DCIT Vs GMR Airports Limited (ITAT Bangalore)
ITAT Bangalore held that claiming of amortised upfront fees i.e. 1/5th of the upfront fees paid is not allowable since the entire amount is already claimed as deduction. Accordingly, ground raised by revenue/department is allowed.
Facts- The assessee is a company and is engaged in the business of promoting infrastructure development through investments in share and securities of accompanies engaged in such activities. The case was selected for scrutiny and the statutory notices were duly served on the assessee. AO made a reference to the Transfer Pricing Officer (TPO) to determine the Arm’s Length Price (ALP) of the international transactions the assessee is having with its Associated Enterprise (AE). The TP made an adjustment of Rs. 41,28,60,585 towards commission on Corporate Guarantee and Rs.15,45,49,138 towards commission on Stand by letter of credit (SBLC). The AO passed the draft order incorporating the TP adjustments and the AO further allowed 1/5th of the loan processing charges as allowed in the earlier years. The AO also made a disallowance u/s.14A to the tune of Rs. 1,50,69,25,725. On further appeal CIT(A) deleted the additions / disallowances by placing reliance on the decision of the coordinate bench in assessee’s own case for AY 2010-11 to 2013-14 vide order dated 25.05.2022. The revenue is in appeal against the order of CIT(A) and the assessee has filed the CO in support of the CIT(A) order.
