DCIT Vs Eureka Forbes Ltd. (ITAT Kolkata)
ITAT Kolkata held that professional fees for works related to acquisition of new unit or expansion of existing undertaking is governed by provisions of section 35D of the Income Tax Act. Thus, since there is a specific provision u/s. 35D for amortization of certain preliminary expenses, the recourse could not have been had to the residuary provision of section 37(1) of the Act.
Facts- The assessee is a company engaged in the business of trading and servicing of vacuum cleaners, water filters cum purifiers, water & waste water treatment plant, electronic air cleaning systems, small household appliances and digital security system, etc.
The return of the assessee was selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were issued to the assessee. In respect of the international transactions entered during the assessment year, a reference was made to TPO u/s 92CA(1) of the Act. TPO computed the Arm’s Length Price and passed an Order u/s 92CA(3) of the Act on January 25, 2016. On receipt of the Ld. TPO’s order, the Draft Assessment Order was passed on 10.03.2016 and was sent to the assessee. Vide letter dated 22nd March, 2016 the assessee stated that they were not filing any application with the Dispute Resolution Panel against the Draft Assessment Order and would prefer an appeal with the Ld. CIT(A). Thereafter, a Final Assessment Order u/s 143(3) r.w.s. 144C of the Act was passed assessing the total income of the assessee at ₹52,72,64,911/-.
