M/S MICRO FOCUS SOFTWARE INDIA PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-4(1)(2), BANGALORE

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ITA 3129/BANG/2018Status: DisposedITAT Bangalore10 August 2021AY 2014-153 pages
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What did the Tribunal hold?

The Tribunal admitted the additional grounds raised by the assessee. The orders of the lower authorities on the issue of repairs and maintenance expenditure were set aside and remitted to the Assessing Officer for fresh consideration.

What were the facts?

The assessee's appeal pertains to the assessment year 2014-15. Grounds related to Transfer Pricing adjustments were settled under an Advanced Pricing Agreement and were not pressed. The assessee raised additional grounds concerning the disallowance of expenditure on repairs and maintenance.

What were the issues?

Whether expenditure on repairs and maintenance is eligible for deduction and whether additional grounds raised by the assessee should be admitted.

Which sections of the Income-tax Act were involved?

Section 92CC,Section 143(3),Section 144C

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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI CHANDRA POOJARI

For Appellant: Shri T. Suryanarayana, Advocate
For Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Hearing: 10.08.2021Pronounced: 10.08.2021

Per Chandra Poojari, Accountant Member

1.

This appeal by the assessee is directed against the order of the Assessing Officer dated 24.09.2018 passed u/s. 143(3) r.w.s. 144C of the Income-tax Act, 1961 [the Act] for the assessment year 2014-15.

2.

At the time of hearing, the ld. counsel for the assessee submitted that ground Nos.2 to 10 relating to Transfer Pricing adjustment have been settled under the Advanced Pricing Agreement u/s. 92CC of the Act dated

IT(TP)A No.3129/Bang/2018 Page 2 of 3 20.08.2020 and in view of the same these grounds are not pressed. Accordingly, the same are dismissed as not pressed.

3.

The assessee has raised the following additional grounds:- “14A. That the AO/DRP grossly erred in upholding the disallowance made by the Assessing Officer of a sum of Rs.9,16,902 being expenditure incurred on repairs and maintenance, without appreciating that the same was incurred by the Appellant and was therefore eligible to be allowed as a deduction. 14B. That the DRP erred in not considering the evidence produced by the Appellant before it.”

4.

The ld. counsel for the assessee submitted that the additional grounds go to the root of the issue and the same may be admitted in view of the judgment of Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT, 229 ITR 283 (SC). Relying on this judgment of the Hon’ble Supreme the additional grounds raised are admitted.

5.

The additional ground filed by the assessee requires examination by the AO. Hence the orders of lower authorities on the issue of expenditure on repairs and maintenance is set aside and is remitted to the file of Assessing Officer for fresh consideration and decision in accordance with law, after affording opportunity of being heard to the assessee.

6.

In the result, the appeal of the assessee is partly allowed.

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