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Income Tax Appellate Tribunal, “K” BENCH, MUMBAI
Before: SHRI RAJENDRA & SHRI C.N. PRASAD,
सुनवाई क" तार"ख / Date of Hearing :18.04.2016 घोषणा क" तार"ख /Date of Pronouncement :22.06.2016 आदेश / O R D E R PER C.N. PRASAD, JM:
This appeal is filed by the assessee against the order of the Ld. CIT(A)-58, Mumbai dated 23.12.2014 pertaining to assessment year 2009-10. 2. The assessee has raised following grounds of appeal:
“1. The learned CIT(A) has erred in law and on facts in confirming the additions made by the Assessing Officer while completing the assessment u/ s. 143(3) r.w.s. 144C of the Act, which is illegal and bad in law.
2 2. The learned CIT(A) has erred in law and on facts in confirming the addition made by the Assessing Officer on account of transfer price adjustment of Rs. 95,83,846/- on account of interest on reimbursement amount due from the associate enterprise of the appellant, namely, M/ s. Trigyn Technologies Inc.
3. The learned CIT(A) has erred in not directing the Assessing Officer to adopt LIBOR rate as against confirming the PLR rate of interest applied by SBI @12.50% with further enhancement of 3% as risk adjustment premium for the purpose of making transfer pricing adjustment of Rs.95,83,846/ - .
4.The learned CIT(A) has erred in law and on facts in confirming the disallowance made by the Assessing Officer u/ s. 37(1) of the Act amounting to Rs. 55,57,000/- representing the expenditure incurred by the appellant under the head 'consultancy charges' and paid to M/ s. Trigyn Technologies Inc - USA IC.
5. The learned CIT(A) has erred in rejecting the contention of the appellant that provisions of section 40(a)(ia) of the Act are not applicable for consultancy charges of Rs.55,57,OOO / - paid to M/ s. Trigyn Technologies Inc - USA IC.
The learned CIT(A) erred in not holding that in view of Article 23 of India-USA DTAA provisions of section 40(a)(ia) of the Act are not applicable for consultancy charges paid to M/ s. Trigyn Technologies Inc - USA IC.
7. The learned CIT(A) has erred in law and on facts in confirming the following disallowances made by the Assessing Officer u/ s. 40(a)(ia) of the Act: a. Rs. 7,75,265/- being the rent paid to SEEPZ; b. Rs. 15,000/- out of the total amount of Rs. 36,000/- paid to Shri Panna Jaydeep Sampat, being legal and professional fee; 3 and c. Rs. 44,759/- paid to e- Vector, being legal expenses.
8. The learned CIT(A) has erred in law and on facts in confirming disallowance of Rs. 1,000/- made by the Assessing Officer, being payment made by the appellant to the Company Law Board u/ s. 37(1) of the Act treating it as expenditure incurred by way of penalty or fine for violation of law for the time being in force.
9. The learned CIT(A) has erred in law and on facts in confirming the disallowance of Rs. 64,1171- made by the Assessing Officer ul s. 14A r.w. Rule 8D of the LT. Rules.
10. The learned CIT(A) has erred in law and on facts in confirming the disallowance of Rs. 37,98,6961- made by the Assessing Officer u/ s. 43 B of the Act.
The learned CIT(A) has erred in not accepting the crucial additional evidences filed before him.
The order passed by the CIT(A) is bad in law and in violation of principles of natural justice”.
At the time of hearing, the Ld. Counsel for the assessee submits that he is not pressing ground No.1, hence ground No. 1 is dismissed as not pressed.
The Ld. Counsel for the assessee submits that Ground No. 2 & 3 relates to Transfer Pricing Adjustment on account of interest on reimbursement amount due from the associate enterprise of the assessee. Ground No.4 to 6 relates to the disallowance of expenditure incurred by the assessee under the head ‘consultancy charges’ paid to M/s. Trigyn Technologies Inc-USA IC. At the outset the Ld. Counsel for the assessee submits that the assessee filed additional evidences in respect of these grounds since these evidences could not be 4 furnished at the time of assessment proceedings. He further submits that since the additional evidences are going to the root of the matter he prays that the matter may be sent back to the file of Assessing Officer for considering the additional evidences furnished. The Ld. Counsel for the assessee invited our attention to page-30 of the Paper book and submits that the Co-ordinate Bench for the Assessment Year 2008-09 in dated 9.4.2014 on identical issues admitted the additional evidences and restored the issues in ground No. 2 to 6 to the Assessing Officer to consider afresh in accordance with law. Therefore he prays that similar directions be issued for this Assessment Year also. The Ld. Counsel for the assessee further submits the reason for not furnishing the evidences before the Assessing Officer was that, the head of Finance Department of the assessee-company tendered his resignation and he was serving his notice period and therefore in the absence of CFO, Income tax matters could not properly be represented and information was not furnished to the Assessing Officer.
On going through the order of the Co-ordinate Bench of the earlier Assessment Year, we find that on identical issues, the Co- ordinate Bench restored the additional evidences to the Assessing Officer for fresh adjudication. Thus, the additional evidences furnished by the assessee for this Assessment Year should go back to the Assessing Officer for fresh consideration and thus we admit the additional evidences and restored the issue to the file of the Assessing Officer who shall decide the issues afresh in accordance with law after providing adequate opportunity of being heard to the assessee.
5 6. In respect of ground No. 10 i.e. confirming disallowance of Rs. 37,98,696/- made by the Assessing Officer u/s. 43B of the Act, the Ld. Counsel for the assessee submits that the assessee claimed an amount of Rs. 37,98,696/- paid during the year u/s. 43B of the Act. However, the Assessing Officer disallowed the same on the ground that no documentary evidences were filed by assessee to support the claim of assessee. Before the Ld. CIT(A), it was submitted that the above amount includes statutory liabilities of earlier years which were paid during the previous year. In order to support the claim of the assessee, a certificate of Chartered Accountant was also filed during the course of appellate proceedings. The CIT(A) held that the certificate of Chartered Accountant was not produced before the A.O. and the same is in the nature of additional evidence before him and it cannot be admitted. The said certificate is placed at page No. 61 of paper book.
Taking the submissions into consideration, we are of the considered view that this issue also should go back to the Assessing Officer for fresh adjudication based on the evidences furnished by the assessee.
In respect of ground Nos. 7 to 9 relating to the disallowance u/s. 40(a)(ia) and 14A, the Ld. Counsel for the assessee submits that these grounds also may be sent back to the Assessing Officer for fresh adjudication.
We find that the grounds raised were against disallowance made u/s. 40(a)(ia) and u/s. 14A r.w. Rule 8D etc. needs to be 6 considered afresh by the Assessing Officer after hearing the assessee. The Ld. Departmental Representative have no serious objection in restoring all the issues to the file of the Assessing Officer for fresh adjudication. Thus, we restore all these issues to the Assessing Officer for fresh adjudication in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 22nd June, 2016. (RAJENDRA) (C.N. PRASAD ) लेखा सद"य / ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER मुंबई Mumbai; "दनांक Dated 22nd June, 2016 व."न.स./ Rj , Sr. PS