GE India Industrial Private Limited Vs ACIT (OSD) (ITAT Delhi)
The ITAT Delhi disposed of the assessee’s appeals for AYs 2017-18 and 2018-19 arising from orders of the CIT(A)/NFAC dated 04.11.2022 and 28.10.2022. Since the issues were common, both appeals were heard together. Grounds Nos. 1 and 2 were not pressed and were dismissed.
For AY 2017-18, the assessee challenged a Rs.11,32,606 disallowance under Section 36(1)(va) relating to delayed deposit of employees’ PF and ESI contributions. The assessee submitted that the contributions, though deposited after the due dates under the respective rules, were paid before the due date for filing the return. Relying on the coordinate Bench decision in R.K. & Company Manpower (P.) Ltd. vs. DCIT, the Tribunal held that the issue was covered in favour of the assessee and deleted the addition.
The assessee also challenged an additional Rs.5,40,04,793 disallowance under Section 40(a)(i) relating to payments to non-residents. The assessee had restricted its disallowance to 30% for payments to US and Chinese entities, relying on the non-discrimination provisions in Article 26(3) of the India-USA DTAA and Article 24(5) of the India-China DTAA read with Section 90. The Tribunal followed LinkedIn Technology Information vs. PCIT, which relied upon the Delhi High Court’s decision in Herbalife India P Ltd, and held that the issue was covered. The additional disallowance was accordingly deleted.
