Vedanta Limited Vs ACIT (Delhi High Court)
The present Income Tax Appeal was filed by Vedanta Limited challenging the order dated 21 September 2020 passed by the Income Tax Appellate Tribunal in ITA No. 12/DEL/2020 for Assessment Year 2014-15. The appellant placed on record a control chart proposing seven questions of law, out of which the Court framed three questions concerning limitation of the final assessment order under Section 153, the claim of balance additional depreciation under Section 32(1)(iia), and the disallowance relating to Debenture Redemption Reserve.
The appellant also proposed three questions challenging the ITAT’s remand of issues concerning Management Consultancy Fee paid to an Associated Enterprise, Out of Books Receivables and reduction of provision for taxes while computing book profits under Section 115JB. These questions were framed and taken up for hearing with the consent of the parties.
On the Management Consultancy Fee issue, the Dispute Resolution Panel had directed the Assessing Officer to disallow the expenses paid to the Associated Enterprise on a protective basis under Section 37(1). The ITAT concluded that the evidence produced by the assessee was insufficient to demonstrate that the Associated Enterprise had actually rendered the services mentioned in the agreement. It therefore restored the issue to the Transfer Pricing Officer for fresh determination, while permitting the assessee to place additional documents on record. The assessee contended that it had no further evidence and sought determination by the ITAT on the documents already available.
