Akzo Nobel India Limited, Kolkata V. DCIT, Circle - 10(1), Kolkata, Kolkata

ITA 114/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6565 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Kolkata
• Assessment Year: 2013-2014
• Appeal Filed On: 24-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: MANONEET DALAL; PURBA BANERJEE
• Keywords: Transfer pricing; International transaction; Earning of tax free income; Rule 8D; Set aside
• Section: 143(3); 92B; 14A; 115JB; 37(1); 144C; 13; 22; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH KOLKATA BEFORE SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM ITA NO.114/KOL/2018 (ASSESSMENT YEAR: 2013-14) AKZO NOBEL INDIA LIMITED GEETANJALI MIDDLETOWN STREET, KOLKATA 700071. VS. DCIT, CIRCLE-10(1), KOLKATA ./ ./PAN/GIR NO. : AAACI6297A ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI MANONEET DALAL, ADV. & PURBA BANERJEE, ADVOCATE RESPONDENT BY : DR. P. K. SRIHARI, CIT(DR) / DATE OF HEARING : 20/11/2019 /DATE OF PRONOUNCEMENT : 07/02/2020 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2013-14, IS DIRECTED AGAINST THE FAIR ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S 144C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 30.11.2017 WHICH INCORPORATES THE DIRECTIONS GIVEN BY THE DISPUTE RESOLUTION PANEL (DRP) U/S 144C(5) OF THE ACT DATED 19.09.2017. 2. GROUND NO.1 AND GROUND NO.6 RAISED BY THE ASSESSEE ARE GENERAL GROUNDS, THEREFORE, THEY DO NOT REQUIRE ANY ADJUDICATION. 3. GROUND NO.2 RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADDITION OF RS.119,60,60,440/- MADE BY THE ASSESSING OFFICER/DRP TOWARDS COMPENSATION FOR ADVERTISEMENT, MARKETING AND PROMOTION (AMP) EXPENSES. 4. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 18.10.2019, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.621/KOL/2017 FOR THE ASSESSMENT YEAR 2012-13 WHEREBY THE ISSUE RELATING TO COMPENSATION FOR ADVERTISING, MARKETING AND AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 2 PROMOTION EXPENSES (AMP EXPENSES) WAS DISCUSSED AND ADJUDICATED IN FAVOUR OF THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH. 5. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 18.10.2019. IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: 6. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE ALSO NOTE THAT THE ISSUE IN HAND IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL, IN ASSESSEES OWN CASE IN ITA NO. 560/KOL/2016 & ITA NO. 315/KOL/2016 WHEREIN THE TRIBUNAL BY ORDER DATED 28.08.2019 HAS HELD THAT THAT THE AMP EXPENSES CANNOT BE REGARDED AS AN INTERNATIONAL TRANSACTION AS PER SECTION 92 B OF THE ACT IN THE CASE OF THE ASSESSEE, SO AS TO INVOKE PROVISIONS OF SECTION 92 OF THE ACT. AND SINCE THE AMP EXPENDITURE IS NOT AN INTERNATIONAL TRANSACTION, THE TP ADJUSTMENT MADE IN THIS REGARD NEED TO BE DELETED AND HAS OBSERVED AS UNDER: 6. GROUND NO. 2 & 3, ARE ON THE ISSUE OF TRANSFER PRICING (TP) ADJUSTMENTS, MADE TOWARDS ADVERTISING, MARKETING AND PROMOTION EXPENSES (AMP EXPENSES). THE TRANSFER PRICING OFFICER (TPO) HELD THAT BY INCURRING SUCH EXPENSES, THE ASSESSEE HAS PROVIDED SERVICES TO ITS ASSOCIATE ENTERPRISES (AE). THOUGH A NUMBER OF ARGUMENTS WERE ADVANCED BY BOTH THE PARTIES ON THIS ISSUE, THE PRIMARY ARGUMENT OF THE ASSESSEE IS THAT, THE TRANSACTION IN QUESTION IS NOT AN INTERNATIONAL TRANSACTION. IN OTHER WORDS, THE SUBMISSIONS OF THE ASSESSEE IS THAT, THE AMP EXPENSES DO NOT CONSTITUTE INTERNATIONAL TRANSACTIONS. 6.1. WE FIND THAT THE ITAT KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S PHILIPS INDIA LTD. IN ITA NOS. 863 & 539/KOL/2016, ORDER DT. 15/12/2017, HELD AS FOLLOWS:- 43. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE PRIMARY ISSUE HERE ARISES WHETHER THE AMP EXPENSES CONSTITUTE THE INTERNATIONAL TRANSACTIONS SO AS TO ATTRACT THE PROVISIONS OF TRANSFER PRICING OF THE INCOME TAX ACT. THE CLAIM OF THE LD. AR IS THAT THE AMP TRANSACTION DOES NOT REPRESENT THE INTERNATIONAL TRANSACTION BETWEEN THE AE'S THEREFORE NO QUESTION OF DETERMINING THE ALP OF AMP TRANSACTIONS. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR IN THE GIVEN FACTS & CIRCUMSTANCES. AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 3 THEREFORE, IN OUR CONSIDERED VIEW THE AMP CANNOT BE REGARDED AS INTERNATIONAL TRANSACTION. IN HOLDING SO WE FIND THE SUPPORT & GUIDANCE FROM THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MARUTI SUZUKI INDIA LIMITED VS. CIT REPORTED IN 381 ITR 117 WHEREIN IT WAS HELD AS UNDER : '51. THE RESULT OF THE ABOVE DISCUSSION IS THAT IN THE CONSIDERED VIEW OF THE COURT THE REVENUE HAS FAILED TO DEMONSTRATE THE EXISTENCE OF AN INTERNATIONAL TRANSACTION ONLY ON ACCOUNT OF THE QUANTUM OF AMP EXPENDITURE BY MSIL. SECONDLY, THE COURT IS OF THE VIEW THAT THE DECISION IN SONY ERICSSON MOBILE COMMUNICATIONS INDIA (P.) LTD. CASE (SUPRA) HOLDING THAT THERE IS AN INTERNATIONAL TRANSACTION AS A RESULT OF THE AMP EXPENSES CANNOT BE HELD TO HAVE ANSWERED THE ISSUE AS FAR AS THE PRESENT ASSESSEE MSIL IS CONCERNED SINCE FINDING IN SONY ERICSSON TO THE ABOVE EFFECT IS IN THE CONTEXT OF THOSE ASSESSEES WHOSE CASES HAVE BEEN DISPOSED OF BY THAT JUDGMENT AND WHO DID NOT DISPUTE THE EXISTENCE OF AN INTERNATIONAL TRANSACTION REGARDING AMP EXPENSES.' IN VIEW OF WE NOTE THAT THE FACTS OF THE ABOVE CASE ARE IDENTICAL TO THE PRESENT ISSUE, THUS THE PRINCIPLE LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF MARUTI SUZUKI INDIA LIMITED (SUPRA) ARE APPLICABLE TO THE INSTANT CASE. RESPECTFULLY FOLLOWING THE SAME WE DISMISS THE GROUND OF APPEAL FILED BY THE REVENUE. 6.2. THE KOLKATA C BENCH OF THE TRIBUNAL IN THE CASE OF ORGANON INDIA PVT. LTD. VS. DCIT IN ITA NOS. 633 & 2459/KOL/2017, ORDER DT. 24/10/2018, APPLIED THE RATIO OF DECISION IN THE CASE OF PHILIPS INDIA LTD VS ACIT IN ITA NO. 2489/KOL/2017 DATED 4.4.2018 FOR ASST YEAR 2013-14, AND CAME TO A CONCLUSION THAT THE AMP EXPENDITURE IS NOT AN INTERNATIONAL TRANSACTION. 6.3. THE ARGUMENT OF THE LD. D/R THAT ON FACTS THE ASSESSEE IS A DISTRIBUTOR, IS NOT EMANATING FROM THE RECORDS. THE ASSESSEE IS ENGAGED IN MANUFACTURING AND SUPPLY ACTIVITIES. THUS, THE ARGUMENT OF THE LD. D/R IS REJECTED ON FACTS. THE FACTS OF THE ASSESSEES CASE AND THE FACTS IN THE CASE OF PHILIPS INDIA LTD. (SUPRA) AND ORGANON INDIA PVT. LTD. (SUPRA) ARE SAME AS ALL THESE COMPANIES ARE ENGAGED IN MANUFACTURING AND SALE. 7. IN VIEW OF THE ABOVE DISCUSSION, AMP EXPENSES CANNOT BE REGARDED AS AN INTERNATIONAL TRANSACTION AS PER SECTION 92B OF THE ACT, IN THE CASE OF THE ASSESSEE SO AS TO INVOKE PROVISIONS OF SECTION 92 OF THE ACT. AS WE HAVE HELD THAT THE AMP EXPENDITURE IN QUESTION IS NOT AN INTERNATIONAL TRANSACTION, THE TP ADJUSTMENT MADE IN THIS REGARD IS HEREBY DELETED AND THESE GROUNDS OF THE ASSESSEE ARE ALLOWED. RESPECTFULLY FOLLOWING THE DECISION CITED SUPRA IN ASSESSEES OWN CASE, WE HOLD THAT THE AMP EXPENDITURE IN QUESTION IS NOT AN INTERNATIONAL TRANSACTION, THEREFORE, THE TP ADJUSTMENT MADE IN THIS REGARD IS HEREBY DIRECTED TO BE DELETED AND THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 4 7. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH, IN ASSESSEE`S OWN CASE (SUPRA) AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS OF THE DIVISION BENCH (SUPRA). WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE DIVISION BENCH, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH IN ASSESSEES OWN CASE WE DELETE THE ADDITION MADE BY AO/TPO ON ACCOUNT OF COMPENSATION FOR ADVERTISING, MARKETING AND PROMOTION EXPENSES (AMP EXPENSES) . THEREFORE, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. GROUND NO.3 RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT OF RS.6,31,20,532/- DETERMINING ARMS LENGTH PRICE OF INTRA-GROUP SERVICES IN RESPECT OF SUPPORT SERVICES RECEIVED FROM ITS AES AS NIL. 9. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 18.10.2019, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.621/KOL/2017 FOR THE ASSESSMENT YEAR 2012-13 WHEREBY THE ISSUE OF DETERMINING ARMS LENGTH PRICE OF INTRA-GROUP SERVICES IN RESPECT OF SUPPORT SERVICES RECEIVED FROM ITS AES AS NIL WAS DISCUSSED AND REMANDED BACK TO THE FILE OF THE A.O/TPO. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH. 10 LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 11 WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 18.10.2019. IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 5 10. GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE IS AGAINST THE ACTION OF THE AO IN ENHANCING THE INCOME OF THE ASSESSEE BY RS.69,963,072/- BY DETERMINING ARMS LENGTH PRICE OF INTRA-GROUP SERVICES IN RESPECT OF SUPPORT SERVICES RECEIVED FROM ITS AES AS NIL. THIS ISSUE HAS BEEN CONSIDERED BY THIS BENCH OF THE TRIBUNAL IN THE EARLIER AY 2011-12 IN ASSESSEES OWN CASE IN ITA NO. 560/KOL/2016 & ITA NO. 315/KOL/2016 VIDE ORDER DATED 28.08.2019 IN WHICH THE TRIBUNAL HAS OBSERVED AS UNDER: 9. GROUND NO. 5, IS AGAINST THE TP ADJUSTMENT MADE WITH REGARD TO THE INTERNATIONAL TRANSACTION PERTAINING TO INTRA GROUP SERVICES. THIS ISSUE HAS BEEN CONSIDERED BY THIS BENCH OF THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS, IN THE ASSESSEES OWN CASE IN ITA NO. 229 & 346/KOL/2015, ASSESSMENT YEAR 2010-11, ORDER DT. 14/02/2018, WHEREIN IT HAS BEEN HELD AS FOLLOWS:- 7. WE HAVE HEARD BOTH THE PARTIES. WE NOTE THAT THE TPO HAS NOT CARRIED OUT THE EXERCISE FOR COMPUTING THE ARM'S LENGTH PRICE ON THE PLEA THAT ASSESSEE DID NOT PROVIDE THE AGREEMENT WITH ANCR, WHEREAS THE ASSESSEE CLAIMS TO HAVE PROVIDED A COPY ON 21.01.2014. THOUGH THE DRP OBSERVES THAT NATURE OF SERVICE PROVIDED BY ANCR ARE IN THE NATURE OF SERVICE FOR STRATEGIC AND OPERATIONS AND HELPS IN ACHIEVING CORPORATE OBJECTIVES BY ALIGNING WORKFORCE AND ORGANIZATIONAL OBJECTIVES IN THE FIELD OF MARKETING HR, FINANCE, MANAGEMENT SERVICES, PURCHASES ETC., HELD IT AS STEWARDSHIP SERVICES. WE NOTE THAT TPO HAS NOT CARRIED OUT ANY EXERCISE TO DETERMINED THE ARMS LENGTH PRICE OF BENEFIT, SERVICE ETC. AS PER THE MOST APPROPRIATE METHOD AS ENVISAGED IN SEC. 92C(1) OF THE ACT. SINCE THE TPO HAS NOT CARRIED OUT THE EXERCISE WHICH HE OUGHT TO HAVE CARRIED OUT AS ENVISAGED BY THE ACT ON THE ERRONEOUS PLEA THAT AGREEMENT BETWEEN ASSESSEE AND ANCR WAS NOT PLACED BEFORE HIM, WE SET ASIDE THE ORDER OF LD. DRP/AO & TPO AND REMAND THE MATTER BACK TO TPO FOR FRESH CONSIDERATION AND PASS ORDER IN THE LIGHT OF THE TRIBUNAL'S DETAILED ANALYSIS OF THE AGREEMENT BETWEEN ASSESSEE AND ANPAP WHICH WE DECIDED SUPRA. THE TPO IS DIRECTED TO PASS SPEAKING ORDER AFTER GIVING PROPER OPPORTUNITY TO ASSESSEE ON THIS ISSUE. 10. CONSISTENT WITH THE VIEW TAKEN THEREIN, AS AGREED BY BOTH THE PARTIES, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER, FOR FRESH ADJUDICATION, IN ACCORDANCE WITH LAW. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SINCE ISSUE IS IDENTICAL, RESPECTFULLY FOLLOWING THE DECISION CITED SUPRA, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE TO LAW. ACCORDINGLY, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12 AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH, IN ASSESSEE`S OWN CASE AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS OF THE DIVISION BENCH (SUPRA). WE FIND NO REASON TO INTERFERE AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 6 IN THE SAID ORDER OF THE DIVISION BENCH, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH IN ASSESSEES OWN CASE WE RESTORE THIS ISSUE BACK TO THE FILE OF THE A.O/TPO. THEREFORE, GROUNDS RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. GROUND NO.4 RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT OF RS.1,75,36,845/- TOWARDS CONTRACT RESEARCH AND DEVELOPMENT SERVICES RENDERED TO THE AE. 14 AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 18.10.2019, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.621/KOL/2017 FOR THE ASSESSMENT YEAR 2012-13 WHEREBY THE ISSUE RELATING TO TRANSFER PRICING ADJUSTMENT TOWARDS CONTRACT RESEARCH AND DEVELOPMENT SERVICES RENDERED TO THE AE WAS DISCUSSED AND THE ISSUE WAS REMANDED BACK TO THE FILE OF TPO FOR FRESH CONSIDERATION, THE CONTENTION OF THE ASSESSEE AS WELL AS LD. DR ON THIS ISSUE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH. 15 LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 16 WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 18.10.2019. IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: 13. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTE THAT AS PER THE ASSESSEE, THE ADJUSTMENT MADE BY TPO TOWARDS CONTRACT RESEARCH & DEVELOPMENT SERVICE (CONTRACT R&D) RENDERED TO THE AE IS ERRONEOUS FOR NOT TAKING INTO CONSIDERATION THE TRIBUNALS DECISION IN ASSESSEES SISTER CONCERN M/S. AKZO NOVEL CAR REFINISHES INDIA PVT. LTD. WHEREIN THE TRIBUNAL WHILE ADJUDICATING SIMILAR ISSUE HAS EXCLUDED PHARMA COMPANIES FROM THE LIST OF COMPARABLES AND WHICH ACTION OF TRIBUNAL HAS BEEN FOLLOWED BY THE LD. DRP IN ASSESSEES OWN CASE FOR AY 2014-15. IF THAT IS THE CASE, THEN WE ARE INCLINED TO SET ASIDE THE IMPUGNED ORDER AND REMAND THE ISSUE BACK TO THE LD. TPO FOR FRESH CONSIDERATION THE CONTENTION OF ASSESSEE AS WELL AS LD. DR ON THIS ISSUE AND TO PASS ORDER AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 7 AFRESH IN THE LIGHT OF DISCUSSION SUPRA BY A SPEAKING ORDER AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 17 AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH, IN ASSESSEE`S OWN CASE (SUPRA) AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS OF THE DIVISION BENCH (SUPRA). WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE DIVISION BENCH, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH WE REMAND THE ISSUE BACK TO THE FILE OF TPO/A.O FOR FRESH CONSIDERATION THE CONTENTION OF ASSESSEE AS WELL AS LD. DR ON THIS ISSUE AND TO PASS ORDER AFRESH IN THE LIGHT OF DISCUSSIONS MADE (SUPRA) BY A SPEAKING ORDER AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 18 GROUND NO.5 RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT OF RS.8,78,78,120/- TOWARDS RESEARCH & TRAINING EXPENDITURE PROVIDED BY THE ASSESSEE TO ITS AE FOR DEVELOPMENT AND IMPROVEMENT OF PRODUCT OF AES. 19 AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 18.10.2019, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.621/KOL/2017 FOR THE ASSESSMENT YEAR 2012-13 WHEREBY THE ISSUE RELATING TO TRANSFER PRICING ADJUSTMENT OF RESEARCH & TRAINING EXPENDITURE PROVIDED BY THE ASSESSEE TO ITS AE FOR DEVELOPMENT AND IMPROVEMENT OF PRODUCT OF AES WAS CONSIDERED AND ADJUDICATED IN FAVOUR OF ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH. 20 LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 21 WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 18.10.2019. IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 8 9. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF ASSESSEE, THE R&D EXPENSES INCURRED BY IT CANNOT BE REGARDED AS AN INTERNATIONAL TRANSACTION AS PER SECTION 92 B OF THE ACT. WE ALSO NOTE THAT THE ISSUE IN HAND IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 560/KOL/2016 & ITA NO. 315/KOL/2016 WHEREIN THIS TRIBUNAL BY ORDER DATED 28.08.2019 HAS HELD THAT THE EXPENSES IN QUESTION COVERED UNDER R&T EXPENSES RELATE TO, SERVICE FEE PAID BY THE COMPANY FOR R&T SERVICES OBTAINED BY THE COMPANY, FROM ANOTHER GROUP COMPANY OF THE ASSESSEE I.E., ICT INDIA RESEARCH & TECHNOLOGY CENTRE (ICI). ICT IS A COMPANY REGISTERED U/S 25 OF THE ACT AS A NOT FOR PROFIT ORGANIZATION. ICT PROVIDES MANUFACTURING AND TRAINING SUPPORT SERVICES TO THE ASSESSEE ON COST TO COST BASIS. ACCORDINGLY, THE EXPENSES COVERED UNDER THE HEAD R&T EXPENSES PERTAIN TO THE FEE PAID TO ICT. ICT PROVIDES TECHNICAL SUPPORT AND TRAINING TO THE MANUFACTURING AND MARKETING OPERATIONS OF PAINTS BUSINESS DIVISION. THE TRIBUNAL AFTER EXAMINING THE SERVICES RENDERED BY THE ICT HAS GIVEN A FACTUAL FINDING THAT THE ASSESSEE HAS NOT CARRIED OUT ANY R&T ACTIVITIES. THE EXPENDITURE IN QUESTION IS INCURRED ONLY FOR ITS MANUFACTURING OPERATIONS AND LOCAL ENVIRONMENTAL COMPLIANCE FROM HSE PERSPECTIVE. THE ASSESSEE SUBMITTED THAT ICT ALSO DOES NOT CARRY OUT ANY RESEARCH AND DEVELOPMENT ACTIVITIES FOR DEVELOPMENT OF ANY NEW PROJECT/TECHNOLOGY. IT IS PRIMARILY A CAPTIVE SUPPORT CENTRE FOR THE LOCAL INDIA OPERATION OF THE ASSESSEE. THUS, CONSIDERING THESE FACTS, THE TRIBUNAL HELD THAT THE EXPENDITURE ON RESEARCH AND TRAINING DOES NOT CONSTITUTE ANY INTERNATIONAL TRANSACTION. THUS, THE TRIBUNAL HELD THAT THE EXPENDITURE INCURRED ON R&T IS NOT AN INTERNATIONAL TRANSACTION AS PER SECTION 92B OF THE ACT, SO AS TO ENABLE INVOCATION OF PROVISION OF SECTION 92 OF THE ACT AND OBSERVED AS UNDER: 8.1. HERE ALSO, THOUGH A NUMBER OF ARGUMENTS WERE RAISED, THE JURISDICTIONAL ISSUE IS WHETHER R&T EXPENSES CAN BE CONSIDERED AS AN INTERNATIONAL TRANSACTION. THE EXPENSES IN QUESTION COVERED UNDER R&T EXPENSES RELATE TO, SERVICE FEE PAID BY THE COMPANY FOR R&T SERVICES, OBTAINED BY THE COMPANY, FROM ANOTHER GROUP COMPANY OF THE ASSESSEE I.E., ICT INDIA RESEARCH & TECHNOLOGY CENTRE (ICI). ICT IS A COMPANY REGISTERED U/S 25 OF THE ACT AS A NOT FOR PROFIT ORGANIZATION. ICT PROVIDES MANUFACTURING AND TRAINING SUPPORT SERVICES TO THE ASSESSEE ON COST TO COST BASIS. ACCORDINGLY, THE EXPENSES COVERED UNDER THE HEAD R&T EXPENSES PERTAIN TO THE FEE PAID TO ICT. ICT PROVIDES TECHNICAL SUPPORT AND TRAINING TO THE MANUFACTURING AND MARKETING OPERATIONS OF PAINTS BUSINESS DIVISION. THE SERVICES PROVIDED BY ICT DURING THE RELEVANT FINANCIAL YEAR CAN BE SUMMARIZED AS FOLLOWS: ASSISTED THE APPELLANT IN COMPLYING WITH VARIOUS HEALTH SAFETY AND ENVIRONMENT (HSE) PROCEDURES MANDATED FOR THE CHEMICAL INDUSTRY IN INDIA. PROVIDED SOLUTIONS FOR COMPLIANCE OF ENVIRONMENTAL REGULATIONS GOVERNED BY VARIOUS LOCAL AUTHORITIES IN INDIA. PROVIDED ASSISTANCE TO THE PRODUCTION DEPARTMENT AND THE COMPANY'S FACTORIES IN DETERMINING THE APPROPRIATE MIXTURE OF VARIOUS RAW MATERIAL AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 9 COMPONENTS FOR ACHIEVING THE DESIRED COLOUR AND TEXTURE OF THE PAINT TO BE MANUFACTURED. PROVIDED TECHNICAL TRAINING ON THE MANUFACTURING PROCESSES TO THE PRODUCTION TEAM FROM TIME TO TIME TO ENSURE TECHNICAL UPDATION, IMPROVEMENT AND REFINEMENT OF THE PRODUCTION TEAM FOR THE OVERALL EFFICIENT EXECUTION OF MANUFACTURING OPERATIONS OF THE APPELLANT. PROVIDED OTHER TECHNICAL SUPPORT ON DAY TO DAY BASIS TO THE MANUFACTURING OPERATIONS AND ADDRESSED THE MANUFACTURING PROCESS GAPS. PROVIDED TRAINING TO THE MARKETING TEAM ON THE PRODUCT, THE NATURE AND FEATURE OF THE PRODUCTS ETC. NECESSARY FOR SALES AND MARKETING OF THE APPELLANT'S PRODUCTS IN THE DESIGNATED MARKET I.E. INDIA. ASSISTED THE QUALITY DEPARTMENT IN HANDLING PRODUCT DEFECT/ QUALITY ISSUE OR REDRESSING ANY PRODUCT COMPLAINTS FROM THE CUSTOMERS. 8.2. A PERUSAL OF THE ABOVE DEMONSTRATES THAT, ON FACTS THE ASSESSEE HAS NOT CARRIED OUT ANY R&T ACTIVITIES. THE EXPENDITURE IN QUESTION IS INCURRED ONLY FOR ITS MANUFACTURING OPERATIONS AND LOCAL ENVIRONMENTAL COMPLIANCE FROM HSE PERSPECTIVE. THE ASSESSEE SUBMITTED THAT ICT ALSO DOES NOT CARRY OUT ANY RESEARCH AND DEVELOPMENT ACTIVITIES FOR DEVELOPMENT OF ANY NEW PROJECT/TECHNOLOGY. IT IS PRIMARILY A CAPTIVE SUPPORT CENTRE FOR THE LOCAL INDIA OPERATION OF THE ASSESSEE. THUS, WE ARE OF THE CONSIDERED OPINION THAT THE EXPENDITURE ON RESEARCH AND TRAINING DOES NOT CONSTITUTE ANY INTERNATIONAL TRANSACTIONS ON FACTS. WE ALSO FIND THAT THE TPO/AO HAS NOT CONSIDERED THIS EXPENDITURE INCURRED IN THE EARLIER YEARS TOWARDS R&T EXPENSES, AS INTERNATIONAL TRANSACTIONS. THUS, IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT THE EXPENDITURE INCURRED ON R&T IS NOT AN INTERNATIONAL TRANSACTION AS PER SECTION 92B OF THE ACT, SO AS TO ENABLE INVOCATION OF PROVISION OF SECTION 92 OF THE ACT. THUS, WE DELETE THE TP ADJUSTMENT MADE IN THIS REGARD AND ALLOW THIS GROUND OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE DECISION CITED SUPRA IN ASSESSEES OWN CASE, WE HOLD THAT THE AMP EXPENDITURE IN QUESTION IS NOT AN INTERNATIONAL TRANSACTION, THEREFORE, THE TP ADJUSTMENT MADE IN THIS REGARD IS HEREBY DIRECTED TO BE DELETED AND THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 22 AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH, IN ASSESSEE`S OWN CASE AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS OF THE DIVISION BENCH (SUPRA). WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE DIVISION BENCH, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH IN ASSESSEES OWN CASE WE DELETE THE ADDITION MADE BY AO/TPO ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT OF RS.8,78,78,120/- AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 10 TOWARDS RESEARCH & TRAINING EXPENDITURE PROVIDED BY THE ASSESSEE TO ITS AE FOR DEVELOPMENT AND IMPROVEMENT OF PRODUCT OF AES. THEREFORE, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 23. GROUND NO.7 RAISED BY THE ASSESSEE RELATES TO DISALLOWANCE OF EXPENSES AMOUNTING TO RS.19,10,58,444/- U/S 37(1) OF THE ACT ON THE GROUND THAT THE SAID EXPENSES ARE NOT IN THE NATURE OF ADVERTISEMENT AND PUBLICITY. 24 AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THE BREAKUP OF EXPENSES DISALLOWED U/S 37(1) OF THE ACT, WHICH IS GIVEN BELOW: (I) MAINTENANCE EXP OF COLOR SOLUTION MACHINE RS.8,14,71,248/- (II) TINTING SUPPORT / MATERIALS OTHER COS RS.9,39,10,043/- (III) INVENTORY - MIXING MACHINES MM W/OFF FOR THE PERIOD RS.40,02,475/- (IV) MIXING MACHINE EXPENSES RS.1,16,74,678/- 25 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE THE BENCH THAT ASSESSING OFFICER DISALLOWED 10% OF TOTAL ADVERTISEMENT AND PUBLICITY EXPENSES BEING RS.11.21 CRORE ON ESTIMATE BASIS ON THE GROUND OF ABSENCE OF COMPLETE DOCUMENTARY EVIDENCES OF THE EXPENDITURE. THE LD. COUNSEL SUBMITTED BEFORE US THAT THE ASSESSMENT ORDER WAS FRAMED U/S 143(3) OF THE ACT THEREFORE, THE ASSESSING OFFICER CANNOT DISALLOW THE EXPENSES ON ESTIMATE BASIS. 26 ON THE OTHER HAND, THE LD. DR ON BEHALF OF REVENUE SUBMITTED THAT ASSESSEE DURING THE COURSE OF ASSESSMENT STAGE HAS NOT SUBMITTED THE DOCUMENTS AND EVIDENCES BEFORE THE ASSESSING OFFICER TO EXAMINE THE VERACITY OF THE CLAIM OF THE ASSESSEE FOR THESE EXPENSES. SINCE THE ASSESSEE FAILED TO PRODUCE THE RELEVANT DOCUMENTS AND EVIDENCE BEFORE THE ASSESSING OFFICER THEREFORE, THE LD. DR FOR THE REVENUE PRAYED THE BENCH THAT THIS ISSUE SHOULD BE REMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR DE NOVO ADJUDICATION. AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 11 27 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE NOTE THAT PURSUANT TO REMAND REPORT DATED 24.08.2017, THE LD. DRP HELD THAT THESE EXPENSES CANNOT BE CONSIDERED AS ADVERTISEMENT EXPENSES. THE LD. DRP ALSO HELD THAT THE ABOVE EXPENSES SHOULD BE DISALLOWED IN ABSENCE OF PROPER EXPLANATION BY THE ASSESSEE. HOWEVER FOLLOWING THE DIRECTION OF THE LD. DRP, THE ASSESSING OFFICER DISALLOWED THE IMPUGNED EXPENSES TO THE EXTENT OF RS.19,10,58,444/-. WE NOTE THAT ALTHOUGH THE ASSESSEE HAD SUBMITTED THAT ADVERTISEMENT AND PUBLICITY ALSO COMPRISES OF SELLING AND DISTRIBUTION EXPENSES INCURRED DURING THE YEAR. THEREFORE THE EXPENSES MAY NOT BE RESTRICTED TO ONLY ADVERTISEMENT AND PUBLICITY EXPENSES PER SE. THE LD. COUNSEL SUBMITTED BEFORE US THAT EVEN IF CERTAIN EXPENDITURE ARE NOT IN THE NATURE OF ADVERTISEMENT AND PUBLICITY, IT DOES NOT SIGNIFY THAT SUCH EXPENDITURES BE DISALLOWED FOR THE REASON OF INCORRECT CLASSIFICATION OR ON A PRESUMPTION THAT THESE ARE DUPLICATE. HOWEVER LD. DR FOR THE REVENUE SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO PRODUCE THE EVIDENCE/DOCUMENTS RELATING TO THESE EXPENSES DURING THE ASSESSMENT STAGE THEREFORE THE ASSESSING OFFICER COULD NOT VERIFY THE NATURE OF THESE EXPENSES WHETHER THEY ARE UNDER THE HEAD OF ADVERTISEMENT AND PUBLICITY OR WHETHER THEY WILL FALL UNDER THE CEILING OF DISTRIBUTION EXPENSES. THEREFORE, WE ARE OF THE VIEW THAT ONE MORE OPPORTUNITY SHOULD BE GIVEN BY THE ASSESSEE TO EXPLAIN THE NATURE OF THESE EXPENSES BEFORE THE ASSESSING OFFICER AND THEREFORE WE DIRECT THE ASSESSING OFFICER TO EXAMINE THESE EXPENSES AND ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. THE LD. DR HAS NO OBJECTION IF THE ISSUE IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER. THEREFORE WE SET ASIDE THE ORDER OF LD. DRP/A.O ON THIS PARTICULAR ISSUE AND REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THESE EXPENSES AND ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. FOR STATISTICAL PURPOSES, THIS GROUND OF THE ASSESSEE IS ALLOWED. 28. GROUND NO.8 RAISED BY THE ASSESSEE RELATES TO DISALLOWANCE OF EXPENDITURE OF RS.33,12,488/- U/S 14A OF THE ACT WITHOUT STATING ANY COGENT REASONS FOR COMPUTATION OF DISALLOWANCE MADE BY THE ASSESSEE. AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 12 THE ASSESSEE RAISED THE ISSUE OF DISALLOWANCE OF EXPENDITURE U/S 14A OF THE ACT WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. 29. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE COMPANY EARNED DIVIDEND INCOME FROM MUTUAL FUNDS OF RS. 33,12,488/-. THE ASSESSEE SUO MOTO DISALLOWED RS.7,61,500. U/S 14A R.W.R. 8D, IN ITS COMPUTATION OF INCOME UNDER THE NORMAL PROVISION OF THE ACT. THE ASSESSING OFFICER COMPUTED DISALLOWANCE UNDER SECTION 14A OF THE ACT AT RS.87,23,517/- CONSIDERING ALL THE INVESTMENTS HELD BY THE ASSESSEE. THE AO HELD THAT EXPENDITURE UNDER SECTION 14A OF THE ACT SHOULD BE CONSIDERED WHILE COMPUTING BOOK PROFIT AS PER CLAUSE (F) UNDER EXPLANATION [1] OF SECTION 115JB OF THE ACT. THE DRP CONSIDERED THE SUBMISSION OF THE ASSESSEE AND DIRECTED THE AO TO FOLLOW JUDICIAL DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. AND RESTRICT THE DISALLOWANCE UNDER SECTION 14A TO RS.33,12,488/-. 30. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD. CIT(A) AND OTHER MATERIALS BROUGHT ON RECORD. WE NOTE THAT ISSUE UNDER CONSIDERATION IS NO LONGER RES INTEGRA. THE SPECIAL BENCH OF ITAT IN THE CASE OF CHEMINVEST LTD. VS CIT 121 ITD 318 (DELHI)(SB) HELD THAT THE DISALLOWANCE U/S 14A OF THE ACT CAN BE MADE EVEN IN THE YEAR WHERE THERE IS NO EXEMPT INCOME EARNED OR RECEIVED BY THE ASSESSEE. THE DECISION OF THE SPECIAL BENCH ON WHICH THE LD. DRP PLACED RELIANCE HAS SINCE BEEN REVERSED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. VS CIT 317 ITD 33(DELHI), WHEREIN IT WAS HELD THAT IF THERE IS NO EXEMPT INCOME EARNED OR RECEIVED BY THE ASSESSEE, NO DISALLOWANCE IS WARRANTED UNDER SECTION 14A READ WITH RULE 8D OF THE RULES. THE ITAT KOLKATA IN THE CASE OF REI AGRO LTD. VS. DCIT 144 ITD 141 (KOL-TRIB) HAS HELD AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 13 THAT IT IS ONLY THE INVESTMENTS WHICH YIELDS DIVIDEND DURING THE PREVIOUS YEAR THAT HAS TO BE CONSIDERED WHILE ADOPTING THE AVERAGE VALUE OF INVESTMENTS FOR THE PURPOSE OF RULE 8D(2)(II) & (III) OF THE RULES. THE AFORESAID VIEW OF THE TRIBUNAL HAS SINCE BEEN AFFIRMED AS CORRECT BY THE HON'BLE CALCUTTA HIGH COURT IN G.A.NO.3581 OF 2013 IN THE APPEAL AGAINST THE ORDER OF THE TRIBUNAL IN THE CASE OF REI AGRO LTD. (SUPRA). THEREFORE, WE DIRECT THE AO TO COMPUTE THE DISALLOWANCE UNDER RULE 8D(2)(III) OF THE RULES BY TAKING INTO ACCOUNT DIVIDEND BEARING SECURITIES. 31. NOW COMING TO THE ISSUE OF DISALLOWANCE OF EXPENDITURE U/S 14A OF THE ACT WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. WE NOTE THAT THE PROVISIONS RELATING TO ADJUSTMENTS BY WAY OF INCREASE AND DECREASE TO THE NET PROFIT SHOWN BY THE ASSESSEE IN PROFIT & LOSS ACCOUNT, ARE VERY EXPLICIT IN SECTION 115JB OF THE ACT. THE ITEMS WHICH ARE TO BE ADDED TO THE NET PROFIT HAVE BEEN LISTED OUT IN EXPLANATION 1 TO THAT SECTION. THE LEARNED AO SHOULD ADHERE TO THAT LIST AND CANNOT TRAVEL BEYOND THESE ITEMS. SINCE THERE IS NO MENTION OF SECTION 14A IN THE SAID EXPLANATION 1 TO SECTION 115JB, THE SAME CANNOT BE ADDED TO RE- DETERMINE THE QUANTUM OF 'BOOK PROFIT'. THE PROVISIONS OF SECTION 115JB RELATING TO COMPUTATION OF BOOK PROFIT ARE AMPLY CLEAR AND UNAMBIGUOUS. THESE PROVISIONS DO NOT LEAVE ANY ROOM FOR ADJUSTMENT BY THE ASSESSING OFFICER OTHER THAN THOSE MENTIONED IN EXPLANATION 1 TO SECTION 115JB TO THE NET PROFIT REFLECTED IN THE ACCOUNTS OF ANY ASSESSEE AND ADJUSTMENT BY WAY OF DISALLOWANCE U/S 14A IS NOT INCLUDED IN THE SAID EXPLANATION. THIS ISSUE IS ALSO COVERED BY THE JUDGMENT OF THE SPECIAL BENCH OF TRIBUNAL IN THE CASE OF ACIT VS. VIREET INVESTMENTS (P) LTD, IN ITA NO.502/DEL/2012. THEREFORE, WE DIRECT THE AO/TPO NOT TO CONSIDER DISALLOWANCE U/S 14A, WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. AKZO NOBEL INDIA LIMITED ITA NO.114/KOL/2018 14 32. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07/02/2020. SD/- (A. T. VARKEY) SD/- (A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 07 /02/2020 RS, SR. P.S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT- AKZO NOBEL INDIA LIMITED 2. / THE RESPONDENT.- DCIT, CIRCLE-10(1), KOLKATA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA .