Xchanging Technology Services India (P) Ltd. v. ACIT

Case Laws Analysis
REFERRED CIT v. MGF India Ltd. 2018 TaxPub(DT) 1465 (Del-HC)
REFERRED Stryker Global Technology Center (P.) Ltd. v. Asstt. CIT 2017 TaxPub(DT) 1008 (Del-Trib)
REFERRED CIT v. ICICI Venture Funds Management Co. Ltd. 2015 TaxPub(DT) 5194 (Karn-HC)
REFERRED Goetze (India) Ltd. v. CIT 2006 TaxPub(DT) 1528 (SC)

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The Tax Publishers2024 TaxPub(DT) 1039 (Del-Trib) ITAT DELHI BENCH N.K.BILLAIYA, A.M. & YOGESH KUMAR U.S., J.M. Xchanging Technology Services India (P) Ltd. v. ACIT ITA No. 3923/Del/2019 23 February, 2024 Appellant by: Satyen Sethi, Adv. & A T Panda, Adv. Respondent by: V K Dubey, SR DR ORDER *Yogesh Kumar U.S., J.M.* This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax(Appeals)-44, New Delhi (Ld. CIT, for short), dated 27/02/2019 for the assessment year 2014-15. 2. Grounds of the assessee are as under :- 1. That on the facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals)-44, New Delhi ('the Commissioner (Appeals)) has erred in upholding disallowance of Rs. 51,48,128 under section 14A of Income tax Act, 1961 (the Act'). 1.1 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) did not appreciate that in the absence of exempt income, no disallowance under section 14A was called for and that suo-moto disallowance made by the Appellant in the return was no impediment because there is no estoppel against law. 1.2 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) in exercise of appellate powers ought to have allowed the relief of Rs. 51,48,128, for the legal position is settled that Goetze (India) Ltd. v. CIT (2006) 284 ITR 323 (SC) : 2006 TaxPub(DT) 1528 (SC) did not impinge upon the powers of the appellate authorities. 2. That on the facts and circumstances of the case and in law, the Commissioner (Appeals) has erred in upholding adjustment of rent/lease equalization reserve of Rs. 36,06,899 under section 115JB of the Act. 2.1 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) did not appreciate that rent/lease equalization reserve was neither a reserve covered by Explanation 1(b) to section 115JB nor was it a provision for unascertained liability within the meaning of Explanation 1(c) to section 115JB of the Act. 2.2 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) did not appreciate that Stryker Global Technology Center (P) Ltd. v. ACIT (2017) 163 ITD 200 (Del-Trib): 2017 TaxPub(DT) 1008 (Del-Trib) was not applicable to the present case. That the appellant craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal. 3. Brief facts of the case as mentioned in the order of the Commissioner (Appeals) are that, the return of income was filed declaring the total income of Rs. 44,45,01,460 under normal provisions of the Income Tax Act, 1961 ('the Act') and book profits of Rs. 75,97,27,783 under section 115JB of the Act (provisions for Minimum Alternate Tax ('MAT')). The tax liability was determined at Rs. 15,92,42,742 under section 115JB of the Act along with interest liability of Rs. 1,04,748 under section 234C of the Act. The same was duly discharged by way of advance tax and tax deducted at source and a refund of Rs. 99,51,200 was claimed. The aforesaid Return Of Income was selected for scrutiny proceedings pursuant to which, the matter relating to the international transactions entered into by the Assessee with its Associated Enterprises was referred to the Transfer Pricing Officer ('TPO for short). The learned TPO vide its order dated 6-10-2017, determined transfer pricing adjustment of Rs. 33,29,387. Subsequent to receipt of order from the TPO, the assessing officer ('assessing officer') passed the draft assessment order dated 22-12-2017 and thereafter, final Assessment Order dated 15-2-2018 came to be passed, wherein the assessing officer made the following adjustment to the returned income under the normal provisions of the Act. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1039 (Del-Trib)

ITAT DELHI BENCH

N.K.BILLAIYA, A.M. & YOGESH KUMAR U.S., J.M.

Xchanging Technology Services India (P) Ltd. v. ACIT

ITA No. 3923/Del/2019

23 February, 2024

Appellant by: Satyen Sethi, Adv. & A T Panda, Adv.

Respondent by: V K Dubey, SR DR

ORDER

Yogesh Kumar U.S., J.M.

This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax(Appeals)-44, New Delhi (Ld. CIT, for short), dated 27/02/2019 for the assessment year 2014-15.

2. Grounds of the assessee are as under :-

1. That on the facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals)-44, New Delhi ('the Commissioner (Appeals)) has erred in upholding disallowance of Rs. 51,48,128 under section 14A of Income tax Act, 1961 (the Act').

1.1 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) did not appreciate that in the absence of exempt income, no disallowance under section 14A was called for and that suo-moto disallowance made by the Appellant in the return was no impediment because there is no estoppel against law.

1.2 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) in exercise of appellate powers ought to have allowed the relief of Rs. 51,48,128, for the legal position is settled that Goetze (India) Ltd. v. CIT (2006) 284 ITR 323 (SC) : 2006 TaxPub(DT) 1528 (SC) did not impinge upon the powers of the appellate authorities.

2. That on the facts and circumstances of the case and in law, the Commissioner (Appeals) has erred in upholding adjustment of rent/lease equalization reserve of Rs. 36,06,899 under section 115JB of the Act.

2.1 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) did not appreciate that rent/lease equalization reserve was neither a reserve covered by Explanation 1(b) to section 115JB nor was it a provision for unascertained liability within the meaning of Explanation 1(c) to section 115JB of the Act.

2.2 That on the facts and circumstances of the case and in law, the Commissioner (Appeals) did not appreciate that Stryker Global Technology Center (P) Ltd. v. ACIT (2017) 163 ITD 200 (Del-Trib): 2017 TaxPub(DT) 1008 (Del-Trib) was not applicable to the present case.

That the appellant craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal.

3. Brief facts of the case as mentioned in the order of the Commissioner (Appeals) are that, the return of income was filed declaring the total income of Rs. 44,45,01,460 under normal provisions of the Income Tax Act, 1961 ('the Act') and book profits of Rs. 75,97,27,783 under section 115JB of the Act (provisions for Minimum Alternate Tax ('MAT')). The tax liability was determined at Rs. 15,92,42,742 under section 115JB of the Act along with interest liability of Rs. 1,04,748 under section 234C of the Act. The same was duly discharged by way of advance tax and tax deducted at source and a refund of Rs. 99,51,200 was claimed. The aforesaid Return Of Income was selected for scrutiny proceedings pursuant to which, the matter relating to the international transactions entered into by the Assessee with its Associated Enterprises was referred to the Transfer Pricing Officer ('TPO for short). The learned TPO vide its order dated 6-10-2017, determined transfer pricing adjustment of Rs. 33,29,387. Subsequent to receipt of order from the TPO, the assessing officer ('assessing officer') passed the draft assessment order dated 22-12-2017 and thereafter, final Assessment Order dated 15-2-2018 came to be passed, wherein the assessing officer made the following adjustment to the returned income under the normal provisions of the Act.