Schaeffler India Limited Vs ACIT (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, decided a batch of cross appeals filed by the assessee and the Revenue relating to Assessment Years 2010-11 to 2014-15. The Tribunal first condoned a one-day delay in filing the Department’s appeal after accepting the explanation regarding receipt of the Memorandum of Authorization and the intervening holiday. It proceeded to decide the issues for Assessment Year 2010-11, observing that its findings would apply to the remaining years wherever the facts were identical.
Assessee’s claim for deduction of reimbursement expenses under Section 37
For Assessment Year 2010-11, the assessee challenged the disallowance of Rs.31,63,877 reimbursed to Schaeffler Technology GmbH & Co. KG, Germany towards professional services rendered by Ernst & Young Germany pursuant to an agreement. The assessee contended that copies of the agreement had been furnished before the authorities and argued that the Commissioner (Appeals) upheld the disallowance without granting an adequate opportunity to present its case or produce supporting documents. The assessee further submitted that neither the Assessing Officer, the Transfer Pricing Officer (TPO), nor the Commissioner (Appeals) had recorded any finding that the expenditure was not incurred wholly and exclusively for business purposes. Considering these submissions, the Tribunal restored the issue to the Assessing Officer to enable the assessee to produce relevant documents and evidence supporting its claim under Section 37. Accordingly, these grounds were allowed for statistical purposes.
