30 March 2018 |
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CASE LAWS DCIT Vs AAM SERVICES INDIA PVT LTD: PUNE ITAT (Dated: March 23, 2018) Income tax - Sections 92CA(3), 143(3) & 144C Keywords - ALP - operating cost - prior period expenses - PLI The Assessee is a premier global leader in design, engineering, validation and manufacturing of driveline, metal forming, powertrain, and casting technologies for automotive, commercial and industrial markets. In reference to the international transactions carried out by assessee with its AE, the TPO passed an order u/s 92CA(3) proposing TP adjustment of Rs. 2.69 crores, which was incorporated by AO in his draft assessment order. The TPO while making transfer pricing adjustment in the hands of assessee had worked out the PLI of assessee by including expenses pertaining to earlier years. Subsequently, the DRP issued certain directions u/s 144C, which were not incorporated in the final assessment order passed u/s 143(3) r.w.s. 144C(13). After some time, an order was passed u/s 154, wherein no addition was made in the hands of assessee. On appeal, the ITAT held that, Whether prior period expenses should be considered for determining PLI in an international transaction, when the same was not claimed as deduction - NO: ITAT + the issue which arises in the present appeal is whether prior period expenses were operating cost, and the same had to be included or excluded while computing PLI for the year under consideration. The perusal of details filed by the assessee and computation of income reflects that the assessee had not claimed prior period expenses as expenses for the year under consideration and entire prior period expenses were added while determining the gross total income of the year under consideration. The limited issue is that where the expenditure has not been claimed as deduction, then how the same could be considered while determining PLI for the year under consideration. It is seen that a similar issue arose before the Tribunal in ACIT Vs. Dana India Technical Centre Pvt. Ltd., wherein it was held that while computing PLI for the year under consideration, the loss arising on account of foreign exchange fluctuation to the tune of Rs.35,31,729/- is to be excluded, at the same time, the loss arising on account of export proceeds realized from exports of relevant year are to be considered while computing PLI. Therefore, the AO was directed to re-compute the PLI in the hands of assessee and forex fluctuation losses of the earlier years were directed to be kept out of calculation of PLI. Thus, the ground of appeal raised by the Revenue deserves to be dismissed. Revenue's appeal dismissed DCIT Vs GOOGLE INDIA PVT LTD: BANGALORE ITAT (Dated: March 21, 2018) Income tax - application of limitation period - non resident assessees - rectification of mistake The Revenue Department had preferred present miscellaneous petitions seeking rectification of mistakes that have crept in the order of the Tribunal while passing order in IT(TP)A. 1511 to 1518/Bang/2013, whereby the Tribunal had held that same period of limitation should be applied to resident as well as non-resident in case of Section 201 and that limitation for initiation of proceedings for non-resident payee should be six years instead of no limitation. The mistake that had claimed to have been committed was that though the Tribunal had mentioned that this ground was common for AYs.2007-08 and 2008-09, however had written only one assessment year i.e., 2007-08 in its order. After hearing the parties, the ITAT held that, Whether an apparent mistake crept in an order, merits rectification, if brought in notice of the concerned forum - YES: ITAT + there is an apparent mistake that has crept in the order of this Tribunal inasmuch as only one assessment year 2007-08 has been mentioned, whereas it should be 2007-08 and 2008-09. Accordingly, such paragraph of the order stands modified to the extent of inclusion of assessment year 2008-09 as well. Revenue's miscellaneous petitions allowed |
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