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Income Tax Appellate Tribunal, DELHI BENCHES: I-2: NEW DELHI
Before: SHRI R.S. SYAL & SHRI KULDIP SINGH
ORDER PER R.S. SYAL, VP: This appeal by the assessee relates to the assessment year 2006- 07. It is a second round of proceedings inasmuch as the Tribunal, vide its order dated 19.8.2011, restored the matter to the file of the Dispute Resolution Panel (DRP) for a fresh decision.
The assessee has filed a fresh Form No. 36B, being, Form of appeal to the appellate tribunal and name of the assessee has been accordingly modified in this order.
The first issue raised in this appeal is against the addition on account of transfer pricing adjustment amounting to Rs.33,23,41,378.
Succinctly, the factual matrix of this issue is that the assessee reported certain international transactions in Form No. 3CEB. The Assessing Officer made a reference to the Transfer Pricing Officer (TPO) for determining their arm’s length price (ALP). There is no dispute on the international transaction of `Receipt for back office services’ amounting to Rs. 2.28 crore, which has been accepted by the TPO at the ALP.
The international transaction in dispute is “Freight forwarding and logistics”, with transacted value wrongly mentioned at Rs.286,89,84,115/- (which is, in fact, the amount of total revenue, including from non-AEs). The assessee selected the Transactional net margin method (TNMM) as the most appropriate method for demonstrating that the ALP of this transaction was at ALP. The assessee selected 16 companies as comparable with the multiple year data. The TPO considered the data for the current year alone in respect of comparable companies to benchmark the international transaction. Out of 16 companies selected by the assessee, the TPO shortlisted 3 companies as comparables with their Profit Level Indicator (PLI) of Operating Profit/Total Cost (OP/TC) at 19.27 % as under :-
i. Balmer Lawrie & Co. Ltd. 30.74% ii. Gati Ltd. 11.17% iii. Sical Logistics Ltd. 15.90% Arithmetic mean 19.27%
Applying the average OP/TC of the three companies at 19.27% as benchmark to the Total costs incurred by the assessee on freight forwarding services at Rs.268,40,99,517/-, the TPO determined the ALP at Rs.320,13,25,493/-. This resulted in to transfer pricing adjustment amounting to Rs.33,23,41,378/-. The Assessing Officer in his draft order made transfer pricing addition of Rs.33.23 crore. The assessee challenged the draft order before the DRP presenting segmental accounts, which were not before the TPO. The DRP did not interfere with the TPO’s order by noticing, inter alia, that the keys of allocation between the segments were not clear and apportionment of costs of services was not verifiable. When the matter came up before the Tribunal in the first round, it set aside the final assessment order and remitted the matter to the DRP for a fresh decision. This is how, the DRP took up the matter in the current proceedings and again confirmed the transfer pricing addition as made in the first round. The assessee is aggrieved on certain issues of transfer pricing addition including the inclusion of Balmer Lawrie & Co. Ltd. and exclusion of some companies, which we will discuss hereinafter.
It is essential to record at the threshold that the restoration was made by the Tribunal in the first round to the DRP by noticing the last para of the direction of the DRP, which reads : `AR has presented before us a segmental account. These are not before TPO. The keys of allocation also not clear. The apportionment of cost of services is not verifiable. The choice of comparables was not agitated....’. Prima facie, it suggests that the assessee presented segmental accounts 4 before the DRP for the first time in the first round and the DRP did not properly deal with the same, which necessitated the restoration of the matter by the Tribunal to the DRP. However, the ld. AR submitted before us that such segmental accounts were furnished at the instance of the DRP only and not suo motu by the assessee. On a pertinent query, the ld. AR stated that the assessee is not interested in going into any segmental accounts as was recorded by the DRP in the first round and its determination of the ALP should be tested on consolidated freight income, which is also inclusive of Consignment handling charges, Custom clearance revenue and Storage and warehousing services etc. We find that albeit a particular ground has been raised w.r.t. the segmental accounts and some submissions have also been recorded in the assessee’s written submissions on this score, but the same was admitted by the ld. AR to be treated as having become infructuous. Consequently, we are desisting from dealing with the issue of segmental accounts and corresponding ground is dismissed as not pressed.
Before considering the comparability or otherwise of the companies assailed before us, let us first examine the functional 5 profile of the assessee under international transaction in dispute. The assessee is a part of CEVA group, which, during the year under consideration, had its AEs located in over 100 countries with around 400 facilities, agents and distribution centres. The assessee is engaged in rendering freight and forwarding services in domestic and international sectors. It earns its revenue from the customers in India, whose cargos are booked to be delivered by it outside India through its AEs network and it also earns revenue in respect of inbound cargo received from the goods booked by its AEs from outside India, which have to be delivered to the customers in India. The assessee obtained the services of its AEs located in destination countries and shared 50% of the gross profit with its AEs. Similarly, the AEs also shared 50% of the gross profit in respect of the cargos booked by them and delivered in India by the assessee. On a specific query, the ld. AR submitted that no specific agreement was entered into with any of its AEs towards 50% gross profit sharing or for the rendering of any specific services. There is no dispute that apart from the international transactions of receipt and payment of freight charges inclusive of remuneration for the related services, the assessee also entered into transactions with non-related parties. Admittedly, the accounts have been maintained on entity level, without there being any segments, such as, transactions with AEs and non-AEs and inward freight or outward freight or simpliciter freight and costs/revenue from ancillary services etc. As per the assessee’s Transfer pricing study report, a part of which has been reproduced on pages 7 and 8 of the TPO’s order, the assessee and its associated enterprises are in the business of providing services with respect to Air and Ocean Freight forwarding only. To supplement these activities, the assessee provides certain ancillary services like Cargo Handling and Logistic Management etc.
The services are either offered directly to assessee’s customers or as a part of the deliverables sold to the overseas customers by the EGL Group in other parts of the world. Such services include Transportation to the exportation points; Custom clearance and documentation; Cargo Consultation and Shipment of Cargo; Dispatch of documentation; Tracking the shipment and processing the receipt of the same; Arranging transshipment of goods as per the instructions; Preparing necessary shipment release documentation and intimating the consignee; Customs clearance/ transportation; and Inventory management and control. Rendering of such services is also substantiated from the assessee’s Profit & Loss Account, which shows ‘Service income’ at Rs.286.89 crore, whose bifurcation has been given in Schedule ‘J’ with Freight of Rs.235.32 crore; Consignment handling charges of Rs.42.62 crore; Custom clearance service charges of Rs.4.42 crore; Storage and warehousing service charges of Rs.2.79 crore; and Reimbursement of Custom Duty amounting to Rs.1.73 crore. It is, ergo, patent that the assessee not only renders air and ocean carriage services, but also undertakes related services, such as, Custom clearance, documentation, storage and handling of cargo etc., compensation for which is also separately awarded to the assessee, but all such receipts have been considered as a part and parcel of Freight receipts for the purposes of benchmarking on consolidated basis.
With the above background of the functional profile of the assessee company in mind, let us first examine the only company, whose inclusion has been challenged by the assessee before us.
Balmer Lawrie & Co. Ltd.
This company was initially offered by the assessee as comparable in its Transfer pricing study report. However, it was submitted before the TPO that the same was not comparable and, hence, should be excluded. This contention was rejected by the TPO who included the same in the final list of comparables. No relief was allowed by the DRP. That is how, the assessee is before the Tribunal seeking exclusion of this company.
We have heard both the sides and perused the relevant material on record. Page 764 onwards of the paper book is a copy of the Annual report of Balmer Lawrie & Co. Ltd. Page 804 is a copy of its Profit & Loss Account, which shows revenue from sale of Manufactured goods, Trading goods, Turnkey projects and Services.
The Director’s report divulges that this company has several units, such as, Industrial packaging, Grease and lubricants, Logistics services, Project and engineering consultancy, Travel and tours, Container freight station. It is axiomatic that this company, on entity level, cannot be considered as comparable with the assessee company.
The TPO has considered ‘Logistics services’ segment of this company for comparing it with the assessee. In our considered opinion, even the segment of this company cannot be considered as comparable for the reason that apart from separate segment-wise revenues and costs available in the Annual report, there is an item of ‘Unallocable expenditure’ of Rs.35.52 crore, which has been apportioned by the TPO amongst all the segments, including `Logistics services’, on the basis of their revenue. This approach of bifurcation of `Unallocable expenditure’ cannot be countenanced. Unallocated expenses obviously comprise several items of expenses of distinct nature and hence there cannot be a uniform key of apportionment. For example, `Rent’ paid by an assessee cannot be bifurcated on the basis of revenue from different segments, such as, Manufacturing, Trading and services. The extent of area used by each business segment varies as per the nature of transaction, which may have no relation with the gross revenue. For example, a manufacturing unit will need relatively more area than a trading unit. Similarly, a service unit will need still lesser area. In such circumstances, apportioning common Rent expenditure on the basis of gross revenue from such varied divisions, will give skewed results of segment profitability. Similarly, contribution of various segments to other items of expenses varies depending upon the nature of transaction, extent of capital and labour required etc. etc. So all common expenses cannot be apportioned in one stroke in the ratio of gross revenue from different segments, each having its own separate features and characteristics. One can logically make allocation depending upon the nature of expenditure and appropriate allocation key. Since in the case of Balmer Lawrie, neither the nature of common unallocated expenses is known, nor the information concerning the appropriate allocation keys is available, we cannot approve the allocation of common expenses in the ratio of gross revenue from each segment. That being the position, the computation of the profit margin of the relevant segment of Balmer Lawrie & Co. sheds credibility which renders its inclusion invalid.
This company is directed to be excluded.
Apart from challenging the inclusion of Balmer Lawrie & Co.
P. Ltd., the assessee has also challenged the exclusion of some of the companies, which we will deal herewith.
Before taking up such a comparison, it is relevant to deal with the argument of the rule of consistency bolstered by both the sides.
Whereas the case of the assessee is that the TPO wrongly excluded some companies from the assessee’s list of comparables, which were accepted as comparable in the preceding year, the ld. DR has justified the exclusion of some other companies on the ground that such companies were either not treated as comparable by the assessee or argued against their inclusion in subsequent years.
We express our reservations in concurring with this argument advanced by both the sides. A company considered as comparable in a preceding or a succeeding year does not necessarily become comparable for the current year as well and vice versa. Functional profile of such company and that of the assessee has to be viewed independently for each year. Sometimes the nature of activity of the assessee or a comparable company undergoes a change. Such a change mars the otherwise comparability. Many a times, it so happens that a company though functionally similar ceases to be comparable because of failing in certain filters, such as, related party transactions more than specified percentage or certain financial implications 12 arising out of acquisition and mergers. Similarly, there can be several other reasons which lead a company comparable in the preceding year becoming non-comparable in succeeding and vice versa. In our considered opinion, there can be no res judicata in the matter of considering a company as comparable or otherwise. One needs to examine the comparability of each company distinctly in each year.
With these remarks, we now espouse the companies, whose exclusion has been challenged by the assessee in seriatim. i) ABC India Limited
The assessee included this company in its list of comparables which got excluded by the TPO on the ground that it is engaged in Road transport, which is again only a part of its activities. The other portion of the income earned by this company is from Petrol pump division.
The learned AR contended that this company was considered as comparable in the immediately preceding year and hence the TPO was not justified in eliminating it from the lists of comparables for the year in question. Per contra, the learned DR heavily relied on the impugned order to contend that this company was rightly excluded as the assessee is only in the business of Air and Ocean inbound and outbound logistics and hence this company cannot be considered as comparables.
We have considered the rival submissions and perused the relevant material on record. We have dealt with the contention supra that a company cannot be treated as comparable or non-comparable simply on the basis of its inclusion or exclusion in the preceding or succeeding year. We need to examine the facts of each company for the relevant year alone. So to contend that since ABC India Limited was accepted as comparable in the preceding year, the same should ipso facto be considered so in the instant year, cannot be accepted.
This becomes more glaring when the functional profile of this company is considered, which ex facie shows striking dissimilarities rendering it totally non-comparable. This company has two streams of income, namely, Transport division and Petrol pump division.
Obviously Petrol pump division of this company can, by no standard, be considered as a match with the assessee company. Even the Transport division of this company caters only to Road transportation 14 business. As against this, the assessee company is engaged in Air and Ocean freight forwarding and is also earning revenue from certain ancillary service, like, Cargo Handling and Logistics Management etc., revenue from which has been merged with the amount of freight.
This sharp distinction in the nature of work carried out by ABC India Limited even under the Transport division makes it non-comparable.
Further, a look at the Annual report of this company, whose copy is available in the paper book, divulges that apart from net segmental revenue of these two divisions, there are certain common `Unallocated expenses’ to the tune of Rs. 148.31 lac. The assessee computed profit margin of this company on segment level by allocating common unallocated expenses in the ratio of revenue from two divisions. While approving the argument of the ld. AR for excluding Balmer Lawrie & Co., we have held above that allocation of all unallocated expenses cannot be done on the basis of gross revenue of each segment. Similar position prevails here also. We, therefore, uphold the action of the authorities below in excluding this company from the list of comparables.
The TPO excluded this company on the ground that its operations did not cover air and ocean cargo and, as such, the risks related to the assessee’s business were not present there. While discussing seven companies, including this company, in a combined manner in para 3.3(i) on pages 12 and 13 of the TPO’s order, this company was held to be functionally different not only in character but also in quality of execution. The DRP did not approve the assessee’s standpoint of its inclusion.
Having heard both the sides and perused the relevant material on record, we find that the Annual report of this company is available on pages 1144 onwards of the paper book. It can be seen that this company is engaged only in Road transport business and has freight income from its own trucks and container’s trucks. This company is not engaged in air and ocean transportation as is the assessee’s business. In the same manner, unlike the assessee, this company is not providing any ancillary services, such as, storage and warehousing and custom clearance & documentation etc. The assessee’s revenue from the international transactions also include remuneration for such incidental services of storage and warehousing and custom clearance etc. In the absence of similar revenue earned by S.E.R. Industries Ltd. and because of it being engaged only in road transport business, we hold that the authorities below were justified in excluding it on the basis of different functional profile. We, therefore, uphold the exclusion of this company from the list of comparables.
The TPO excluded this company on the ground that besides Transportation and XPS cargo segments, this company made large- scale investments in real estate for expanding its warehousing capacities and it also diversified into windmill power. That is how, the functional profile of this company was held to be different while discussing seven companies in a consolidated manner on pages 12 and 13 of his order. The assessee is aggrieved against the exclusion of this company from the list of comparables.
Having heard both the sides and perused the relevant material on record, we find from the Annual report of this company, a copy of which is placed from page 721 onwards of the paper book, that apart from Trading income, this company has also earned income from Sales, Bus operations, Commission and other services. The ld. DR invited our attention towards the Transfer pricing study reports of the assessee for succeeding years in which the assessee itself excluded this company from the list of comparables. The assessee is urging for the inclusion of this company on the strength of segmental results given on page 34 of the Annual report.
It is discernible that though there are separate figures of revenue and costs from Transport division in addition to XPS division, Trading, division, Power division and TCI sea ways division, but we find that there are common `Unallocated corporate expenses’ amounting to Rs.482.17 million. The assessee has computed the profit margin of the Transportation Division of this company by allocating common unallocated expenses in the proportion of revenue from all the divisions. While dealing with Balmer Lawrie & Co. Ltd. etc. above, we have held that allocation of common expenses on the basis of the revenue earned from different segments, cannot be upheld. Following the view taken hereinabove, we hold that TCI Ltd. was rightly excluded by the TPO. iv) Delhi-Assam Roadways Corporation Ltd.
The TPO excluded this company by observing that ‘it was engaged in providing road transport services only and its FAR is nowhere comparable with the assessee company’. The assessee seeks its inclusion. The ld. DR pointed out that the assessee excluded this company from the list of comparables in the immediately succeeding year on the ground that it was simply a ‘Transport agency.’
After considering the rival submissions and perusing the Annual report of this company, a copy of which is available in the paper book, it is palpable that it has operational income only from freight. This company is engaged in road transport business, unlike the assessee, which is providing air and ocean freight services apart from incidental services, such as, warehousing and customs clearing etc. in a composite international transaction. While dealing with S.E.R. India Ltd. above, we have held that a company simply engaged in road transport business cannot be treated as comparable with the assessee company. Following the same, we uphold the exclusion of this company from the list of comparables.
The TPO excluded this company on the ground that out of its total income of Rs.43.11 crore, the major expenditure was lease rent amounting to Rs.39.38 crore. Another reason advanced by the TPO for its exclusion was that it lacked ownership of assets since the claim of depreciation was only to the tune of Rs.0.26 crore. The TPO did not club this company with the seven companies on pages 12 and 13 of his order while holding them functionally different. The assessee wants its inclusion.
Having heard both the sides and gone through the relevant material on record, we find that the TPO has given only two reasons for the exclusion of this company. It can be seen from the Annual report of this company that its ratio of lease rent to sales is 79.01% as against the assessee’s similar ratio of 66.56%. Similarly, as regards lower fixed assets, we find that the ratio of this company of net fixed assets to sales is 3.27% as against the assessee having 0.67%. There is not much difference in these two factors. Since the TPO has not treated this company as functionally dissimilar, we hold that the same should not be excluded for minor variations in the ratio of lease rent to sales and net fixed assets to sales. We, therefore, direct the inclusion of this company in the list of comparables.
This company was excluded by the TPO on the ground of declining profits. He recorded that for the Financial year 2003-04, this company had a margin of 1.79% and for the Financial years 2004-05 and 2005-06, 1.17% and 0.96% respectively. This company was not held to be functionally different. The ld. DR brought to our notice that the assessee itself did not include this company in the list of comparables for the assessment year 2008-09 and rejected this company because of different functional profile in its TP study documentation for the assessment year 2009-10.
Having heard both the sides and gone through the relevant material on record, it is manifest that no company can be excluded simply on the basis of a higher or lower profit margin registered in the year relevant to the assessee company. When average of the profit margins of the otherwise functionally comparable companies is taken, the differences due to particular higher or lower profit margins are ironed out. This proposition is borne out from the judgment of the Hon’ble High Court in ChrysCapital Investment Advisors (India) P.
Ltd. VS. DCIT (2015) 376 ITR 183 (Del). A company may call for exclusion if it is consistently posting losses due to exceptional reasons. Since this company has simply shown lower rate of profit in three years, it cannot call for elimination. It is pertinent to mention that the TPO has nowhere treated this company as functionally dissimilar. In the same way, the contention of the ld. DR that the assessee did not consider it as comparable in succeeding years, cannot justify exclusion in the instant year as well for the detailed discussion made above. We, therefore, direct to include it in the list of comparables.
The TPO excluded this company on the ground of persistent losses/diminishing revenue by noticing that as against the profit ratio of 2.89% for the Financial year 2003-04, this company showed loss at (-) 7.03% for the Financial year 2004-05 and loss of 21.15% for the Financial year 2005-06 relevant to the assessment year under consideration. This company was not held by the TPO to be functionally different. The assessee wants inclusion of this company in the list of comparables. The ld. DR countered the argument by stating that the assessee itself did not include it in the list of comparables for the assessment year 2008-09 and rejected it because of different functional profile in its TP study documentation for the assessment year 2009-10.
While dealing with Roadways India Ltd. above, we have held that earning of low profit in a year cannot be a reason to exclude a company. However, its exclusion can be justified, if it is in persistent losses over the years and that too for exceptional reasons. When we advert to the financials of this company, it emerges that it has profit for the F.Y. 2003-04 and losses have arisen only for the F.Ys. 2004- 05 and 2005-06. Incurring losses in two years cannot be termed as persistent losses so as to qualify exclusion without there being any reference to exceptional reasons for such losses. Following the view 23 taken hereinabove for Roadways India Ltd., we direct to include this company in the final tally of comparables.
After arguing the inclusion/exclusion of companies in the list of comparables, the ld. AR submitted that the TPO went wrong in determining the amount of transfer pricing adjustment by considering the entity level gross revenue shown by the assessee at Rs.286.89 crore. It was submitted that the transfer pricing adjustment, if any, could have been restricted to the amount of international transactions and not the transactions with unrelated parties.
Section 92 is a substantive provision in this regard. Sub-section (1) of sec. 92 provides that ; `Any income arising from an international transaction shall be computed having regard to the arm’s length price.’ The term “international transaction” has been defined u/s 92B to mean: “a transaction between two or more associated enterprises,…….”. A conjoint reading of section 92 with section 92B clearly brings out that computation of income at ALP is permissible only in respect of international transaction, which, in turn, means a transaction between two or more associated enterprises. Similar position has been reiterated in the machinery provision contained in section 92C dealing with the manner of computation of ALP. Sub- section (1) of section 92C stipulates that :`The arm’s length price in relation to an international transaction shall be determined by any of the following methods…..’. The nitty-gritty of the above discussion is that addition by way of transfer pricing adjustment is mandated only in respect of transaction between two AEs. The natural corollary which, therefore, follows is that no income arising from non-AE transaction can be computed having regard to its ALP. In fact, price/profit from comparable transactions of the assessee with non- AEs, is one of the subtle and most reliable modes for determining ALP in respect of international transactions. Thus, it boils down that the Act does not contemplate an addition by way of transfer pricing adjustment in respect of transactions with non-AEs. As the authorities below have ventured to make a composite addition, so, that part of the addition which relates to the transactions with non-AEs is untenable and hence cannot be sustained. We, therefore, vacate the impugned orders pro tanto.
To sum up, we set aside the impugned order on the issue of addition towards transfer pricing adjustment in the international transaction under dispute and remit the matter to the file of AO/TPO for fresh determination of its ALP in consonance with our above observations and directions. Needless to say, the assessee will be allowed a reasonable opportunity of being heard in such fresh proceedings
A corporate ground raised in the appeal is against the disallowance of Rs.2,91,95,2107/- u/s 40 (a)(i) of the Income Tax Act, 1961 (hereinafter also called the Act).
Briefly stated the facts apropos this ground are that the assessee paid administrative fee of Rs. 2,91,95,207/- to EGL, US and EGL Singapore for providing non-technical day-to-day administrative supports functions. Such payment was made without any deduction of tax at source. On being called upon to explain as to why disallowance be not made u/s 40(a)(i) of the Act for non withholding of tax, the assessee submitted that section 195 of the Act was not attracted inasmuch as amount paid to non-resident group entities was not chargeable to tax in India in their hands. Not convinced, the Assessing Officer treated the amount as payment of `Royalty’ falling within the definition both under the Act as well as the respective Double Taxation of Avoidance Agreements (DTAA) and accordingly made disallowance for non-deduction of tax at source. The disallowance so made was sustained by the DRP as well. This is how, the Assessing Officer in the final assessment order dated 10.4.2013 passed under section 143(3) read with section 144C(5) of the Act, impugned in the extant appeal, made the addition.
We have heard both the sides and perused the relevant material on record. It is noticed that while making the disallowance, the authorities below have taken assistance from the similar view of making disallowance in the immediately preceding year. The Tribunal, while dealing with the similar disallowance for the preceding year, in its order dated 19.1.2017 in has held that such an amount paid by the assessee is not chargeable under Article 12 of the DTAA because no services were `made available’ to the assessee by the service providers. A copy of such order has been placed on record. On a pertinent query, 27 the learned DR fairly admitted that the facts and circumstances of the ground for the instant year are mutatis mutandis similar to those of the preceding year. Respectfully following the precedent, we order for the deletion of the disallowance.
The next corporate ground taken by the assessee is against the allowing depreciation on computer peripherals at the reduced rate.
The assessee claimed depreciation @ 60% on computers and printers etc. The AO rejected the assessee’s claim for higher depreciation on Printers. The excess depreciation amounting to Rs.35,279/- was disallowed. The assessee approached the Dispute Resolution Panel (DRP), which affirmed the draft assessment order. In the second round of proceedings pursuant to the Tribunal’s order, the DRP approved the AO’s point of view. However, it was prayed by the assessee that the disallowance of excess depreciation in the preceding year should be given effect to by the AO by correspondingly increasing the written down value for the purpose of grant of depreciation in this year. The DRP directed the AO to take correct written down value as similar disallowance was made by him in the earlier years. The assessee is aggrieved against allowing depreciation 28 on computer printers at the lower rate and also not enhancing the opening written down value with the excess amount of depreciation disallowed in the preceding year.
In our considered view, the issue of allowing depreciation at higher rate on computer peripherals is no more res integra in view of the judgment of the Hon'ble Delhi High Court in CIT vs. BSES Yamuna Powers Ltd. 2010 –TIOL-636-HC-DEL-IT and the Special Bench order of the ITAT in DCIT vs. Data Craft India Ltd. (2010)
133 TTJ (Mum) (SB) 37. We, therefore, direct to allow depreciation on the computer printers at the higher rate as claimed by the assessee.
As regards the direction of the DRP for suitably adjusting the opening written down value of computer peripherals, we direct the AO to enhance the written down value with the excess amount of depreciation disallowed in the preceding years provided such decision of the AO was accepted by the assessee.
The last ground of the assessee’s appeal is against the levy of interest u/s 234A of the Act. The ld. AR contended that the return was filed within the extended time allowed by the CBDT vide order u/s 119 of the Act (F.No.133/38/2006-TPL (Pt.). We direct the AO to verify the assessee’s contention and suitably amend the charging of interest u/s 234A, if warranted.
In the result, the appeal is partly allowed for statistical purposes.
The order pronounced in the open court on 18.01.2018.