A company that owns its own Intellectual Property (IP) and conducts high-end Research and Development (R&D) is not functionally comparable to a routine software development service provider.

Issue

Can a diversified company that is engaged in engineering services, conducts its own R&D, and owns valuable intellectual property be considered a valid comparable in a transfer pricing analysis for a company that provides routine software development services?

Facts

The assessee was a company that provided software development services, typically operating as a low-risk service provider.
In the transfer pricing study, the tax department sought to use a certain company as a comparable for benchmarking the assessee’s profit margin.
However, this selected company was functionally very different. It was engaged in diversified engineering services, conducted its own R&D activities, and, most importantly, owned its own valuable IP in the form of its technology and brand.

Decision

The court ruled in favour of the assessee.

It held that the selected company could not be compared with the assessee.
The functional profile of a high-end, IP-owning company that invests in R&D is significantly different and carries a much higher risk profile than that of a routine contract software service provider. Therefore, they are not comparable.

Key Takeways

Functional Similarity is the Cornerstone of TP: The cornerstone of any transfer pricing comparability analysis is the “FAR” analysis (Functions performed, Assets employed, Risks assumed). A company with significant functions (like R&D), valuable assets (like IP), and high risks (like product development) cannot be compared to a low-risk service provider.
IP Ownership is a Key Differentiator: A company that owns its own valuable intangible assets (such as brands, patents, or proprietary technology) is expected to earn a different and typically higher level of profit than a contract service provider that does not own any such IP. They are not functionally comparable.

A company that has its own R&D functions and owns intangible assets is not a valid comparable for a simple service provider.

Issue

Can a company that engages in its own Research and Development (R&D) and owns its own intangible properties be used as a valid comparable for a simple service provider that does not have these complex functions or valuable assets?

Facts

The assessee was a provider of software development services, operating as a captive service provider without owning any significant intangibles of its own.
The tax department selected a company as a comparable in the transfer pricing analysis. This selected company was found to be engaged in its own R&D activities and also owned valuable intangible properties.

Decision

The court ruled in favour of the assessee.

It held that the selected company was not functionally comparable to the assessee due to the significant and fundamental differences in their business models, assets, and risk profiles.

Key Takeways

Comparing “Apples and Oranges”: Comparing a company that invests in, develops, and owns its own IP with one that simply provides services using its human capital is a classic example of comparing “apples and oranges” in transfer pricing analysis and is not permissible.
Different Risk Profiles: An R&D-focused, IP-owning company has a high-risk, high-return business profile. In contrast, a contract service provider typically has a low-risk, low-return profile. Their profit margins are not comparable.

A pharmaceutical drug discovery R&D company is not functionally comparable to a contract R&D service provider in the medical device sector.

Issue

Can a company whose R&D activities are focused on the discovery of new pharmaceutical drugs and the licensing of its own IP be considered a valid comparable for a company that provides contract R&D services for medical devices?

Facts

The assessee was a company that provided contract research and development services specifically for the medical device industry.
The tax department sought to use another company as a comparable for benchmarking.
However, this selected company was engaged in a completely different field. Its activities were purely related to the manufacturing of drugs, specifically the discovery of new drugs through its own research, and it also earned income from licensing its own intellectual property.

Decision

The court ruled in favour of the assessee.

It held that the selected company was not a valid comparable.
The functions, risks, and the specific industry of a pharmaceutical drug discovery company are significantly different from those of a contract R&D service provider that operates in the medical device sector.

Key Takeways

The Industry and Niche are Important: Even within a broad sector like “life sciences R&D,” there are very significant differences between sub-sectors like pharmaceuticals and medical devices. These differences in R&D cycles, regulatory pathways, risk profiles, and typical profit margins make them non-comparable for transfer pricing purposes.
Contract Service Provider vs. IP Owner: The assessee in this case was a contract R&D service provider, meaning it worked on projects for its clients. The selected company was an IP owner and licensor, which is a fundamentally different business model with a much higher risk and reward structure.

A double disallowance of the same item of expenditure, once by the AO and once by the assessee, is a clear error that needs to be corrected.

Issue

What is the appropriate legal remedy when a single item of expenditure has been disallowed twice—once by the Assessing Officer in the intimation order and a second time by the assessee themselves in their return of income?

Facts

The Assessing Officer (AO), in the intimation order that was passed under Section 143(1), made a disallowance for interest that the assessee had paid to entities covered under the MSMED Act.
At the same time, the assessee, likely taking a conservative position, had also disallowed the same amount of interest suo moto while filing its return of income.
This led to a situation where the same item of expenditure was effectively disallowed twice, resulting in an incorrect and inflated computation of the assessee’s taxable income.

Decision

The court remanded the matter back to the Assessing Officer.

It held that this issue of a clear double disallowance was a mistake that needed to be looked into and corrected by the AO.
The AO was directed to decide the issue afresh after reviewing the facts of the case and giving the assessee a reasonable opportunity of being heard, with the clear implication that the double disallowance should be removed.

Key Takeways

No Double Disallowance: It is a fundamental principle of tax computation that the same expense cannot be disallowed twice. A double disallowance is a mistake that is apparent from the record and must be rectified.
Remand for Correction of Obvious Errors: When a clear computational or factual error like a double disallowance is brought to the attention of an appellate authority, the standard procedure is to remand the case back to the AO with a specific direction to correct the error.

In a leasing transaction, the owner of the asset is entitled to claim depreciation, while the user of the asset is entitled to claim the rent they pay as an expense.

Issue

In a transaction involving a leased asset, who is legally entitled to claim the deduction for depreciation, and who is entitled to claim the deduction for the rental payments?

Facts

The specific facts of the dispute are not detailed in the summary, but the legal issue revolved around which party—the owner or the user of a leased asset—could claim the deductions associated with that asset.

Decision

The court ruled in favour of the assessee by clarifying the fundamental legal principle governing this issue.

It held that it is the owner of the asset (the lessor) who is entitled to the deduction for depreciation on that asset.
The user of the asset (the lessee), who pays rent for the right to use the asset, is entitled to the deduction for the rent that they pay.

Key Takeways

A Clear Division of Deductions: The Income-tax Act makes a very clear and logical distinction between the deductions that are available to the owner (the lessor) and the user (the lessee) of an asset.
Ownership is the Test for Depreciation: The primary and non-negotiable condition for claiming depreciation on an asset under Section 32 of the Act is that the assessee must be the legal and/or beneficial owner of that asset.
“Use for Business” is the Test for Rent: The primary condition for claiming lease rent as a business expenditure under Section 37(1) of the Act is that the asset must be used by the taxpayer for the purpose of their business.

IN THE ITAT KOLKATA BENCH ‘C’

Philips India Ltd.

Deputy Commissioner of Income-tax

PRADIP KUMAR CHOUBEY, Judicial Member
and Rajesh Kumar, Accountant Member

IT Appeal No.2610 (KOL) of 2024
[Assessment year 2021-22]

AUGUST 26, 2025

Ketan Ved, AR for the Appellant. Praveen Kishore, CIT DR for the Respondent.

ORDER

Rajesh Kumar, Accountant Member.- This is an appeal preferred by the assessee against the order of the AP passed after directions by ld. Dispute Resolution Panel (hereinafter referred to as the “Ld. DRP”] dated 13.09.2024 for the AY 2021-22.

2. The issue raised in ground no.1 is general in nature.

3. The issue raised in ground no.2 is in respect of transfer priding adjustment of Rs. 54,41,41,000/- on account of provision of software development services.

3.1. The facts in brief are that the assessee has been producing/doing software development and software services to its Associated Enterprises. The assessee function as captive software services center for the group and is accordingly characterized as low risk software services provider. During the year the assessee earned markup of 11.8% as has been noted by the ld. Transfer Pricing Officer on page no.192 of the Transfer Pricing order. The method applied for benchmarking these services was Transactional Net Margin Method, which was not disputed by the ld. Transfer Pricing Officer and similarly, the profit level indicator was not disputed by the ld. Transfer Pricing Officer. The ld. Counsel for the assessee submitted that the issue is squarely covered by the decision of the co-ordinate Bench in assessee’s own case for A.Y. 2020-21. The ld. Counsel for the assessee submitted that the two comparable namely; Tata Elxsi Limited (“Tata Elxsi”) and Sasken Technologies Limited (“Sasken”) as appeared in the final list of comparable considered in the final assessment order are excluded then the available margin earned by the comparable companies worked out to 11.91%. Since, the Margin of the appellant is 11.88%, which is in the permissible limit of ±3%. The ld. Counsel for the assessee therefore submitted that relying on the said order of the Tribunal these comparables may kindly be excluded.

3.2. The ld. DR on the other hand fairly agreed that the Tribunal in assessee’s own case in A.Y. 2020-21 has excluded these comparable while calculating the average margin.

3.3. After hearing the rival contentions and perusing the materials available on record, we find that the issue is squarely covered by the decision of the co-ordinate bench in assessee’s own case for A.Y. 2020-21, wherein the view has been taken by the co-ordinate Bench holding that these two comparable i.e. Tata Elxsi Limited (“Tata Elxsi”) and Sasken Technologies Limited (“Sasken”) be excluded while calculating the average margin earned by the comparables The operative part of the decision in Philips India Ltd. v. Dy. CIT 340 (Kol-Trib.)/ITA No. 1960/KOL/2024 for A.Y. 2020-21 is extracted below: –

“07. After hearing the rival contentions and perusing the materials available on record, we find that there are two comparables namely Tata Elexi Limited, which has the Profit Level Indicator of 28.02% and Sasken Technologies Ltd., which have profit level indicator at 17.20%. The counsel of the assessee argued in detail as to why Tata Elxsi ltd is not comparable to the assessee as has been held in the f9ollowing decisions:

Wipro GE Healthcare (P.) Ltd. v. ACIT 97 (Bangalore – Trib.)[17-05-2023]

ii.

Infineon Technologies India (P.) Ltd. v. Deputy Commissioner of Income-tax 245 (Bangalore – Trib.)[10-01-2024]

iii.

Mavenir Systems (P.) Ltd. v. Deputy Commissioner of Income Tax 655 (Bangalore – Trib.)[23-03-2023]

iv.

Infor (India) (P.) Ltd. v. Assistant Commissioner of Income-tax 68 (Hyderabad – Trib.)[25-08-2022]

08. Similar in the case of Sasken Technologies Ltd., the assessee submitted that the same should not be considered as comparable for the following reasons:

“Functionally not comparable – Sasken is engaged in providing diversified services such as product engineering and digital transformation providing concept-to-market, chip-to-cognition R&D services.

Engaged in R&D activities and owns intangible property The company is consistently investing in technology and innovation. During the year, the company has invested to explore the emerging technologies such as computer vision, artificial intelligence, machine learning, blockchain etc. Further, company owns intangible assets in the nature of computer software, unlike the Appellant who does not own any such intangibles.

Lack of segmental information No separate data that provides segment wise breakup and revenue from software development services available [Refer page No. 7732 of the Paperbook-Part 11 of 11 and page no. 112 of the annual report

Judicial precedence:

Mavenir Systems (P.) Ltd. 655 (Bangalore – Trib.) [AY 2017-18]

The Hon’ble ITAT has held that the said company cannot be considered as a comparable for benchmarking transaction in the software development segment due to the reasons identical to those raised by the Appellant before the lower authorities viz. this company is involved in R&D activities and own huge patents which is not akin to a captive service provider.

Prayer:

In view of the foregoing, we have to request the Bench to direct the TPO to exclude the aforementioned companies from the list of comparable.

On exclusion of the aforesaid companies, the average margin earned by the comparable companies will work out to be 11.66%, accordingly, the margin of the Appellant i.e. 9.94% [refer page no. 40 of TP order falls within +/-three percent. Accordingly, there would be no transfer pricing adjustment worked out as under:

We note that the Tata Elexi is engaged in diversified and engineering services to the consumer electronics, broadcast and communications, transport, visualization, provide system integration and support services for enterprise customers unlike business operation of the software development segment of the assessee wherein it is engaged in providing results, information, etc. relevant to the business of the Associated Enterprises generated from such software development activities. We note that the same is not functionlly comparable. The said comparable undertakes R&D activities and own the intellectual property in the form of technology and brand and thus cannot be compared with the assessee. The case of the assessee find support from the case of the Wipro GE Healthcare (P.) Ltd. v. ACIT (supra). Similarly, we note that the second comparable taken by the AO post Dispute Resolution Panel order i.e. Sasken Technologies Limited is also not comparable to the assessee for the reason that the same is not functionally comparable and is engaged in the R&D activities and owns intangible properties which is not there in the case of the assessee. Moreover, the comparable lacks, the segmental information. The case find support from the decision of Mavenir Systems (P.) Ltd. v. DCIT (supra), wherein the Hon’ble ITAT has held that the company is not functionally comparable due to its having R&D activities and own huge patents which is not akin to captive service provider and the relevant paras no. 4.4 to 6.3 of the same are extracted below:-

“4.4 Sasken Communication Technologies Ltd.

4. 4.1 It is submitted that this comparable has been excluded by the Ld.TPO as it is involved in R&D activities and owns huge patents. We have hereinabove excluded Infosys Ltd., L&T Infotech Ltd. for the reason that they are into research and development activities and owns huge intangibles which is not akin to a captive service provider. Applying the same principle, we do not find any infirmity in exclusion of Sasken Communication Technologies Ltd. by the Ld.TPO.

Accordingly, we reject this comparable sought for exclusion by assessee.

Accordingly ground no. 1.6 raised by assessee stands partly allowed.

5. Ground no. 1.7 has been raised by assessee seeking the correction in the margins of the comparable companies. It is submitted that assessee has filed all the relevant details in respect of the comparables that needs to be verified by the Ld.TPO/AO.

We thus direct the Ld.AO/TPO to recompute the margins in accordance with law.

Accordingly this ground stands allowed for statistical purposes.

6. Ground no. 2 is related to the transfer pricing adjustment with respect to outstanding receivables. Primarily the Ld.AR has objected by submitting that no interest is attributable as the same was not charged by the AEs on any delayed payment by the assessee. However, assessee submitted that only two invoices payment were delayed to be paid by the AE with respect to 15 days and one day. In any event, if at all any interest is to be computed, LIBOR rate is to be applied as submitted by the Ld.AR. The Ld.DR relied on the order passed by authorities below.

We have perused the submissions advanced by both sides in the light of records placed before us.

Admittedly attributing interest to the delayed payment is an international transaction.

6.1 The Ld.AR submitted that the Ld.TPO proposed transfer pricing adjustment in respect of outstanding receivables in respect of trade creditors being the AEs by using 6 months LIBOR rate and CUP as the most appropriate method. The Ld.TPO thus proposed adjustment at 5.8749% amounting to Rs. 3,37,183/-.

6.2 The Assessee wishes to submit that the delayed/outstanding receivables should not be considered as a separate international transaction. Further, it is humbly submitted that determination of ALP in respect of delayed receivables from inter-company transactions is not required since ALP of inter-company transactions of provision of services has been already determined and no separate adjustment is necessary in this regard.

6.3 The Ld.AR placed reliance on decision of Hon’ble Delhi Tribunal in Kusum Healthcare (P). Ltd v. Asstt. CIT 79 deleted addition by considering the above principle, and subsequently Hon’ble Delhi High Court in Pr. CIT v. Kusum Health Care (P.) Ltd 431/[2017] 398 ITR 66, held that, no interest could have been charged as it cannot be considered as international transaction. He also placed reliance upon decision of Hon’ble Delhi Tribunal in case of Bechtel India (P.) Ltd. v. Dy. CIT 6 which subsequently upheld by Hon’ble Delhi High Court vide order dated 21/07/16 in ITA No. 379/2016, also upheld by Hon’ble Supreme Court vide order dated 21/07/17, in CC No. 4956/2017.”

010. We note that in case both the above comparables are excluded out of the comparable companies, the average mean of the comparable companies will work out to 11.66%, whereas the margin of the appellant is 9.44% which falls within 3% and therefore, no TP adjustment is required to be made. Accordingly, we direct the ld. Transfer Pricing Officer/ AO to exclude these two companies. The ground no.2 is allowed.”

3.4. Consequently, respectfully following the decision of the coordinate Bench in assessee’s own case for A.Y. 2020-21, we direct the ld. AO / Transfer Pricing Officer to exclude these two comparables while working out the average margin of comparable. We also note that after exclusion of these two comparables, the margin of the assessee is 11.88% and is within the permissible of ±3%. Accordingly, the ground no.2 is allowed.

4. The issue raised in ground no.3 is in respect of transfer pricing adjustment of Rs. 108,79,48,589/- on account of Intra Group Services (IGS) received by the assessee.

4.1. At the outset, the ld. Counsel for the assessee submitted that the issue has been decided in assessee’s own case for A.Y. 2009-10 to 2016-17 and 2020-21. Since, the facts of the case in the current assessment year are same, therefore, the ground may be allowed by following the decision of the co-ordinate Bench in the preceding and succeeding assessment years.

4.2. The ld. DR per contra fairly agreed that the issue has been decided by the co-ordinate bench in favour of the assessee.

4.3. After hearing the rival contentions and perusing the materials available on record, we find that the issue is squarely covered by the co-ordinate bench in ITA no. 1960/Kol/2024 for A.Y. 2020-21, vide para no.11 and 12 deciding in favour of the assessee. For the sake of ready reference, we extract the para as under: –

“011. The issue raised in ground no.3 is against the transfer pricing adjustment of Rs.108,79,48,589/- on account of Intra Group Services (‘IGS’) received by the assessee.

012. We note that this is a recurring issue in the case of the assessee which has been decided by the co-ordinate Bench in favour of the assessee in ITA No. 226/KOL/2021, vide order dated 06.09.2022 for A.Y. 2016-17. The operative part of the decision is as under:-

“3. Issue raised in ground no. 2 is against the direction of DRP on determination of arms’ length price in respect thereof for intra group services received by the appellant assessee.

4. The Ld. Counsel for the assessee at the outset submitted that the issue is recurring one right from A.Y.2009-10 to 2015-16 and is covered in favour of the assessee by the decisions of the Co-ordinate Benches of the Tribunal deciding the issue in favour of the assessee in all the assessment years. The Ld. A.R took the Bench through the decisions attached in the Paper book and prayed that the ground may be allowed following the said decisions of the Co-ordinate Bench in the assessee’s own case.

5. The Ld. D.R. on the other hand fairly agreed that the issue is squarely covered by the decisions of Co-ordinate Benches in assessee’s own case however relied on the order of DRP.

6. Having heard rival submissions and perusing the material on record including the decisions of the coordinate benches in assessee’s own case in the earlier assessment years, we find that the issue is squarely covered in favour of the assessee. Therefore, taking a consistent view, we allow ground no. 2 by setting aside the direction of the DRP and directing the TPO/AO to delete the adjustment/addition.”

013. Accordingly, we direct the ld. AO to delete the addition by respectfully following the decision of the co-ordinate Bench in A.Y. 2016-17. The ground no.3 is allowed.”

4.4. Respectfully following the decisions of the coordinate benches in assessee own cases, we direct the ld. AO/ Transfer Pricing Officer to delete the adjustment/ addition.

5. The issue raised in ground No.4 is in respect of transfer pricing adjustment of Rs. 94,41,22,563/- towards alleged advertisement, marketing and promotion (AMP) expenses.

5.1. After hearing the rival contentions and perusing the materials available on record, we find that the issue is squarely covered by the decision of the co-ordinate Bench in assessee’s own case for A.Y. 2010-11 to 2016-17 and A.Y. 2020-21. For the sake of ready reference we extract the operative part of the decision in ITA No. 1960/KOL/2024 for A.Y. 2020-21 as under: –

“014. Ground no. 4, is against the transfer pricing adjustment of ₹94,41,22,563/- on account of advertisement, marketing and promotion expenses. is against the transfer pricing adjustment of Rs. 94,41,22,563/- on account of advertisement, marketing and promotion expenses.

015. We note that the impugned issue is recurring one and has been decided by the co-ordinate Bench in assessee’s own case for A.Y. 2010-11 to 2016-17. The operative part of the decision in ITA No. 226/KOL/2021 for A.Y. 2016-17 is extracted below:-

“7. Issue raised in ground no. 3 is in respect of determination of arm’s length price and an adjustment made on account thereof towards advertisement, marketing and promotion expenses.

8. Having heard rival submission and perusing the material on record we find that issue is squarely covered by the decisions of the Co-ordinate Benches in earlier assessment years in assessee’s own case from AY 2010-11 to 2015-16. Accordingly we set aside the DRP direction on this issue and direct the AO/TPO to delete the adjustment made and consequently ground no. 3 is allowed.”

016. Considering the facts of the instant assessment year being similar to ones as decided by the co-ordinate Bench in assessee’s own case, we hold that the advertisement, marketing and promotion expenses do not an international transaction and accordingly, the TP adjustment made by the ld. Transfer Pricing Officer/ AO is directed to be deleted. The ground is accordingly allowed.”

5.2. Consequently, AO/TP adjustment by the Transfer Pricing Officer, is deleted.

6. The issue raised in ground no.5 is in respect of consistency and general in nature.

7. The issue raised in ground no.6 is in respect of transfer pricing adjustment of Rs. 16,67,57,000/- on account of provision of contract research and development services.

7.1. The facts in brief are that the assessee is engaged in providing the contract research and development services to its Associated Enterprises based on specification provided by the Associated Enterprises and the assessee is compensated for services on cost plus markup of 9.22% of the service agreement. We note that the ld. AO /Transfer Pricing Officer computed the margin of 18.66% by taking six comparables and if we exclude the non-comparable company namely; Aurigene Discovery Technologies Ltd. then the average margin would come to 3.36 which is much lower than the appellate margin of 9.22%. We note that the issue is squarely covered by the decision of the co-ordinate Bench in assessee’s own case for A.Y. 2020-21 in ITA No. 1960/KOL/2024 vide order dated 11.03.2025 by Para no.11, wherein the issue has been decided in favour of the assessee. For the sake of ready reference the relevant extract is given below: –

“022. We have considered the submissions of both the parties. The assessee admittedly, doing contract, research and development for medical devices. ADTL, as has been mentioned in its Annual Report is undertaking research relating to contract discovery for its customers and licensing of the intellectual property rights in respect of researched drug discovery. This has nothing to do with any activity which is software related. The activities are purely related to the manufacturing of drugs more specifically, the discovery of new drugs through research and development. It,admittedly, is not a comparable with the assessee in regard to the functionality. Coming to TCG, it is noticed that TCG is also into early drug discovery and development, which has been, mentioned earlier cannot be considered as the same as a research and development in respect of medical devices. Further, in the case of TCG, the revenue generated from the sale of products are admittedly 80% of the total revenue of TCG which also makes it incomparable with the assessee in so far as the supplemental profit and loss in respect of the research and development activity of TCG are not available. Consequently, we are of the view that both ADTL and TCG cannot be taken as a comparable while computing the transfer pricing adjustment in regard to the contract, research and development services. The said two companies are excluded. Admittedly, the average comes to only 10.52% which is well within the 3% margin which is permissible. Consequently, the addition made on account of the said transfer pricing adjustment stands deleted. Consequently, ground nos. 6 the assessee’s appeal stand allowed.”

7.2. We therefore respectfully following the decision of the coordinate bench direct the ld. AO/ Transfer Pricing Officer to exclude the comparable in the case of Aurigene Discovery Technologies Ltd. Accordingly, the ground no.6 is allowed.

8. The issue raised in grounds no.7 and 8 is in respect of double disallowance of interest paid to MSMED of Rs. 55,226/- and double addition of deemed income u/s 41(1) of the Act of Rs. 70,66,297/-.

8.1. After hearing the rival contentions and perusing the materials available and after examining the order dated 23.10.2024, we find that the said interest has been disallowed by the ld. AO in the intimation order passed u/s 143(1) of the Act dated 20^th October, 2022. Since the assessee disallowed the said interest suo moto while filing the return of income resulting into double disallowance. Similar is the position with regard to deemed income u/s 41(1). Therefore, the issue needs to be looked into at the end of the ld. AO and accordingly, we restore the issue to the file of the ld. AO to decide the same afresh after looking into the facts and also after affording reasonable opportunity of hearing to the assessee. The grounds are allowed for statiticsl purpose.

9. The issue raised in ground no.9 is against the disallowance of leased rental of Rs. 86,47,48,620/-.

9.1. The facts in brief are that the ld. AO disallowed the leased rental paid by the assessee in respect of assets taken on finance lease amounting to Rs. 86,47,48,620/- on the sole contention that the same was disallowed by the Dispute Resolution Panel in the case of the assessee for A.Y. 2013-14 and 2014-15. We note that the issue has been decided by the co-ordinate bench in assessee’s own case from A.Y. 2009-10 to 2020-21, by holding that the owner of the assets is entitled to deduction of depreciation and user of asset is entitled to deduction of rent. The operative part of the decision in A.Y. 2020-21 is extracted below: –

“029. The issue raised in ground no.9 is against the disallowance of lease rental of Rs. 62,13,65,603/-.

030. The facts in brief are that in the computation of income, the assessee has claimed deduction of Rs. 62,13,65,603/- on account of lease rental of the assets taken on financial lease. The ld. AO accordingly called upon the assessee to file his submission which was filed on 13.01.2022, in which he submitted that the depreciation claimed on the assets taken on lease has been added back while computing the total income and the assessee has correspondingly claimed lease rental from income excluding the interest as allowable deduction while computing the total income. The submission of the assessee did not find in favour of the ld. AO and he added the same to the income of the assessee which was confirmed by the ld. Dispute Resolution Panel.

031. After hearing the rival contentions and perusing the materials available on record, we find that the issue is squarely covered by the decision of the co-ordinate Bench in assessee ‘s own case from AO 200-10 to 2016-17, which are already available in the Paper Book. Accordingly, we set aside the ld. Dispute Resolution Panel direction and direct the ld. AO to delete the addition. Accordingly, the ground no.9 is allowed.”

9.2. Accordingly, we set aside direction of the ld. Dispute Resolution Panel and direct the ld. AO to delete the addition.

10. The issue raised in ground no.10 and 11 is against the wrong levy of interest u/s 234A and 234B of the Income-tax Act, 1961 (the Act).

11. After hearing the rival contentions and perusing the materials available on record, we are of the view that the issue is required to be examined at the end of the ld. AO and accordingly, we restore the same to the file of the ld. AO with a direction to decide the same afresh as per law by considering the submission of the assessee that the return of income was filed on 4^th March, 2022, which is within extended the due date of fling the return of income. The grounds are allowed for statistical purpose.

12. The issue raised in ground no.14, is against the short granting of TDS/ TCS credit to the tune of Rs. 3,73,374/-.

13. After hearing the rival contentions and perusing the facts on record we are of the view that the issue needs to examine at the end of the ld. AO and accordingly, we direct the ld. AO to decide the same afresh after looking into the facts available on record and after affording reasonable opportunity of hearing to the assessee. The ground is allowed for statistical purpose.

14. In the result, the appeal of the assessee is partly allowed for statistical purposes.