UNITECH LTD., NEW DELHI V. DCIT, CIRCLE- 27(1), NEW DELHI

ITA 7923/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8489 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I2
• Assessment Year: 2014-2015
• Appeal Filed On: 13-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Transfer pricing; International transaction; Bad and doubtful debts; Notional interest; Commercial expediency
• Section: 143(3); 92B; 142(1); 201; 143(2)

Judgement Text

1 ITA NO. 7923/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I-2 NEW DELHI SH. R. K. PANDA, ACC OUNTANT MEMBER AND MS SUCHITRA KAMBLE, JU DICIAL MEMBER ITA NO. 7923/ DEL/2018 ASSESSMENT Y EAR: 2014-15 M/S. UNITECH LTD., BASEMENT, 6, COMMUNITY CENTRE, SAKET, DELHI-110017 PAN : AAACU1482H (APP ELL ANT) VS DCIT, CIRCLE-27(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. ROHIT TIWARI, ADV., MS. KANIKA JAIN, ADV. RESPONDENT BY SH. H.K.CHOUDHARY , CIT - DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER U/S 143(3) O F THE INCOME TAX ACT, 1961 PASSED BY DCIT, CIRCLE 27(1), NEW DELHI V IDE ORDER DATED 31.10.2008 FOR ASSESSMENT YEAR 2014-15. 2. THE GROUNDS OF APPEAL ARE AS UNDER : 1. THE ORDER PASSED BY THE LD. ASSESSING OFFICER (LD. AO) UNDER SECTION 143(3) R.W.S. 144A OF THE ACT IN COMPLIANCE OF THE ORDER/DIRECTIONS DATED 07.09.2018 PASSED BY THE LD. DRP, IS BAD IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. AO HAS ERRED IN LAW AND ON THE FACTS A ND CIRCUMSTANCES OF THE CASE IN MAKING ADDITIONS OF RS. 1,89,23,86,405/- TO THE RETURNED INCOME OF DATE OF HEARING 17.09.2019 DATE OF PRONOUNCEMENT 10.10.2019 2 ITA NO. 7923/DEL/2018 THE APPELLANT. 3. THE LD. AO HAS GROSSLY ERRED IN FACT IN MAKING AN ADDITION OF A NOTIONAL INTEREST OF RS. 23,62,84,965/- U/S 36(1)(I II) ALLEGING THE SHARE APPLICATION MONEY TO BE INTEREST FREE ADVANCES. 4. THE LD. AO HAS GROSSLY ERRED IN FACT IN MAKING A DISALLOWANCE OF NOTIONAL INTEREST OF RS. 101,91,12,590/- ON THE INT EREST FREE LOANS ADVANCED BY THE APPELLANT TO ITS SUBSIDIARIES AND M AKING ADDITION OF THE SAME U/S 36(1)(III). 5. THE LD. AO HAS GROSSLY ERRED IN DISALLOWING THE STANDARD DEDUCTION OF 30% CLAIMED BY THE APPELLANT U/S 24 AMOUNTING TO RS . 1,37,85,280/- BY ERRONEOUSLY TREATING THE SAME AS BUSINESS INCOME. 6. THE LD. AO HAS GROSSLY ERRED IN MAKING A TRANS FER PRICING ADDITION OF RS. 50,58,12,728/- TOWARDS THE GUARANTEE FEE. 7. THE LD. AO HAS ERRED IN FACT AND ON LAW IN MA KING ADDITION OF RS. 1,59,76,505/- OF THE PROVISION FOR DOUBTFUL DEBTS/ ADVANCES. 8. THE LD. AO HAS ERRED IN FACT AND ON LAW IN MA KING DISALLOWANCE OF RS. 73,876/- BEING LOSS ON SALE OF LONG-TERM INVEST MENT. 9. THE LD. AO HAS ERRED IN FACT AND ON LAW IN MA KING DISALLOWANCE OF RS. 12,06,963/- BEING LOSS ON DISPOSAL OF TANGIBLE FIXED ASSETS. 10. THE LD. AO HAS ERRED IN MAKING DISALLOWANCE O F RS. 8,388/- BEING PROVISION FOR DIMINUTION IN THE VALUE OF CURRENT A SSETS. 11. THE LD. AO GROSSLY ERRED IN FACT AND ON LAW IN MAKING DISALLOWANCE OF RS. 9,98,57,685/- U/S 36(1)(VA) OF THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND, PENSION FUND A ND ESI AND IN TREATING THE SAME AS INCOME OF THE APPELLANT U/S 2( 24)(X). 12. THE LD. AO HAS ERRED IN FACT AND ON LAW IN MAK ING ADHOC DISALLOWANCE OF RS. 1,03,425/- (BEING 50%N OF THE E XPENSES CLAIMED) WITH RESPECT TO COMPUTER TERMINAL BILL. 13. THE LD. AO HAS ERRED IN FACT AND ON LAW IN MAKI NG DISALLOWANCE TO THE TUNE OF RS. 1,64,000/- OF THE BAD DEBTS/ADVA NCES WRITTEN OFF. 14. THE ABOVE GROUNDS OF APPEALS ARE INDEPENDENT AN D WITHOUT PREJUDICE TO ONE ANOTHER. 15. THE APPELLANT MAY BE ALLOWED TO ADD/ WITHDRAW O R AMEND ANY 3 ITA NO. 7923/DEL/2018 GROUND OF APPEAL AT THE TIME OF HEARING. 3. THE ASSESSEE IS INTO THE BUSINESS OF CONSTRUCTIO N AND DEVELOPMENT OF REAL ESTATE PROJECTS IN NATIONAL CAPITAL REGION (NC R). THE COMPANY HAS A DIVERSIFIED PRODUCT MIX COMPRISING RESIDENTIAL, COM MERCIAL, IT PARKS, RETAILS, AMUSEMENT PARKS AND HOTELS. THE CORE BUSIN ESS OF THE COMPANY IS REAL ESTATE. THE COMPANY HAS MANY REAL ESTATE PROJE CTS ALL OVER INDIA RANGING FROM RESIDENTIAL TO COMMERCIAL, RETAIL, HOS PITALITY, ENTERTAINMENT HUBS AND SLUM REHABILITATION. IN ADDITION, COMPANY WAS IN THE PROCESS OF DEVELOPING NOTIFIED SEZ JOINTLY OWNED WITH UNITECH CORPORATE PARK PLC. (UCP). IN ADDITION, COMPANY IS PROVIDING CONSULTANC Y RELATED TO MANAGEMENT OF ITS JOINT VENTURE PROJECTS. THE COMPA NY HAS CONSTRUCTION BUSINESS IN CIVIL CONSTRUCTION AND INFRASTRUCTURE P ROJECTS AS ONE OF ITS BUSINESS SEGMENT. THE ASSESSEE COMPANY E-FILED IT S RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,44,87,49,671/- FOR THE ASSESSMENT YEAR 2014-15 ON 30.11.2014. THE CASE WAS SELECTED FOR CO MPLETE SCRUTINY. ACCORDINGLY, STATUTORY NOTICE U/S 143(2) OF THE INC OME TAX ACT, 1961 WAS ISSUED ON 01.09.2015 AND SERVED UPON THE ASSESSEE C OMPANY. QUESTIONNAIRE DATED 09.08.2016 U/S 142(1) OF THE AC T WAS SENT TO THE ASSESSEE COMPANY CALLING FOR DETAILS, SUBMISSIONS A ND EXPLANATIONS. IN RESPONSE TO THE NOTICE ISSUED, CA/ AUTHORIZED REPRE SENTATIVE APPEARED ON BEHALF OF THE ASSESSEE COMPANY AND ATTENDED ASSESSM ENT PROCEEDINGS FROM TIME TO TIME AS WELL AS FILED SUBMISSIONS AND NECES SARY DETAILS BEFORE THE ASSESSING OFFICER. REFERENCE WAS MADE TO THE ADDITI ONAL CIT, RANGE 27, NEW DELHI TO DETERMINE THE ARMS LENGTH PRICE IN RESPECT OF SPECIFIED DOMESTIC TRANSACTIONS UNDERTAKEN BY THE ASSESSEE DURING THE FINANCIAL YEAR 2013-14. THE TRANSFER PRICING OFFICER (TPO) PROPOSED CERTAIN ADJUSTMENTS IN THE INCOME OF THE ASSESSEE TO THE EXTENT OF RS. 85,56,1 7,291/- ON ACCOUNT OF GUARANTEE THAT SHOULD HAVE BEEN CHARGED BY THE ASS ESSEE. THE DRAFT ASSESSMENT ORDER WAS PASSED ON 29.12.2017 BY THE AS SESSING OFFICER. BEING AGGRIEVED BY THE SAID, THE ASSESSEE FILED OBJECTION S BEFORE THE DISPUTE RESOLUTION PANEL (DRP). THE DRP PASSED DIRECTIONS O N 07.09.2018 AND DIRECTED THE ASSESSING OFFICER TO DELETE CERTAIN AD DITIONS MADE BY THE 4 ITA NO. 7923/DEL/2018 ASSESSING OFFICER IN THE DRAFT ASSESSMENT ORDER. TH E ASSESSING OFFICER BY FOLLOWING THE DIRECTIONS OF THE DRP MADE VARIOUS AD DITIONS THEREBY ASSESSING INCOME AT RS. 3,34,11,36,080/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED PRESENT APPEAL BEFORE US. 5. THE LD. AR SUBMITTED THAT AS REGARDS GROUND NOS. 1 AND 2 THE SAME ARE GENERAL IN NATURE. THE LD. AR FURTHER SUBMITTED THAT AS REGARDS GROUND NOS. 7, 8, 9, 10, 12 AND 13 THE SAME ARE NOT PRESSE D. 6. AS GROUND NOS. 1 AND 2 ARE GENERAL IN NATURE, TH E SAME ARE DISMISSED. AS THE LD. AR IS NOT PRESSING GROUND NOS . 7, 8, 9, 10, 12 AND 13 THE SAID GROUNDS ARE HEREBY DISMISSED. 7. AS REGARDS GROUND NO. 3 RELATING TO NOTIONAL INT EREST DISALLOWANCE ON SHARE APPLICATION FOR AN AMOUNT OF RS. 23,62,84,965 /-, THE LD. AR SUBMITTED THAT THE SAID GROUND IS COVERED IN ASSESS EES FAVOUR BY THE TRIBUNALS DECISION IN ASSESSMENT YEAR 2007-08, 201 2-13, 2013-14 AND 2011-12 IN ASSESSEES OWN CASE (ITA NOS. 1905, 1906 & 1907/DEL/2017 FOR A.Y. 2007-08, 2012-13 & 2013-14 ORDER DATED 24.07.2 019 AND ITA NO. 6585/DEL/2015 FOR A.Y. 2011-12 ORDER DATED 12.02.20 19) 8. THE LD. DR DID NOT OBJECT OR CONTROVERT THE SUBM ISSIONS OF THE LD. AR. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN ASSESSMENT YEA R 2011-12 IN ASSESSEES OWN CASE BEARING ITA NO. 6585/DEL/2015 AND 311/DEL/ 2016 ORDER DATED 12.02.2019 HELD AS UNDER :- 21. FURTHER, IF AT ALL SUCH DISALLOWANCE IS BEING MADE ON NOTIONAL AND HYPOTHETICAL BASIS TREATING SHARE APPLICATION MONEY AS ADVANCE OR INTEREST FREE LOAN, THEN AO ALSO NEEDS TO TAKE INTO CONSIDER ATION, WHETHER ASSESSEE COMPANY HAS SUFFICIENT SURPLUS FUND OR NOT; AND IF SURPLUS FUND EXCEEDED 5 ITA NO. 7923/DEL/2018 THE AMOUNT OF ADVANCE, THEN AGAIN, NO NOTIONAL INTE REST OR DISALLOWANCE CAN BE MADE. HERE IT IS UNDISPUTED FACT THAT ASSESS EE COMPANY HAS MORE THAN RS. 9281.87 CRORES OF ACCUMULATED RESERVES AND DURING THE YEAR ITSELF ITS RESERVES HAVE INCREASED BY RS.1379 CRORES AND A MOUNT OF SHARE APPLICATION MONEY ADVANCE WAS ONLY RS. 245.34 CRORE S. THUS, IN SUCH CIRCUMSTANCES, PRESUMPTION IS ALWAYS IN THE FAVOUR OF THE ASSESSEE THAT THESE ARE ADVANCES OUT OF SURPLUS FUNDS ONLY AND SU CH PRESUMPTION HAS BEEN LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. MAX INDIA LTD. (P&H) HIGH COURT, REPORTED IN 39 8 ITR 209. THUS, UNDER THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE HOLD T HAT NO DISALLOWANCE CAN BE MADE. IN SO FAR AS RELIANCE PLACED ON EARLIER YE AR ORDERS, LD. COUNSEL HAS BROUGHT ON RECORD THAT THE REVENUES APPEALS FO R THE ASSTT. YEAR 2009- 10 AND 2010-11 HAVE BEEN DISMISSED BY THE TRIBUNAL BY QUASHING THE ASSESSMENTS ON THE GROUND OF LIMITATION. THUS, ON M ERITS WE HOLD THAT NO ADDITION IS CALLED FOR AND CONSEQUENTLY THE GROUND NO. 4 TO 4.2 IS TREATED AS ALLOWED. IN THE PRESENT ASSESSMENT YEAR 2014-15 THE FACTS RE MAIN THE SAME. THE ASSESSEE COMPANY HAD ADEQUATE SURPLUS/OWNED FUNDS T HROUGH WHICH THESE INVESTMENT IN SHARE APPLICATION MONEY WERE MADE. SI NCE, THE ISSUE IS IDENTICAL IN THE PRESENT YEAR, GROUND NO. 3 IS ALLO WED. 10. AS REGARDS GROUND NO. 4 RELATING TO NOTIONAL IN TEREST DISALLOWANCE ON ADVANCE TO SUBSIDIARIES FOR AN AMOUNT OF RS. 101,91 ,12,590/-, THE LD. AR SUBMITTED THAT THIS GROUND IS ALSO COVERED IN FAVOU R OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR ASSESSMENT YEAR 2011-1 2. 11. THE LD. DR COULD NOT CONTROVERT THE SAME. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN ASSESSMENT YEA R 2011-12 HELD AS UNDER:- 30. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND RE LEVANT FINDING GIVEN IN THE IMPUGNED ORDERS, WE FIND THAT NOWHERE THE AO HAS REBUTTED THE 6 ITA NO. 7923/DEL/2018 CONTENTION OF THE ASSESSEE THAT THESE ADVANCES TO S ISTER CONCERNS WERE FOR BUSINESS PURPOSE OR FOR COMMERCIAL EXPEDIENCY NOR H E HAS TRIED TO ESTABLISH THE NEXUS BETWEEN THE MONEY ADVANCED FROM THE BORROWED FUNDS OR HAS ASKED THE ASSESSEE TO ESTABLISH THAT S UCH ADVANCE HAS BEEN GIVEN OUT OF SURPLUS OR INTEREST THROUGH FUND. HERE IN THIS CASE THE SUBSIDIARY COMPANIES/CONCERNS TO WHOM MONEY HAVE BE EN ADVANCED WERE ALSO ENGAGED IN REAL ESTATE BUSINESS WITH WHOM ASSESSEE COMPANY HAD ENTERED INTO JOINT VENTURE FOR VARIOUS PROJECTS . ONCE SUCH A CONTENTION OF THE ASSESSEE HAS NOT BEEN REBUTTED OR REFUTED BY THE AO, THEN IT HAS TO BE ACCEPTED THAT SUCH AN ADVANCE WAS FOR THE BUSINE SS PURPOSE. ACCORDINGLY, WE HOLD THAT SUCH AN ADVANCE WAS FOR C OMMERCIAL EXPEDIENCY AND THEREFORE, NO DISALLOWANCE COULD HAVE BEEN MADE IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS LTD. VS CIT(A) 288 ITR 1(SC). 31. IT IS FURTHER NOTICED THAT THE ASSESSEE COMPANY HAD HUGE SURPLUS FUNDS WHICH FAR EXCEEDED THE ADVANCES; AND THEREFOR E, WITHOUT THEIR BEING A NEXUS PROVED BY THE AO THAT ONLY BORROWED FUNDS W ERE ADVANCED, THEN PRESUMPTION CAN BE DRAWN THAT SUCH ADVANCES HAVE BE EN GIVEN OUT OF INTEREST FREE FUNDS. THIS VIEW IS NOW WELL SUPPORTE D BY VARIOUS JUDGMENTS, LIKE; CIT VS. RELIANCE UTILITIES LTD. REPORTED IN 3 13 ITR 340 (BOM); AND CIT VS. MAX INDIA LTD., REPORTED IN 398 ITR 209 (P&H). ACCORDINGLY, SUCH A DISALLOWANCE IS DELETED ON THIS GROUND ALSO. IN THE PRESENT YEAR AS WELL, THE ASSESSEE COMPANY H AD HUGE SURPLUS FUNDS WHICH FAR EXCEEDED THE ADVANCES; AND THEREFOR E, WITHOUT THERE BEING A NEXUS PROVED BY THE ASSESSING OFFICER THAT ONLY BOR ROWED FUNDS WERE ADVANCED, THEN PRESUMPTION CAN BE DRAWN THAT SUCH ADVANCES HAVE BE EN GIVEN OUT OF INTEREST FREE FUNDS. THUS, GROUND NO. 4 IS ALLOWED. 13. AS REGARDS GROUND NO. 5 RELATING TO HOUSE PROPE RTY INCOME TREATED AS BUSINESS INCOME AND DISALLOWANCE U/S 24 FOR AN AMOU NT OF RS. 1,37,85,280/- , THE LD. AR SUBMITTED THAT THE SAID ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2011-12. 7 ITA NO. 7923/DEL/2018 14. THE LD. DR SUBMITTED THAT WHETHER THE HOUSE PRO PERTY INCOME TREATED AS BUSINESS INCOME AND WHETHER THE ASSESSEE CLAIMED DEPRECIATION ON THE SAME OR NOT HAS TO BE VERIFIED. THEREFORE, T HE ISSUE MAY BE REMANDED BACK TO THE FILE OF ASSESSING OFFICER. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF THE ASSESS MENT ORDER THE CONTENTION OF THE REVENUE AS TO WHETHER THE DEPRECI ATION WAS CLAIMED OR NOT BY THE ASSESSEE NEEDS TO BE VERIFIED. THOUGH, THE D ECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2011-12 IS IN FAVOUR OF THE ASSESSE E, THE FACTUAL ASPECT IN THE PRESENT ASSESSMENT YEAR HAS TO BE VERIFIED BY T HE ASSESSING OFFICER. THEREFORE, WE REMAND BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THIS DISALLOWANCE IN THE CONTEXT OF BUSINESS INCOME AND DEPRECIATION CLAIMED BY THE ASSESSEE THEREOF. NEEDLESS TO SAY TH E ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF N ATURAL JUSTICE. THEREFORE, GROUND NO. 5 IS PARTLY ALLOWED FOR STATISTICAL PURP OSES. 16. AS REGARDS GROUND NO. 6 RELATING TO TRANSFER PR ICING ADJUSTMENT ON ACCOUNT OF CORPORATE GUARANTEE ISSUED BY THE ASSESS EE FOR AN AMOUNT OF RS. 50,58,12,728/-, THE LD. AR SUBMITTED THAT THIS ISSU E AS TO WHETHER CORPORATE GUARANTEE IS AN INTERNATIONAL TRANSACTION OR NOT IS NOT COVERED IN ASSESSEES FAVOUR BY THE COORDINATE BENCH OF DELHI TRIBUNAL IN CASE OF FRESENIUS KABI ONCOLOGY LTD. [2019] 106 TAXMANN.COM 403. THE LD. AR FURTHER SUBMITTED THAT IT IS IN THE NATURE OF SHARE HOLDER ACTIVITY AND THUS THERE IS NO REQUIREMENT OF CHARGING ANY GUARANTEE F EE ON THE SAME. THE LD. AR RELIED UPON THE OECD GUIDELINES, AUSTRALIAN GUID ELINES AND VARIOUS JUDICIAL PRONOUNCEMENTS. THE LD. AR SUBMITTED THAT THE PROVISION OF CORPORATE GUARANTEE THOUGH IN ORDER U/S 92B OF THE ACT BY WAY OF MANAGEMENT DOES NOT HAVE ANY PROFIT AND LOSS IN THE INSTANT CASE AND WOULD NOT BE HELD AS INTERNATIONAL TRANSACTION / SP ECIFIED DOMESTIC TRANSACTION AS PER SECTION 92B AND 92BA OF THE ACT. THE LD. AR FURTHER SUBMITTED THAT WITHOUT PREJUDICE TO THE ABOVE SUBMI SSIONS, FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CASE O F CIT VS. ASIAN PAINTS 8 ITA NO. 7923/DEL/2018 LTD. [2016] 75 TAXMANN.COM 152 (BOM.) WHEREIN CORPO RATE GUARANTEE FEE OF 0.25 WAS FOUND TO BE REASONABLE, THE SAME FEE BE AD OPTED TO THE ARMS LENGTH FEE FOR THE ASSESSEE. 17. THE LD. DR RELIED UPON THE ORDER OF THE TPO AND ASSESSMENT ORDER. THE LD. DR SUBMITTED IF THE RATE HAS TO BE DETERMIN ED THE SAME SHOULD BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER/ TPO. 18. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE AS TO WHETHER CORPOR ATE GUARANTEE IS AN INTERNATIONAL TRANSACTION OR NOT IS DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL IN CASE OF FRESENIUS KABI ONCOLOGY LTD.(SU PRA). IT IS AN ADMITTED FACT THAT THE BORROWER LACKED RESOURCES AND THE CRE DIBILITY AS STANDALONE ENTITIES TO SERVICE FUNDS/ LOANS SO RAISED TO CARRY OUT BUSINESS ACTIVITIES THAT REQUIRE INTENSIVE CAPITAL OUTLAYS. THE AE WAS WITHOUT ANY CREDITWORTHINESS IN SPITE OF THE ASSETS SOUGHT TO B E BOUGHT AS THERE WERE NO FACTOR TO COMFORT THE LENDERS TO GRANT COMMERCIAL L OANS AT COMPETITIVE RATES AS HELD BY THE TPO/DRP. THUS, THE DRP WAS RIGHT IN HOLDING THAT THE SAID TRANSACTION IS INTERNATIONAL TRANSACTIONS. BUT AS R EGARDS THE RATE IS CONCERNED BY FOLLOWING THE DECISION IN CASE OF FRES ENIUS KABI ONCOLOGY LTD. (SUPRA) WE REMAND BACK THIS ISSUE TO THE FILE OF TH E ASSESSING OFFICER/TPO WITH THE DIRECTION THAT THE SAME SHOULD BE TAKEN AS 1%. THEREFORE, GROUND NO. 6 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 19. AS REGARDS GROUND NO. 11 IN RESPECT OF DISALLOW ANCE UNDER SECTION 36(1)(VA) READ WITH SECTION 2(24)(X) FOR AN AMOUNT OF RS. 9,98,57,685/-, THE LD. AR SUBMITTED THAT THE SAME IS DECIDED IN FAVOUR OF THE ASSESSEE VIDE DECISION IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08 VIDE ORDER DATED 24.07.2019 BEING ITA NO. 1905/DEL/2017. 20. THE LD. DR COULD NOT CONTROVERT THE SAME. 21. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN ASSESSMENT YEA R 2007-08 HELD AS 9 ITA NO. 7923/DEL/2018 UNDER:- 28. LASTLY TURNING TO THE GROUND NO. 4 IN ITA NO. 4781/DEL/2017, IT RELATES TO THE ADDITION OF RS. 4,85,65,343/- ON ACC OUNT OF LATE DEPOSIT OF PF. LTD. CIT(A) DELETED THE SAME BY FOLLOWING THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENTS LTD. (2007) 213 CTR (SC) 268 AND THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. 188 TAXMAN 265 (DELHI). NO FACT IS BROUGHT TO OUR NOTICE WHICH RENDERS THESE TWO DECISIONS INAPPLICAB LE TO THE FACTS OF THE CASE ON HAND ARE AS TO HOW THE LD. CIT(A) WENT WRON G IN FOLLOWING THE DECISION IN THESE 2 CASES. WE, THEREFORE, DO NOT FI ND ANY ILLEGALITY OR IRREGULARITY IN THE CONCLUSION REACHED BY THE LD. C IT(A) ON THIS ASPECT AND, THEREFORE, WHILE UPHOLDING THE SAME AND DISMISS THI S GROUND OF APPEAL. THE FACTS ARE IDENTICAL IN THE PRESENT ASSESSMENT YEAR AS WELL. THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSE SSEE AS THE SAME WAS STATUTORY PAYMENTS. THE ISSUE COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF THE TRIBUNAL FOR A.Y. 2007-08 IN ASSESSEES OWN CASE. THEREFORE GROUND NO. 11 IS ALLOWED. 22. IN RESULT APPEAL OF THE ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2019 . SD/- SD/- (R.K.PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 10/10/2019 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT 10 ITA NO. 7923/DEL/2018 ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 17 /0 9 /2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17/09/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK