Pr. Commissioner Of Income Tax- 2 v. Schneider Electric India Pvt. Ltd.through:mr. Prakash Kumar, Advocate

$~1 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA No. 713/2017 PR. COMMISSIONER OF INCOME TAX- 2..... AppellantThrough:Mr. Zoheb Hossain, Senior StandingCounsel. versus SCHNEIDER ELECTRIC INDIA PVT. LTD.Through:Mr. Prakash Kumar, Advocate. ..... Respondent CORAM:JUSTICE S. MURALIDHARJUSTICE PRATHIBA M. SINGH O R D E R07.09.2017 % C.M. APPL. 31646/2017 (delay in filing) 1. For the reasons stated in the application, the delay in filing the appeal iscondoned. The application stands disposed of. -C.M. APPL. 31647/2017 (delay in refiling) 2. For the reasons stated in the application, the delay in re-filing the appealis condoned. The application stands disposed of. ITA No. 713/2017 3. This is an appeal under Section 260A of the Income Tax Act, 1961(‘Act’) by the Revenue against the order dated 29[th]September 2016 passedby the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 937/Del/2014for the Assessment Year (‘AY’) 2009-10. ITA 713/2017 Page 1 of 3 4. The following two questions have been urged by the Revenue in thisappeal:appeal: “A. Whether on the facts and circumstances of the case,the Ld. IT A was justified in directing the TPO to takeForex gain/loss as operating in nature without discussingthe FAR of the comparables and assessee as well?the Ld. IT A was justified in directing the TPO to takeForex gain/loss as operating in nature without discussingthe FAR of the comparables and assessee as well? B. Whether the Ld. ITAT has erred in law by settingaside the disallowance made by the AO on not allowingthe expenditure on license and permits to be deducted asRevenue expenditure in the previous year?” 5. As far as Question A is concerned, the Court finds that the ITAT hasdiscussed in detail the factual position regarding the sharp depreciation ofthe Indian Rupee (‘INR’) against the Euro (‘EUR’) by about 16% in a shortspan of 6 months, i.e. from February, 2008 to July, 2008. This called foradjustments to be carried out in accordance with the Transfer Pricingregulations so as to eliminate differences between international transactionsinvolving comparable companies and that entered into by the Assessee. 6. Having perused the impugned order of the ITAT, this Court is of the viewthat, in the facts and circumstances of the case, the view taken by the ITATis a plausible one and does not call for any interference. However, questionA is left open for consideration in an appropriate case. 7. As far as Question B is concerned, the ITAT notes that the AssessingOfficer (‘AO’) disallowed 3/4[th]of the ‘Licenses and Permits’ expenditure,amounting to Rs. 1,69,93,222/-, on the ground that the same would lead to ITA 713/2017 Page 2 of 3 an enduring benefit accruing to the Assessee Company and thus, is in thenature of deferred revenue expenditure. This appears to be based on the ipsedixit of the AO and not on the basis of facts. The ITAT took the view thatthe expenditure incurred on account of ‘Licenses and Permits’ was in thenature of revenue expenditure and therefore, cannot be deferred. This too isa plausible view to take in the facts and circumstances of the case. 8. Question B too is left open for consideration in an appropriate case. 9. The appeal is accordingly dismissed. S. MURALIDHAR, J. SEPTEMBER 07, 2017dk PRATHIBA M. SINGH, J.