As per DRP Rules Rule, objections, if any may be filed in person or through his agent within the specified period in Form 35A. There is no prescription that the objection should be filed by assessee in person. An agent is permitted to file the objection, but in the case of company whether the agent should be a Managing Director/ Director, Chartered Accountant or any other person has not been prescribed under the Rules.
In the instant case, the business should be construed set up as the assessee obtained necessary approvals, recruited requisite personal, procured requisite machinery etc. In fact, the assessee has successfully identified certain mineral rich blocks too. As analyzed by the jurisdictional High Court in the case of Western India Vegetable Products Ltd. (supra), the expression ‘setting up’ means ‘to place on foot’ or to establish or ‘to ready to commence’. Therefore, we find no difficulty in coming to the conclusion that the assessee’s business is set up in this year and in fact commenced too. Thus the expenditure incurred after the set up constitutes allowable expenditure.
The other objection taken by the TPO for rejecting CUP method was that there was difference in the dates of comparable transactions. The ld. DR brought to our notice the transactions entered into by the assessee with its AE on 27.11.2004 which was compared by the assessee with transactions entered with Non-AEs on 10.5.2004 & 12.3.2005. It can be observed that the comparison is made by the assessee with the transactions entered into in the same year with Non-AEs.
As regards the year of allowability, the claim has to be allowed on the basis of restatement of the liability on the balance-sheet date as held by the hon’ble Supreme Court in the case of Woodward Governor India (P.) Ltd. (supra). Thus the claim of the assessee is allowable. In case there is gain in a year and the assessee has not offered it to tax, the Revenue is free to take action under law. In these years, admittedly there is loss which is allowable as deduction.
In the instant case, the capital asset having become the asset of the previous owner prior to 1-4-1981, the fair market value (FMV) of the same as on 1-4-1981 has been adopted as the deemed cost of acquisition in the hands of the assessee as well, and on which aspect of the matter there is no dispute. How could then, that being the case, the assessee claim further deduction toward the claimed cost in removing the encumbrance or satisfying the condition precedent, i.e., assuming so, subject to which the property stands bequeathed to her? It is, thus, only the cost, where so, as incurred by the previous owner, or that which would stand to have been incurred by him, that would qualify for deduction under section 48(ii).
Read about the ITAT Mumbai Bench ‘B’ ruling in the case of Ms. Noella P. Perry regarding the cost of acquisition and cost inflation index for properties acquired before 1st April 1981. The ruling clarifies the calculation of long-term capital gains and provides guidance on the applicable dates and values.
The assessee has placed reliance on some decisions. However, as afore-stated, the matter is purely factual, i.e., based on primary facts on which inference as to a finding of fact, i.e., the explanation with regard to that nature and source of credit being satisfactory or not, keeping the entirety of the facts and circumstances of the case into account, is to be drawn. The decisions cited by the assessee have been with reference to the one of positive inference.
A plausible manner in which WDV of an asset, thus, may be reckoned for the purpose of r. 14 is to reduce the depreciation at the rate as prescribed for the relevant block of the assets, i.e., under which the said asset falls, for the years for which depreciation has actually been allowed since its acquisition (though on the relevant block), to arrive at its’ WDV as at the relevant year-end, and which incidentally brings us to the second aspect of the matter.
Under the Transfer Pricing Regulations, the number of comparables may be one or more than one; but there is no upper limit prescribed u/s 92C of the I T Act. However, the first proviso to se.92(2) indicates that more than one price can be considered for determination of ALP and in such a case, the ALP shall be taken to be arithmetic mean of such price.
The facts of the case are that assessee is a limited company engaged in the business of manufacture of vacuum insulated tanks, cold convertor systems, atmospheric vaporizers and cryo containers, etc. The learned Commissioner of Income-tax-Departmental representative for the Revenue submitted that penalty has been levied on the addition amounting to Rs.5,04,326. He submitted that expenditure was claimed as business expenditure under the head “Staff and labour training expenses” incurred on the sponsorship of advance education of the son of the managing director for higher studies at abroad.
