DEVELOPMENT CONSULTANTS PVT LTD Vs. DCIT
INCOME TAX APPELLATE TRIBUNAL
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K.S. Prasad Rao, J.M. -
(1.) THE above two appeals are filed by the assessee having been aggrieved by the order of the ld. CIT(A)-XL, Kolkata dated 12.12.2007 relating to assessment years 2003-04 and 2004-05 respectively in the case of the assessee.
(2.) Since the issues involved in these appeals are identical we have decided the same by this common consolidated order for the sake of convenience.
We first take up the ITA NO.79/Kol/2008 wherein the assessee has raised the following grounds:
1. For that on the fact and in the circumstances the ld. CIT(A) was wrong in sustaining addition under Section 43B and Section 36(i)(v)(a) of the Act on account of Provident Fund contribution towards.
Aggregating to Rs. 1,29,13,290 together with arithmetical mistake in disallowance to the extent of Rs. 4,08,181 and thereby total disallowance sustained was Rs. 1,33,21,471/-(Rs. 1,29,13,290 + 4,08,181).
2. For that on the fact and circumstances the ld. CIT(A) wrongly and arbitrarily disallowed payment of Rs,67,77.210/- to the approved gratuity fund.
3. (a) That on the facts and in the circumstances of the case, the ld CIT(A) erred in confirming the adjustments of Rs 8,44,78,673/-to the international transactions of the appellant with its Associated Enterprises (AE), namely Development Consultant International Ltd. (Bahamas). The Kulijan Corporation (USA) and Datacore Systems Inc. (USA), without considering the written submissions and the financial of the Associated Enterprises explaining the facts of the case preferred before the ld. CIT(A).
(b) That on the facts and in the circumstances of the case, the ld. CIT(A) erred in holding in principle that 'No matter which method is adopted, if the facts are in order, we should arrive at the same amount of adjustment', which cannot be achieved with the various prescribed methods.
(3.) WITHOUT prejudice to ground (3) above, in the event Your Honours are of the view that the ld. CIT(A) was right in confirming the adjustment, even assuming but not admitting, the ld. CIT(A) erred in not considering the fact that the maximum amount of adjustment to the price of international transaction of the appellant, would be limited to the gross profit earned by Development Consultant International Ltd., Bahamas and accordingly should have restricted the amount of adjustment in the international transaction of the appellant with Development Consultant Ltd., Bahamas to USD 4,61,174 i.e. INR 2,07,52,830/-.;
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