DCIT Vs EYGBS (India) Private Limited (ITAT Bangalore)
In the matter abovementioned ITAT held that assessee is liable to claim deduction u/s 10AA can not be disallowed when
Assessee filed its return of income at Rs.100,26,18,189 after claiming deduction u/s. 10AA of Rs.44,89,19,404 and deduction under Chapter VIA of Rs.11,92,067. Assessee has claimed deduction u/s. 10AA after voluntary Transfer Pricing (TP) adjustment of Rs.9,50,00,000 pursuant to APA entered into and consequent to that the profits of the undertaking of SEZ unit eligible for deduction u/s. 10AA was computed at Rs.55,80,52,277 wherein voluntary TP adjustment of Rs.6,77,00,000 was made resulting into eligible income for deduction u/s. 10AA of Rs.62,57,52,277. The claim of assessee was that assessee entered into APA on 16.3.2016 and consequently the ALP of the international transaction was agreed with higher adjustment of Rs.9.50 crores. It is the claim of the assessee that adjusted APA is not an adjustment made by the TPO, but as an agreed negotiated price and therefore provisions of section 92C(4) is not applicable and assessee is entitled to higher deduction. AO made disallowance of Rs. 6,20,73,761/- on account of excess claim of deduction.
On appeal CIT (A) held that disallowance u/s 10AA can be made only when the total income is enhanced by the AO or TPO. Co-ordinate bench has already decided this issue for AY 2014-15 and disallowance u/s 10AA was deleted. Reliance was placed on the CBDT Circular No.14 of 2006.
