written arguments, w d. DR relied on the decision of this r AY 2011-12, wherein, the Tribunal
AO.

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

that, the global ary in India was ue took a view sidiary created owned by the d reimburse the p. Applying the esent case, the as in Indonesia y by the brand incurs any AMP with a mark-up
Revenue cannot across different cing adjustment methodology of which has been Tribunal in the has upheld the 4.5
We have heard bo
It is noted that the advertisement and prom has contended that, it therefore this expenditu its brand value. Further
Indonesia, which in a expenses. At the same licensed manufacturer ownership of brand in marketing distribution w has averred that, the A and that there was n marketing expenses inc
He further urged that t the assessee and the international transaction vehemently stressed on make the transfer prici been specifically rejecte
Sony Ericsson Mobile
ITR 118) and for these
ITA No.672/Chny/
M/s
:: 11 ::

oth the parties and perused the mat e assessee had incurred expend motion of TVS products in Indonesia t was the economic owner of th ure was incurred for its own benefit r, the assessee has also directly sold ssessee’s view, necessitated incu time, the fact also remains that th was legally entitled to exploit n Indonesia and thus the risks a was required to be borne by it. The L
E would have incurred marketing ex othing brought on record by the curred by the Indonesian AE was les there was no arrangement or agree
AE in this regard, and therefore, n within the meaning of Section 92B n the incorrect methodology followed ng adjustment i.e. the bright line t ed by the Hon’ble Delhi High Court e Communications India (P.) Ltd e reasons, he has urged that the de

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

terial on record.
diture towards a. The assessee he brand ‘TVS’
as it enhanced d its products in rrence of AMP he AE being the the economic associated with Ld. AR however xpenses as well
TPO that the ss than normal.
ement between there was no B of the Act. He d by the TPO to test, which had t in the case of d. v. CIT (374
cision rendered by this Tribunal in thei incuriam.
4.6
Having considere jurisprudence, we find slightly different than t but at the same time, th relevance to the impug
Hon’ble Delhi High Cour plea that the Indian su its own right for the lic such AMP expenses co holding company on th vested with the latter, company by enhancing it was necessary for the or understanding betwe particularly negated the 4.7
Now in the prese
Indian holding compan licensed to the foreign A foreign AE had incurred
ITA No.672/Chny/
M/s
:: 12 ::

ir own case for AY 2011-12 stand d the gamut of facts in light of that the facts involved in the pre the decision of Hon’ble Delhi High he ratio decidendi emerging from th gned issue at hand. In the decision rt (supra), the Hon’ble Court upheld bsidiary had rightly incurred the AM censed products being marketed in uld not be said to be recouped fro e pretext that since the legal owne such AMP expenses benefitted the its brand value. The Hon’ble High C e Revenue to show existence of som een the parties regarding the AMP e application of bright line test.
nt case before us, it is the assesse ny having ownership of the brand
AE, PT TVS Indonesia. It is not know d any marketing expenses in its ow

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

s rendered per the prevailing esent case are Court (supra), is decision is of ns rendered by d the assessee’s
MP expenses in India and that om the foreign ership of brand foreign holding
Court held that, me arrangement
P spends and it ee which is the d, which it has wn whether the n right. Also, it is not discernible from marketing expenses inc business in Indonesia a the aforesaid details h
Likewise, the TPO has assessee and Indonesia transaction’. Going by (supra), ordinarily the expenses in Indonesia
Indonesia wherein it products. Now whether, not, and whether the AM resulted in any benefit there was any arrangem
4.8
In light of the abo
Hon’ble Delhi High Cou involved in the present viz., the bright line test in the case of Sony E
Court has held in the ca needs to establish th
ITA No.672/Chny/
M/s
:: 13 ::

the material placed on record as curred by the assessee was only to and for enhancement of its brand have been brought on record by also not identified the ‘arrangemen an AE, basis which he is inferring a the ratio laid down by Hon’ble De e foreign AE ought to have incu as it was the economic owner o was licensed to manufacture an , the AMP expenses was incurred b
MP expenses incurred by the assess to the foreign Indonesian subsidia ment between the parties is not know ove therefore, it cannot be said that urt (supra) can be squarely applie t case. However, the benchmarkin adopted by the TPO has been spec
Ericsson (supra). Further, the Hon'
ase of Maruti Suzuki Ltd (supra) th e existence of international tran

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

to whether the owards its own value. None of the assessee.
nt’ between the n ‘international elhi High Court urred the AMP of the brand in nd market the y foreign AE or ee in Indonesia ary, or whether wn.
the decision of ed to the facts g methodology cifically rejected
'ble Delhi High at the Revenue nsaction before undertaking benchmark decidendi laid down in the approach of the TP judgments of Hon’ble D by this Tribunal in asse regard to the change in judgments (supra), the for AY 2011-12 is no lon
4.9
Having held so ab even the assessee ha concerning the Indones and if not, then wheth incurred expenses on i incurred by the assesse sales etc. have also no facts being brought o decide as to whether th all or not. For the afore aside the order passed to the file of AO/TPO fo issue shall keep in mind
ITA No.672/Chny/
M/s
:: 14 ::

king of AMP expenses. Hence, app these judgments,we agree with the PO cannot be upheld. We note tha
Delhi High Court (supra) had not b essee’s own case for AY 2011-12. n legal position on this issue, conse e earlier decision rendered in asses nger valid.
bove, at the cost of repetition, it is s not brought on record all the sian AE, the AMP expenses incurre her can it be said that the assess its behalf etc. Also, the nature of ee, reasons for such excessive AMP ot been explained before the TPO.
n record, one cannot objectively ere exists any arrangement betwee esaid reasons and in fitness of the m by the AO on AMP expenses and re or examining it afresh. The TPO whi d the ratio laid down in the decisions

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

plying this ratio e assessee that t the aforesaid een considered
Hence, having equent to these see’s own case observed that, relevant facts d by the latter see had indeed
AMP expenses costs vis-à-vis
Without these ascertain and n the parties at matters, we set estore the same le deciding this s of the Hon’ble

Delhi High Court (supr issue, and shall pass a opportunity of being hea
4.10 For the reason se allowed for statistical pu
5. Ground Nos.8
adjustment on account
5.1
Brief facts are tha any royalty despite pro
Indonesia. At the same received Rs.69,03,943/- sale. Therefore, the TP pricing adjustment in re factory sale in the rele replied that, since the assessee had decided n not agree to this rationa is not an appropriation
AE incurred losses or n have charged the royalt pricing adjustment tow
ITA No.672/Chny/
M/s
:: 15 ::

ra) and/or any subsequent develop speaking order after allowing asse ard.
et out above therefore, this ground urposes.
& 9 are in relation to the tr of royalty of Rs.2,15,56,000/-.
at, the TPO noted that the assesse oviding use of technical support/bra e time, he observed that, the asse
- as royalty during AY 2010-11 @ 2%
O required the assessee to explain a elation to royalty should not be mad evant AY as well. The assessee is AE was incurring losses at gross p not to charge royalty from it. The TP ale and held that, royalty is a charge of profits and therefore irrespectiv not, on arm’s length basis, the ass ty. The TPO accordingly computed u wards royalty receivable at the rate

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

pments on this essee sufficient d is accordingly ransfer pricing ee did not earn and to its AE in essee company
% of ex-factory as why transfer de @ 2% of ex- noted to have profit level, the PO however did e on profits and ve whether the essee ought to upward transfer e of 2% at ex- factory sale at Rs.2,15, the DRP. Aggrieved by t
5.2
Before us the agreement, as it stood provided that, unless numbers of two wheel according to him, no ad warranted. Per contra, passed by this Tribuna wherein identical adjust
5.3
We have heard bo
It is noted that this is Tribunal in the assessee arguments were raised after considering the sa under:
11. The next ground is w
12. The facts of the iss the assessee was asked the financial year 20
charged on ex-factory licensee PT TVS Indone through an amendment such time the Licensee wheelers (i.e. deferme assessee are not suffic
ITA No.672/Chny/
M/s
:: 16 ::

,56,000/-. This action of the TPO the same, the assessee is in appeal
Ld. AR vehemently argued tha in FY 2009-10, had been amended the licensee achieves monthly sa ers, no royalty would be charged justment in terms of this amended the Ld. CIT, DR relied upon the a al in assessee’s own case for earli tment had been upheld.
oth the parties and perused the mat ssue had come up for considerati e’s own case in the earlier AY 2011
by the assessee then as well, and ame, upheld the action of the TPO with regard to charging of notional royalty to ta sue are that The TPO has given a show cause d to justify the reason for non-receipt of royalt
10-11, whereas during F.Y2009-10,2% roya sale. In response, the assessee submitted esia was continuously incurring losses and the a to the agreement agreed that royalty will be w e achieves a monthly sales of 10,000 number ent). According to DRP, the reasons given cient and nothing new has been submitted be /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

was upheld by before us.
at the royalty later on, which ales of 10,000
and therefore agreement was appellate order er AY 2011-12
terial on record.
ion before this -12 and similar d, the Tribunal,
O by holding as x.
in which ty during alty was that the assessee aived till s of two by the efore the DRP. Hence, the DRP assessee is in appeal be 13. We have heard both case, assessee followin question of deferment o to create the docum appreciated. It is only a Accordingly, we are of t the accrued royalty as i
5.4
Following the abov
6. Ground No.10 is read with Rule 8D.
6.1
Brief facts are tha income of Rs.2,42,00,0
the tune of Rs.930,92,0
u/s.14A r.w.r.8D wa disallowance of Rs.8,28
fact that the assessee the AO made further di
AO was upheld by the D
6.2
Heard both the assessee has own funds
Crs as on 31.03.2012. I that since its own funds it, the question of mak
ITA No.672/Chny/
M/s
:: 17 ::

uphold the decision of the TPO. Against t efore us.
h the parties and perused the material on record ng the mercantile system of accounting, the of receipt of income since the assessee was in a ent as the transaction with AE which can afterthought so as to postpone the liability of t the opinion that lower authorities were justified ncome of assessee. Thus, this ground is rejecte ve decision (supra), this ground is a s against the disallowance of u/s.
at, the AO noted that assessee has e
000/- and held investments as on 00,000/-. Therefore, according to him as required.
The AO accordin
8,74,299/- under Rule 8D. Having had suomoto disallowed sum of R isallowance of Rs.7,84,18,474/-. Th
DRP. Aggrieved, the assessee is befo parties. It was brought to our n s of Rs.1121 Crs. as against investm
In light of the aforesaid fact, the as s were much higher than the invest ing disallowance out of interest pa

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

this, the d. In this re is no position nnot be taxation.
treating d.
also rejected.
14A of the Act earned dividend
31.03.2012 to m, disallowance gly computed regard to the Rs.94,55,825/-, he action of the ore us.
otice that, the ments of Rs.930
ssessee claimed tment made by id on borrowed funds in terms of Rule notice the decision of th
Bank Ltd. v. DCIT (
"where assessee's own more than investment the Assessing Officer section 14A of the Act ( to be set aside". We no CIT v. Reliance Utilit laid the proposition of and interest bearing fu were utilized for intere from the factual matri funds more than Rs 11
the tune of Rs. 930 cr
Reliance Utilities & Pow could not demonstrate therefore, the disallow
8D(2)(ii) of the Rules, w
6.3
Coming to disallo
Special Bench of this Tr
ITA No.672/Chny/
M/s
:: 18 ::

8D(2)(ii) did not arise. The Ld. AR he Hon'ble Bombay High Court in the 2014) 366 ITR 505 wherein it funds and other non-interest bear in tax free securities, impugned or disallowing a part of interest pa
(read with rule 8D(2)(ii) of I.T Rule ote that Hon'ble Bombay High Court ties and Power Ltd. (2009) 313
law that, when there are both inte unds, the presumption is that inte st free investment and advances.
x discussed supra, that assessee
121 crores and the total investmen rores, therefore, the presumption i wer Ltd supra is clearly applicable a e that this presumption is factu wance made under section 14Are was not warranted and is directed to owance under Rule 8D(2)(iii), it is ribunal in the case of ACIT v. Viree

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

brought to our e case of HDFC was held that ring funds were rder passed by ayments under es, 1962) needs t in the case of 3 ITR 340 has erest free funds rest free funds
Thus, we note had total own t made only to in the cases of and the Ld. DR ually incorrect, ead with Rule o be deleted.
noted that the et Investment

(P.) Ltd. reported in [
the dividend yielding in disallowance under this also referred to the rev
8D(2)(iii) with referenc placed at Page 106 of t of Special Bench (supr provided by the assess
14A read with Rule 8D( allowed.
7. Ground No.11
commission paid to non
Rs.26,58,53,696/-.
7.1
The AO noted th resident Indians abroad agency commission. Ac tax at source. When co are payments made to f products of the assesse provided by the agent arise in India and conse
ITA No.672/Chny/
M/s
:: 19 ::

[2017] 82 taxmann.com 415, has vestments are to be considered in s Rule. In this regard, the Ld. AR fo vised computation of disallowance in ce to dividend yielding investmen the Paper Book. Respectfully followi ra), the AO is directed to verify th ee andre-compute the disallowance
(2)(iii) accordingly. This ground is t is against the disallowance of n-residents u/s.40(a)(i) of the Act, hat, the assessee has made paym d to the tune of Rs.26,58,53,696/- ccording to the AO, the assessee ha onfronted, the assessee had submit foreign agents for the purpose of pr ee abroad. Since none of the servi in India, no income shall be deeme equently the assessee was not under /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

s held that only computation of or the assessee n terms of Rule nts, which was ng the decision he computation e under section therefore partly export agency to the tune of ments to non- towards export as not deducted tted that, these omoting sale of ces were being ed to accrue or r any obligation to deduct tax at source
The AO however did no disallowed the payment terms of Section 40(a)
DRP.
7.2
Aggrieved, the ass
7.3
We have heard bo on record. We note th
Tribunal in the assessee wherein, this Tribunal assessee by relying on noted that the Tribun juri ictional High Cour reported in [2014] 3
this Tribunal, as taken n
14. The next issue is d residents u/s.40(a)(i) assessee has incurred commission. The asse payments were made to of the products of the a were rendered by the a applicable. Also these a of the DTAA between In outside India and not fr
AO, the payments were carried on In India. He abroad, is deemed to h that it is the AO and commission payment is or Sec.40(a)(i) of the A ITA No.672/Chny/
M/s
:: 20 ::

e on such payments under Section ot agree with the submission of the t of Rs.26,58,53,696/- for non-dedu
)(i) of the Act, which was also con sessee is before us.
oth the parties and perused the ma hat this issue has already come e’s own case for earlier assessment was pleased to allow the conte the decision of this Tribunal in AY nal has relied on the decision o rt in the case of CIT v. Faizan Sh
67 ITR 155 (Mad HC). The relev note of by us, is as under:- disallowance of export agency commission paid of the Act.14.1 The facts of the case are t a sum of Rs.33,23,82,167/- towards export essee has not deducted tax at source. The o foreign agents for the purpose of promoting t assessee. Hence, the assessee stated that the agents outside India and therefore TDS u/s.19
amounts are not taxable as per Article-7Busines ndia and Singapore as the services were render rom any permanent establishment in India. Acco e made for the assessee’s business purposes, w ence, the payment, though made to Non-resi have arisen in India. AO noted in his assessme not the assessee or the non-resident to wh s made can decide about the applicability of Se
Act. According to AO, either the assessee com

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

195 of the Act.
e assessee and uction of TDS in nfirmed by the aterial available up before this t year 2011-12, entions of the 2008-09. It is of the Hon’ble hoes Pvt. Ltd.
vant findings of to non- that the t agency e above the sales services
95 is not ss profits red from ording to which are dents at ent order hom the c.195(1) mpany or the recipients ought t respectively before the can exempt the case fr the assessee company provisions, the AO has 40(a)(i) of the Act for n the AO made an ad commission.

“27. We have c on record. With deducted or not agents, the isus decision of the Faizan Shoes Pv appeal of the Re

Held, d
9(1)(vii) agents services oversea the non free on was the agents h the orde credit fo an incid was un assesse agent d running commis within t assesse commis

In view of the order o allowed.
7.4
Therefore, respect of the appeal and direct
ITA No.672/Chny/
M/s
:: 21 ::

to have made an application u/s.195(2) or Income tax authority, at International Taxati om liability to TDS u/s.195(1) of the Act. Since nor the recipients of commissions have ava no other option but to invoke provisions of the non compliance to provisions 195(1) of the act dition of Rs.33,23,82,167/- towards export th the parties and perused the material on re consideration before this Tribunal in assesse
& 1782/Mds./2012 for assessment year 2008
6 wherein held as follows:- considered rival submissions and perused the m h regard to the issue as to whether the TDS h t when the commission payment made to the o se is squarely covered in favour of the assesse
Hon’ble juri ictional High Court in the case of vt Ltd. [2014} 367 ITR 155, wherein by dismis evenue, the Hon’ble High Court has held as und ismissing the appeal, that on a reading of ) ,commission paid by the assessee to the non- would not come under the term “fees for t s”. For procuring orders for leather busine s buyers, wholesalers or retailers, as the case n-resident agent was paid 2.5per cent. commi board basis. This was a commissions implicite e nature of technical service that the non had provided abroad to the assessee was not cle er of the Assessing Officer. The opening of le or the purpose of completing the export obliga dent of export and, therefore, the non-residen nder an obligation to render such services e, for which commission was paid. The non- did not provide technical services for the purp of the business of the assessee in India. Theref sion paid to the non resident agents would the definition of “fees for technical services”
e was not liable to deduct tax at source on pay sion.
ly following the above judgement of the gh court cited supar, the ground raised by the f the Tribunal cited supra, this ground of ass tfully following the same, we allow G t deletion of this addition.

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

r 195(3) ion, who e neither ailed the e section t. Hence, agency ecord. A ee's own
-09 vide materials as to be overseas e by the f CIT Vs.
ssing the er:-- f section -resident technical ss from may be, ssion on er. What resident ear from etters of tion was nt agent to the -resident poses of fore, the not fall and the yment of Hon’ble
Revenue sessee is Ground No.11

s against the disallowance of loss ommercial Borrowings (hereinafter as noted are that, the assessee
9,82,305/- in the books of account ture in the computation of total he assessee explained that it had contracts entered into to mitigat ng out of fluctuation in foreign cur s being amortized and claimed as ct. It was explained that, the fo ation to repayment of foreign curre mmercial borrowings to acquire fixe e exchange loss arising upon repa n the hedging cost. The AO howeve ut forth by the assessee and disallo the assessee have been considered and ee itself had stated that it had capitalized the count as the same was incurred in relation to ac ing so, the assessee cannot change their stand expenditure for income tax purposes and say ntal to the business. The treatment of an expend ends upon the period for which the enduring ben e. The assessee itself admitted that the benef ears and had capitalized the same in the books s also, the same has to be treated as capital in /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

s on actual re- in short ‘ECB’) had capitalized ts, but claimed income. Upon d paid upfront te any foreign rrency rate and deduction over rward contract ency loan taken d assets. Apart ayment of ECB er did not agree owed the claim are not hedging cquisition d when it that the diture as nefit was fit would s. Hence, n nature.

In view of the above disallowed and added allowed."
8.2
The above finding the assessee is before u
8.3
Assailing the act assessee submitted tha nature was in accord accordance with the A Chartered Accountants in accordance with the (ICDS) recommended b profession under the In decisions of the Hon'ble that the fluctuation in f currency loans raised t put to use, cannot alter of the Act and that it w the Ld. DR for the Reve and argued that premiu purposes and therefore
ITA No.672/Chny/
M/s
:: 23 ::

e, Rs.4,09,82,305 was treated as capital in back to the total income. However, deprec gs of the AO was upheld by the D us.
tion of the lower authorities, the t the claim of the forward premium ance with prescribed norms, i.e
Accounting Standards issued by th of India (ICAI), (AS-11) in this reg
Income Computation and Disclos by the Act for computing income from come-tax Act. (iii) was in accordan e High Courts and the ITAT. He fur foreign exchange rates while repay to acquire capital assets, which had the actual cost of assets in terms o was allowable as revenue expenditu enue supported the action of the lo um was paid on account of loan ta could not be allowed as revenue ex

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.
ITA No.672/Chny/
M/s
:: 24 ::

oth the parties and perused the ma ent case, the assessee is noted to genous fixed assets. It had according dge the foreign exchange fluctuation this, it had paid an upfront premiu r, the assessee had also incurred fo payment of such ECBs. The assess emium cost over the life of contrac on repayment of foreign currency loa ness profits.
dispute before us relates to amort gn exchange forward contracts ente n exchange forward contracts were t of foreign exchange loan/extern e assessee for acquiring indigenou cal issue had come up for considera this Tribunal in the case of CLP
(145 taxmann.137) wherein it wa ign exchange forward contracts e of repayment of loan was to be /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

aterial available have obtained gly entered into n at the time of um to the seller reign exchange see is noted to ct, which along an was claimed tized portion of red into by the entered for the nal commercial us fixed assets.
ation before the P Wind Farm as held that the entered into by e amortized as revenue expenditure o note of by us is as follow
“9. We have hea relates to premiu into by the assess vis a vis the amo is noted in para forward contracts exchange loan/ex its projects in the Having outlined t the issue.
….
13. A bare perus effects of change transactions unde the effects dealt exchange cover. T is AS-11 which p recommends the to be amortized a term expense h meaning has to b
"income", which therefore that the on forward exch revenue expendit
Accounting Stand premium as ex recommended by very clear that it all expenses and therefore clearly
Having said so, fo to see whether t
Act. In other wo specific treatmen prescribed and in prescribed by the case of Virtual So ITA No.672/Chny/
M/s
:: 25 ::

ver life of contract. The relevant ws:- ard both the parties. The claim in dispu um paid on foreign exchange forward cont see amounting in all to Rs. 38,96,97,000/- rtized portion of the forward cover premium
3.1 of the assessment order. These forei s were entered for the purposes of repayme xternal commercial borrowing taken by the e renewal energy business, which fact is n the facts as above we shall now proceed sal of the above reveals that AS-11 prescr es in foreign exchange rate is to be acco ertaken in foreign currency or in foreign co with the standard relates to premium pa
Thus with respect to the issue before us ,u rescribes the method of accounting for the premium paid on foreign exchange forwa as expense or income over the life of the c as been used in juxtaposition with inc be derived in conjunction and consonance w undoubtedly is revenue receipts. There e recommendation by AS-11 of writing off hange contracts as expense means writi ture in the profit and loss account. The lan dard is very clear when it recommends am xpense or income.
The manner of y the Standard, i.e" expense or income" it is to be written off in the Profit and Loss ac d incomes are recorded. The claim of t is in accordance with AS-11 of the ICAI.
or allowability of the claim as per AS-11, i here is any bar to the applicability of the ords it is to be seen whether the Act pr nt for the said premium which is to be f n the absence of same, the claim is to b e Accounting Standard. The Hon'ble Apex oft Systems Ltd. (supra) has laid down th

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

findings taken ute before us racts entered
.The claim is m, which fact ign exchange ent of foreign e assessee for not disputed .
to adjudicate ribes how the ounted for on untry. One of id on foreign ndoubtedly it e same and it ard contracts ontracts. The ome and its with the term is no doubt the premium ing it off as nguage of the mortizing the writing off tself makes it ccount where the assessee it is pertinent same in the rescribes any followed if so be allowed as Court in the e proposition that where there
Accounting Stand are to be determi
14. The Act, und of foreign exchan purchased outsid exchange. Explan to be computed exchange forward
The said section, case since it is n loan has been tak
No other section forward contract
Therefore as per
Virtual Soft (sup according to whic is to be amortized
The reliance by t
Bench of the ITA the proposition t obligations ,the p capital in nature,
Visakhapatnam B
Co. Ltd. (supra)
Revenue or capit relevant and wha of devaluation. T decision of the Governor India (P
1 and the Hon'ble
Co. (P.) Ltd. [199
15. In view of th the amortization amounting to Rs.

ITA No.672/Chny/
M/s
:: 26 ::

is no express bar in Act regarding the ap dard prescribed by ICAI, deductions/claims ined on the basis of these accounting stand er section 43A, prescribes the adjustment nge fluctuations to be made to the cost of e India which requires payment to be ma nation 3 to the said section requires cost o d with reference to the rate agreed in d contracts if any entered.
, we find is not applicable to the facts of not the case of the Revenue that the forei ken for purchasing any asset outside the co n dealing with the allowability of prem ts has been pointed out by the Ld.DR the decision of the Hon'ble apex court in pra), the accounting prescribed by AS-1
ch the premium/discount on forward exchan d as expense/income.
the Ld.DR/Ld.CIT(A) on the decision of th
AT in the case of Orchid Ply Industries Ltd that the loan having been taken for me premium paid for forward cover also is to b
, we find is of no assistance to the assess
Bench of the ITAT in the case of Maddi L held that for determining whether devalu tal, the object for which the currency is ob at is relevant is the utilization of the amoun
The ITAT while holding so referred to and Hon'ble apex court in the case of CIT v
P.) Ltd. [2009] 179 Taxman 326/312 ITR e Bombay High Court in the case of CIT v. V
94] 72 Taxman 134/206 ITR 291/[1993] 11
e above, we hold that the assessee is ent n of premium paid on foreign exchan
38,96,97,000/-.”

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

pplication of a s of assesses dards….
ts on account f fixed assets ade in foreign of such assets the foreign f the present ign exchange ountry.
ium paid on R before us.
n the case of 1 will apply, nge contracts he Bangalore d. (supra) for eeting capital be treated as see since the Lakshmaiah &
uation loss is btained is not nt at the time relied on the v. Woodword
254/223 CTR
V.S. Dempo&
15 CTR 163. titled to claim ge contracts

ove decision (supra), we direct the A rtized sum of forward premium clai nent of the impugned disallowan t of ECBs which were used for acqui n perusal of the provisions of Sectio term 'actual cost' as the actual co sset by the assessee, reduced by at has been met directly or indirect is Section is noted to have several E sal of the same, it is noted that now y gain or loss on foreign currency genous assets will have to be reduc find the decision of the Hon'ble Su ta Iron & Steel Co. Ltd. (231 IT the present case. In the decided ca t and the cost of raising money for and independent transactions. Once nts subsequent to the acquisition c ore, the fluctuation in foreign excha rrency loans raised to acquire capita

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

AO to allow the med by way of ce is the loss ring indigenous on 43(1) of the ost incurred for that portion of ly by any other
Explanations as where does this loans acquired ced or added to preme Court in TR 285) to be ase, it was held purchase of the e the asset has cannot alter the nge rates while al assets, which had already been put terms of Section 43(1) foreign exchange loss i allowed as deduction by 12 by holding as under:
“19. The next issue exchange difference i assets as “capital” in loss.
20. The facts of th difference in repayme section 43A applied t foreign currency loa related to importer a AO invoked the prov
DRP. Against this ass
21. Before us, ld.A.R of Cooper Corporati foreign fluctuation ex allowable expenditure
22. We have heard record. Admittedly, t
Tribunal, in the case vide order dated 29.0
as follows:-
“10. We have of the authorit involved in the hands of asse foreign curren exchange wou capital nature revenue, the correspond w capital in natu revenue in nat
10.1 On consi were held in I entered into a ITA No.672/Chny/
M/s
:: 28 ::

to use, cannot alter the actual co
) of the Act. It is further observe ncurred on the same foreign curre y this Tribunal in assessee’s own cas
- is that the ACIT/DRP treated the actual n repayment of ECB loan relating to non-im n nature and allowed only depreciation o e issue is related to actual loss on ex ent of ECB loan. Before AO ld.A.R submitt to assets importer from a foreign country an and in the instant case exchange lo ssets has been capitalized by the assesse visions of the section 43A, which was up essee is in appeal before us.
R relied on the order of Pune Tribunal, in t on in ITA No.866/PN/2014. According t xchange fluctuation in revenue’s field. Hen e.
both the parties and perused the mate this issue came up for consideration befor e of Cooper Corporation in ITA No.866/P
04.2016 for assessment year 2008-09where carefully considered the rival submissions ties below and case laws cited. The Centr e present case is whether provisions for los essee on account of restatement of outs ncy loans necessitated by fluctuation in uld be allowable as business loss or a e in the facts narrated above. While as increased liability due to exchange fluc ith carrying costs of the fixed assets an ure, the assessee seeks to submit that the ture.
ideration of facts, it is noticed that certai ndian currency in the earlier years. The A n agreement with the lenders to convert th

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

ost of assets in ed that, similar ncy loans were se for AY 2011- loss on mported on such xchange ted that y out of oss/gain e itself.
held by he case to him, ce, it is erial on re Pune
PN/2014
ein held s. Order al issue ss in the standing foreign loss of per the ctuation nd thus e loss is n loans ssessee he loans in foreign curr rate of intere factually dem currency loans saving of inter on the fact th projects etc. f and the asse consequence, so converted i having been p no adverse fin completeness section 145 of the business with generally notified.
10.2 The ass effects of the incurred owin enjoins repor currency using year. It also r from such con be recognized period. In the 1-03-2015 ref exchange diffe exchange diffe have to be re period in whic
Section 43A o case may be.
10.3 The con contingent and per section 2
being a comp system of acco in terms, man required to be 145 of the In compute busin of accounting
Companies Ac accounts as p recognized on notified accoun liability and no A legal liabil fluctuation and ITA No.672/Chny/
M/s
:: 29 ::

rency equivalents to take advantage of th est rate applicable to later. The assess monstrated that the conversion into s have actually benefited the Assessee in t rest costs. We also notice that there is no at the acquisition of capital assets / expan from the term loans taken are already co ets so acquired have been put to use the loss occasioned from foreign currenc is a post facto event subsequent to capita put to use. We simultaneously notice that nding from the Revenue about the correct of accounts of assessee on the touchs f the Act. In other words, the profits/gain have been admittedly computed in acco y accepted accounting practices and gu essee has inter alia applied AS-Il dealin changes in the exchange rate to record the g to fluctuation in the foreign exchange.
rting of monetary items denominated g the closing rate at the end of the acc requires that any difference, loss or gain, nversion of the liability at the closing rate d in the profit & loss account for the re same vain, CBDT notification S.O. 892(E) ferred to also inter alia deals with recogn erences. The notification also sets out t erences arising on foreign currency trans ecognized as income or business expense ch they arise subject to exception as set r Rule 115 of the Income Tax Rules, 1962
ntention of the revenue that the loss d notional and subsisting has been exami
209 of the Companies Act, 1956, the A any is required to compulsorily follow me ounting. S. 211 of the Companies Act, 195
ndates that accounting standards as appli e followed while drawing statement of aff come Tax Act, 1961 similarly casts obliga ness income either by cash or mercantile
. Thus, in view of the various provisions ct and Income Tax Act, it was mandatory t per AS II. Thus, in our considered view, t n account of foreign exchange fluctuation nting standard AS 11 is an accrued and su ot merely a contingent or a I hypothetical lity also exists against the assessee d loss arising there from. Actual payment

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

e lower see has foreign erms of dispute nsion of omplete e. As a cy loans l assets there is tness or tone of ns from ordance idelines ng with e losses
. AS-11
foreign counting arising e should eporting dated 3
nition of hat the sactions e in the t out in 2 as the is only ned. As ssessee ercantile
56 also, cable is fairs. S.
ation to system s of the to draw the loss as per bsisting liability.
due to t of loss is an irrelevan liability. As a holding the lia
10.4 Copious as well as rev issue on the t the extent rele
“Notwit provisio any as India fo in cons during asset, t the as compar acquisit paymen
(a) tow or (b) tow moneys indirect purpose the am increas which i paymen adopted case m
(i) the section (ii) the referred or (iii) th referred
(iv) th referred or (v) the capital
ITA No.672/Chny/
M/s
:: 30 ::

t consideration to ascertain the point of ac corollary, the revenue has committed e bility as notional or contingent.
reference has been made to S. 43A by A enue. Thus, it would be pertinent to exam touchstone of S. 43A of the Act. Section evant in the context, reads as under:
thstanding anything contained in any on of this Act, where an assessee has a set in any previous year from a country or the purposes of his business or professi sequence of a change in the rate of ex any previous year after the acquisition there is an increase or reduction in the lia ssessee as expressed in Indian curren red to the liability existing at the t tion of the asset) at the time of nt—
wards the whole or a part of the cost of the wards repm’menl of the whole or a part s borrowed by hun from am’ person, dire t/v. in any foreign currency specifically e of acquiring the asset along with interest mount by which the liability as aforesaid sed or reduced during such previous ye is taken into account at the time of mak nt. irrespective of the method of acc d by the assessee, shall be added to, or, ay be, deducted from—- actual cost of the asset as defined in claus
43; or e amount of expenditure of a capital d to in clause (iv) of subsection (I) of sect e amount of expenditure of a capital d to in section 35A; or he amount of expenditure a/a capital d to in clause (ix) of subsection (I) of sect cost of acquisition of a capital asset (not asset referred to in section 50) for the p

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

ccrual of error in ssessee mine the 43A, to y other acquired outside on and, xchange of such bility of ncy (as time of making e asset; t of the ect/v or for the , if any.
d is so ear and king the counting
, as the se (I) of nature tion 35:
nature nature tion 36:
being a urposes of sect addition of the nature the cap
Provide actual c made u its subs an incr amount under t or cost shall be as the expend increas accoun
A bare which o would s are acq apply notable corresp relation making exchan exchan
43A of of S. 4
Therefo accoun light o pronou
10.5 Before W generally acce to examine w loss can be ad assets with re defines the ex means actual that portion o by any other been appende specifies that a for purchase added to the perspective al
ITA No.672/Chny/
M/s
:: 31 ::

tion 48, and the amount arrived at afte n or deduction shall be taken to be the act asset or the amount of expenditure of a of as the case may be, the cost of inquis pital asset as aforesaid:
ed that where an addition to or deduction h cost or expenditure or cost of acquisition ha under this section, as it stood immediately stitution by the Finance Act, 2002, on acc rease or reduction in the liability as aforesa t to be added to or, as the case may he. de this section from, the actual cost or expe of acquisition at the time of making the p e so adjusted that the total amount added case may be, deducted from, the actual diture or cost of acquisition, is equal se or reduction in the aforesaid liability tak t at the time of making payment reading of the aforesaid provision of Sectio opens with a non-obstante and overriding show that it comes into play only when the quired from a country outside India and d to acquisition of indigenous assets. A e feature is that S.43A provides for ponding adjustments to the costs of assets n to exchange gains/ losses arising at the g payment. It therefore deals with ge gain/ loss. The treatment of un ge gain/loss is not covered under the scop the Act. It is thus apparent that special p
43A has no application to the facts of th ore, the issue whether, the loss is on r t or a capital one is required to be tested of generally accepted accounting pri ncements and guidelines etc.
We delineate on the allowability of loss ba epted accountancy principles, it may be pe whether the increased liability due to fluc dded to the carrying costs of corresponding eference to S. 43(1) of the Act. Section xpression ‘actual cost’. As per S. 43(1), act cost of the assets to the assessee, redu f the costs as has been met directly or in person or authority. Several Explanation ed to S. 43(1). However, the section n any gain or loss on foreign currency loan a of indigenous assets will have to be redu e costs of the assets. Thus, viewed fro lso, such increased liability cannot be bra

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

er such ual cost capital sition of hem the as been y before count of aid, the educted enditure payment d to, or, cost or to the ken into on 43A, clause, e assets oes not Another making s only in time of realized realized pe of S.
rovision he case.
revenue d in the nciples, ased on ertinent ctuation g capital n 43(1) ual cost uced by ndirectly ns have nowhere acquired uced or om this acketed with cost of a terms of overr
10.6 We also Supreme Cour
Ltd. (1998) 22
raising money independent acquisition of fluctuations installments o actual cost of hereunder:-
“Comin follow the cos the act assesse been b did not asset. I the loa to be h cost of differen is purc the Gov paid by instant repaym foreign to repa otherw which purchas funds t assesse price c acquisit mode o the cos purpose rightly dismiss
Thus, i no bea distinct with a borrow
ITA No.672/Chny/
M/s
:: 32 ::

acquisition of capital assets save and ex ruthng provisions of S.43A of the Act.
o simultaneously note here that the rt in the & case of CIT vs. Tata Iron and St
2 ITR 285 held that cost of an asset and y for purchase of asset are two differe transactions.
Thus, events subseque assets cannot change price paid for it. The in foreign exchange rate while re f foreign loan raised to acquire asset cann assets. The relevant operative para is repr ng to the question raised, we find it diff how the manner of repayment of loan ca st of the assets acquired by the assessee.
tual cost must depend on the amount paid ee to acquire the asset. The amount ma orrowed by the assessee but even if the a t repay the loan it will not alter the cost
If the borrower defaults in repayment of a n, the cost of the asset will not change. W home in mind is that the cost of an asset a raising money for purchase of the asset nt and independent transactions. Even if a hased with non-repayable subsidy receive vernment. the cost of the asset will be th y the assessee for acquiring the asset.
case, the allegation is that at the t ment of loan, there was a fluctuation in the exchange as a result of which, the assess ay a much lesser amount than he woul ise paid. In our judgment, this is not a can alter the cost incurred by the asses se of the asset. The assessee may have rai to purchase the asset by borrowing but w ee has paid for it, is the price of the asse cannot change by any event subsequent tion of the asset. In our judgment, the ma of repayment of the loan has nothing to st of an asset acquired by the assessee e of his business. We hold that the questio answered by the High Court. The appe sed. There will be no order as to costs.”
t is evident the variation in the loan amo aring on the cost of the asset as the lo t and independent transaction as in com cquisition of assets out of said loan ed. Actual cost of the corresponding fixe

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

xcept in Hon’ble teel Co.
cost of ent and ent to erefore, epaying not alter roduced ficult to n affect
What is d by the ay have ssessee t of the part of What has and the are two an asset ed from he price
In the time of e rate of see had ld have a factor ssee for ised the what the et. That to the anner or do with for the ns were eals are unt has an is a mparison amount d asset acquire underg
10.7 The issu
36(l)(iii) gover stated earlier, to do with all loan repaymen in nature. Sim
Act which als account or re allowablity of inserted there interest expen which capital a use, the intere of capital asse noted, S. 43A in cost of asse fluctuations in for acquisition a deeming pro arising from indigenous a fluctuation los
Besides AS-II, account is als action was ta augment the assessee. The nexus to the s capital asset i implicit as we argument tha mechanism ag commercial ex plea of the as revenue accou
10.8 Section 1
accounting an computed in accounting. S
Government t determination
Companies Ac a true and fai the financial y accounting sta
Loss Account section 145 o leaves no room
ITA No.672/Chny/
M/s
:: 33 ::

ed earlier by utilizing the aforesaid loan o any change owing to such fluctuation.
ue is also tested in the light of provisio rning deduction of interest costs on borrow manner of utilization of loan amount has lowability of any expenditure in connectio nt. Both are independent and distinct trans milar analogy can be drawn from S.36(l)(iii so reinforces that utilization of loan for evenue account purpose has nothing to d corresponding interest expenditure. A eto by Finance Act, 2003, also prohibits c nditure in revenue account only up to the asset is put to use. Once the capital asset i est expenditure on money borrowed for acq et is also treated as revenue expenditure.
specifically and categorically calls for adjus ets for loss or gain arising out of foreign c n respect of funds borrowed in foreign c of foreign assets. However, the same ratio ovision of S. 43A cannot be applied to loss foreign currency loss utilized for purch ssets. Needless to say, impugned c ss has emanated from foreign currency the claim of exchange fluctuation loss as r so founded on the argument that the af ken to save interest costs and conseque profitability or reduce revenue losses impugned fluctuation loss therefore has a saving in interest costs without bringing a nto existence. Thus, the business exigenc ell explicit in the action of the Assesse at the act of conversion has served a h gainst revenue receipts from export also p xpediency. Thus, We are of the opinion t ssessee for claim of expenditure is attribut unt has considerable merits.
145 of the Income Tax Act deals with me d states that business income inter-alia ha accordance with cash or mercantile sys
Sub-section (2) thereof authorizes the to notify accounting standards to be follow of business income.
Section 211
t also similarly casts a duty on a company ir view of the profit and loss of the comp year. It also requires the company to adhe andards for preparation of profit in the P and the Balance Sheet. A conjoint rea f the Act and section 211 of the Compan m for doubt that’ the Assessee is obliged to /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

will not n of S.
wals. As nothing on with sactions
) of the capital do with proviso claim of date on s put to quisition
As also stments currency urrency onale of or gain hase of currency y loans.
revenue foresaid ently to of the a direct any new cies are ee. The hedging portrays that the table to ethod of as to be stem of Central wed for of the to give pany for ere, the Profit &
ding of nies Act o follow the accountin income under the Hon’ble Su
India (P) Ltd.
nature. In th
Governor Indi arising on for accounted for in accordance
10.9 We find t
Ltd.
(supra)
Representative
Supreme Cour any profit or depreciation in another curren loss if the for account as tr embargo in bu a capital ass aforesaid princ of case to det the assessee capital. In the assessee bear assets. The ac objective i.e.
receipts etc. w the loss gene revenue expe the case of T favour of the a CIT(A) on Elec decision conce and thus clear
11. For the af section 43A o absence of an with the issue account by the accounting p notified by t notification ca provision of A brought to ou the conversion loss, were dic interest costs conclusion tha expenditure u
ITA No.672/Chny/
M/s
:: 34 ::

ng standards prescribed to determine b the head “business or profession”. We not upreme Court in the case of Woodward G
(supra) has observed that AS-I I is manda he light of observations made in Wo a (P) Ltd. (supra), we arc of the view th reign exchange fluctuation loss has been as a revenue expense in the Profit & Loss a with accounting fiat of AS-11. that the decision in the case of Sutlej Cott relied upon by the Ld.
Depar e is of no assistance to the Revenue. The rt therein stated the principle of law that r loss arises to an assessee on acco n foreign currency held by him on conversio ncy, such profit and loss would ordinary be reign currency held by the assessee on r rading asset or as a part of circulating usiness. However, if the foreign currency is et, the loss should be capital in natur ciple of law is required to be applied to th termine whether the foreign currency is on revenue account or as a part of circ e present case, fluctuation loss inflicted up rs no nexus or relation to the acquisition ction of the assessee is tied up to its und saving in interest costs, hedging its r which are undoubtedly on revenue account rated in impugned action bears the chara nditure. Similarly, decision of the Apex C
Tata Iron and Steel co. (supra) also we assessee. We also note that reliance placed con Engineering Co. Ltd. (supra) is misplac erns applicability of S. 43A in the facts of th rly distinguishable.
foresaid reasons, in the absence of applica of the Act to the facts of the case and ny other provision of the Income Tax Act e, claim of exchange fluctuation loss in r e Assessee in accordance with generally a ractices and mandatory accounting sta the ICAI and also in conformity with annot be faulted. No inconsistency wi
Act or with any accounting practices ha r notice. Otherwise also, in the light of fa n in foreign currency loans which led to im ctated by revenue considerations towards etc. we have no hesitation in coming at loss being on revenue account is an al nder S. 37(1) of the Act. The order of the /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

business tice that overnor atory in oodward hat loss rightly account on Mills tmental
Hon’ble t where ount of on from trading revenue capital held as re. The he facts held by culating pon the n to the derlying revenue t. Thus, acter of Court in eighs in d by the ced. The hat case bility of in the dealing revenue ccepted andards h CBDT ith any as been act that mpugned saving to the lowable e CIT(A) sustaining the reversed.
In the result, t
In view of the decis ground raised by the 8.8
It is noted that disallowance on the lim of accounts capitalizing that the same was cap that, AS-11 notified by foreign exchange loss respect of fixed assets routed through Profit &
12, the ICAI had modifi of which the company exchange loss to the Pr cost of assets. The asse
Merely because the a determinative of the ch the entries whether the not depends upon the p absence of entries in th matter. This legal princ
ITA No.672/Chny/
M/s
:: 35 ::

e disallowance is not called for and the Ground No.1 is allowed.”
sion of Co-ordinate Bench of Pune Tribun assessee is allowed.”
the lower authorities had made ited point that, the assessee's entri g the hedging cost to the cost of pital in nature. The Ld. AR had poi y ICAI, as amended in 2003, pro arising out of foreign currency acquired out of foreign currency lo
& Loss Account. However, in the rele ed Para 46A of AS-11 in December now had an option to either deb rofit & Loss Account or capitalize th essee, in the present case, chose th assessee chose the latter option haracter of the cost. It is by now tr e assessee is entitled to a particula provision of law relating thereto. Th e books of account be decisive or co ciple has been laid down by the Ho

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

is thus nal, this the impugned es in the books assets denoted inted out to us ovided that the fluctuations in oans was to be evant FY 2011-
2011, in terms bit such foreign he same to the he latter option.
would not be rite in law that, ar deduction or he existence or onclusive in the on'ble Supreme

Court in the case of Ke
ITR 363 wherein the H
"Whether the ass depend on the p which the assess absence of entrie the matter."
8.9
Likewise, it is not while adjudicating the n repairs & maintenance that the entries in the b whether expenditure wa of the provisions of t expenses were allowed capitalized in books of a - Reliance Footprin
553/63 SOT 124
Court in CIT v. Re
2014, dated 5-7-2
- Reliance Fresh Lt
ITR(T) 150 (Mum
Court in ITA No. 9
ITA No.672/Chny/
M/s
:: 36 ::

edarnath Jute Mfg Co. Ltd. v. C on'ble Court has clearly stated as fo sessee is entitled to a particular deductio provision of law relating thereto and not see might taken of its right nor can the es in the books of account be decisive or ted that, the Hon'ble juri ictional H nature and allowability of expenditu which were capitalized to fixed ass books of accounts was not determin as capital or not, but it had to be ex the law. The relevant judgments as revenue deduction, inspite of t accounts taken note of by us are as nt Ltd. v. Asstt. CIT [2014] 41
(Mum.) since upheld by the Hon'ble eliance Supply Chain Solutions Ltd. [
2017]
td. v. Asstt. CIT [2016] 72 taxman mbai) since upheld by the Hon'ble
985 of 2017

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

CIT [1976] 82
ollows:
on or not will on the view existence or conclusive in High Court also ure incurred on sets, have held native to decide xamined in light wherein such the same being follows:
taxmann.com e Bombay High
[ITA No. 948 of nn.com 170/50
e Bombay High

above, the reasoning given by the nce is found to be unjustified.
e, we hold that the impugned d ntenable and is therefore directed s regarding amortization of FCMTR t press this ground, so dismissed.
is against the action of the low balance additional depreciation am ssets which were put to use in the e case are that, the AO noted that th
40/- on account of balance addition which were purchased and put to us
1-12. The AO noted that the issue ce additional depreciation in th e assets which were put to use for ear relating to preceding assessmen t there was no provision in the Act

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

AO for making disallowance of to be deleted.
to the tune of wer authorities mounting to Rs.
earlier FY 2011- e assessee has nal depreciation se on the latter e relates to the he subsequent r less than 180
"2. The undisput was an existing installed new p
Industries Ltd. AY of additional 20%
Section 32(1)(iia
2007-08. This wa was acquired afte that it was put t than 180 days. T under Section 32
Act, for the asse have been, and w of depreciation a Act.
ITA No.672/Chny/
M/s
:: 38 ::

al year the balance 50% of additiona d claimed initial 50% of additional asset as it is used for less than 180
2(1) of the Act. According to him, s he additional depreciation is allowa urchased in the year and put to us allowed the claim of the assessee.
on of the AO. Aggrieved, the assesse both the parties and also peruse ecord. The Ld. AR for the assessee s no longer res integra and the Hon
Rittal (India) Ltd. 388 ITR 423 h on'ble High Court held as under:
ed facts of this case are that the respond industrial undertaking, when it had a plant and machinery in M/s. National
Y- 2013-14 the financial year 2006-07 and % depreciation (i.e. 10% additional deprec a) of the Act in the corresponding asse as so claimed because admittedly the ne er 01.10.2006 and before 31.03.2007, mea to use for the purpose of business for a p
There is also no dispute with regard to 2(1)(iia), read with second proviso to 32
ssment year 2007-08, the respondent- as was granted benefit of 50% of the 20% o llowable under sub-section (ii) of Section /2017 (AY 2012-13) s.TVS Motor Co. Ltd.

al depreciation, depreciation in 0 days in terms such practice is able on plant &
se in the same
On appeal, the ee is before us.
d the relevant brought to our n'ble Karnataka has adjudicated dent-assessee acquired and Engineering claimed 50%
ciation) under essment year ew machinery aning thereby period of less the fact that (1)(ii) of the ssessee could f the amount
32(1) of the 3. The dispute in the balance 10%
that the benefit
32(1)(iia) of the Appellate Commi the Tribunal, vide the assessee. Ch by the Revenue.
…..
7. Clause (iia) o substituted by t
01.04.2006. Prior provided for the b or only where a produce during an 8. The aforesaid plant and machin should be claime clause (iia) with depreciation, und assessee and with setting up a new purchase of new purpose of busine it clear that only and machinery s financial year. Ho not be allowed to year.
9. The language that "a further su or plant shall be "shall" used in th be granted is 20
referred to above machinery is put
This would neces can be availed in purpose of inse provides for 20%
ITA No.672/Chny/
M/s
:: 39 ::

n the present appeal is with regard to the depreciation in the next assessment year of the total 20% allowable depreciation u
Act was given. The Assessing Officer, as ssioner, disallowed the claim of the asses e its order dated 28.01.2014, has allowed hallenging the same, this further appeal h of Section 32(1) of the Act, as it now the Finance Act, 2005, applicable with r to that, a proviso to the said Clause was benefit to be given only to a new industrial new industrial undertaking begins to ma ny year previous to the relevant assessmen d two conditions, i.e., the undertaking a nery should be a new industrial undertakin ed in one year, have been done away by h effect from 01.04.2006. The grant der the aforesaid provision, is for the b h the purpose of encouraging industrializat w industrial unit or by expanding the exi w plant and machinery, and putting it to ess. The proviso to Clause (ii) of the said S
50% of the 20% would be allowable, if t so acquired is put to use for less than 18
owever, it nowhere restricts that the balanc o be claimed by the assessee in the next used in Clause (iia) of the said Section cle um equal to 20% of the actual cost of suc e allowed as deduction under Clause (ii) e said Clause is very significant. The benef
0% additional depreciation. By virtue of e, only 10% can be claimed in one year, to use for less than 180 days in the said f ssarily mean that the balance 10% addition n the subsequent assessment year, otherw rtion of Clause (iia) would be defeated deduction which shall be allowed.

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

allowance of r 2008-09, so under Section s well as the see, whereas the appeal of as been filed stands, was effect from there, which undertaking, anufacture or nt year.
cquiring new ng, or that it y substituting of additional enefit of the ion, by either sting unit by o use for the ection makes he new plant
80 days in a ce 10% would t assessment early provides ch machinery
)". The word fit which is to f the proviso
, if plant and inancial year.
nal deduction wise the very d because it 10. It has been Court, that benef liberal interpreta intention of the le allowed certain a only half of the s condition was no restrain the asse subsequent asses that additional de is a one time be related to it have to make the pro
We are in full agr
11. In view of t called for with th arises in this appe
10.3 It was also brou
Court in assessee’s own dated 14.03.2017has
Court held as under:
“2. The Tribunal, entirety, the orde
'the Commissione
Commissioner ha pursuance of pow on several issue assessee to carry following the rel purchased and pu
3.It is common concerned, it is delivered today i
06.03.2017 pass
Income-Tax, Mad
Multivista Global
No.402 of 2013 ii
ITA No.672/Chny/
M/s
:: 40 ::

consistently held by this Court, as well ficial legislation, as in the present case, sho tion so as to benefit the assessee. In th egislation is absolutely clear, that the asse dditional benefit, which was restricted by t same being granted in one assessment ye t fulfilled. But, that, in our considered vie essee from claiming the balance of the b ssment year. The Tribunal, in our view, has epreciation allowed under Section 32(1)(ii nefit to encourage industrialization, and th e to be construed reasonably, liberally and vision meaningful while granting addition reement with such observations made by th he aforesaid, we do not find that any in he order of the Tribunal, or that any que eal for determination by this Court."
ght to our notice that the Hon’bl n case for AY 2004-05 in T.C.(A) N adjudicated similar issue wherein by virtue of the impugned judgment, has er passed by the Commissioner of Income- er') under Section 263 of the Act. To b ad issued a notice to the appellant /
wers conferred upon him under Section 26
es including the issue pertaining to the y forward the balance additional depreciatio evant previous year, in which the subje ut to use.
ground before us that in so far as t s covered against the Revenue by ou n the following cases, as also by the jud sed in T.C.A.No.157 of 2017, titled Com durai vs. M/s.Shri.T.P.Textiles Private Lim
Ltd. vs. The Asst. Commissioner of Incom i.M/s.Brakes India Ltd. vs. The Deputy Com

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

as the Apex ould be given his case, the essee shall be the proviso to ear, if certain w, would not benefit in the s rightly held, a) of the Act he provisions d purposively, al allowance.
he Tribunal.
nterference is estion of law e Madras High
No.294 of 2016
n Hon'ble High sustained, in -Tax (in short e noted, the assessee in 63 of the Act right of the on in the year ct asset was this issue is r judgments dgment dated mmissioner of mited: i.M/s.
me Tax, TCA.
mmissioner of Income Tax, TCA
The Deputy/Asst.
2013
4.To be noted, at order dated 18.04
framed:
i.Whether the Tri of Income Tax ha
Act ?
ii.Whether the a Officer after elici
Section 263 of th was erroneous an iii.Whether the T not entitled to cla additions made to 2003-04 ?'
5. In view of the counsels for both in favour of the a 10.4 Respectfully follow
Court (supra), we direc allow this ground of app
11. Ground No. 15
income chargeable to actually amounts to R brought to our notice t before the AO. There chargeable income in ac
ITA No.672/Chny/
M/s
:: 41 ::

A. No.551 of 2013 iii.M/s.AbiShowatech (In . Commissioner of Income Tax, TCA. Nos.6
t the point in time when the appeal was ad
4.2016, the following substantial questions bunal was right in law in holding that the C as rightly invoked juri iction under Sectio llowance of additional depreciation by th ting replies from the assessee could be r he Act without establishing that the asses nd prejudicial to the interest of the Revenue ribunal was right in law in holding that th aim additional depreciation during the year o fixed assets in the second half of the asse aforementioned judgments, it is agreed by parties that question no. (iii) will have to ssessee. It is ordered accordingly.”
wing the above binding decisions o t the AO to delete the impugned di peal.
is against the action of the AO c tax at Rs.2,72,09,35,654/-, wher
Rs.2,55,96,39,659/-. At the out hat the assessee has filed rectificat efore, we expect the AO to compu ccordance to law.

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

ndia) Ltd. vs.
699 to 702 of dmitted, vide s of law were Commissioner on 263 of the he Assessing revised under ssment order e ? and e assessee is r in respect of essment year y the learned be answered of Hon’ble High sallowance and computing total reas the same tset the Ld.AR tion application ute the correct

Order pronounced (अिमताभशुा)
(AMITABH SHUK
लेखासदय/ACCOUNTANT
चेई/Chennai,
दनांक/Dated: 24th January,
TLN, Sr.PS
आदेशक ितिलिपअेिषत/Copy

ITA No.672/Chny/
M/s
:: 42 ::

16
is against the AO levying
234B of the Act. The levy of intere by the AO and allowed in accordanc eal filed by the assessee is partly all d on the 24th day of January, 2025, i
KLA)
MEMBER (एबीटी.
(ABY T. VA
याियकसदय/JUDICIA
, 2025. to:
nai / Madurai / Salem / Coimbatore.

/2017 (AY 2012-13) s.TVS Motor Co. Ltd.

g interest of st u/s. 234B of ce to law.
lowed.
in Chennai.
/-
वक
)
ARKEY)
AL MEMBER