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Kodak Graphic Communications India Pvt. Ltd., (now Kotak India Pvt. Ltd.) Kalyaniwalla & Mistry,Fort, Mumbai-400 001 Vs. Asst. CIT-10(1), Aayakar Bhavan, Maharshi Karve Road, Mumbai-400 020
January, 29th 2014
                    "               "   

      . . ,        ,                                       

                     ./I.T.A. No. 8710/Mum/2010
                    (   / Assessment Year: 2006-07)

Kodak Graphic Communications India                  Asst. CIT-10(1),
Pvt. Ltd., (now Kotak India Pvt. Ltd.)              Aayakar Bhavan, Maharshi Karve
Kalyaniwalla & Mistry,                     /        Road, Mumbai-400 020
Army & Navy Building, 3rd floor,           Vs.
148, Mahatma Gandhi Road,
Fort, Mumbai-400 001
     . /  . /PAN/GIR No. AABCK 1644 C
         ( /Appellant)                        :             (     / Respondent)

         / Appellant by                       :     Shri P. J. Pardiwala

           /Respondent by                     :     Shri Ajeet Kumar Jain

                         /                    :     20.01.2014
                   Date of Hearing
                                              :     20.01.2014
           Date of Pronouncement

                                     / O R D E R
Per Sanjay Arora, A. M.:

       This is an Appeal by the Assessee arising out of its assessment u/s.143(3) r.w.s.
144C of the Income Tax Act, 1961 (`the Act' hereinafter) dated 18.10.2010 for the
assessment year (A.Y.) 2006-07.

2.     Opening the arguments for and on behalf of the assessee, it was submitted by the
ld. Authorized Representative (AR), the assessee's counsel, that the appeal raises three
issues per its ten grounds, with issue 1 (per Gd. # 1 to 3) and issue 2 (per Gd. # 4 to 9),
                                                        ITA No. 8710/Mum/2010 (A.Y. 2006-07)
                                       Kodak Graphic Communications India Pvt. Ltd. vs. Asst. CIT

being squarely covered by the Tribunal's order in the assessee's own case for A.Y. 2004-
05 (in ITA No.1557/Mum/2009 dated 26.06.2003), placing a copy of the same on record.
He would then take us to the relevant parts of the said order, i.e., qua the said grounds,
being paras 15 to 20 (pgs. 6-9) and paras 40 to 49 (pgs.16-28) for the two issues
respectively. As regards the third issue, pressed vide its Ground No. 10, the same is in
respect of payment for technical and allied services, incurred in the sum of
Rs.47,61,900/-. The same has been disallowed by the Assessing Officer (A.O.) u/s.
40(a)(ia) inasmuch as there has been no deduction of tax at source. The expenditure
incurred is on the visit of specialist technical personnel from an associate enterprise (AE)
to India to support and maintain equipments supplied to customers in India, and which
includes, besides travel cost, the cost of time spent (salary costs). This was a one-time
cost, and for which the assessee has received a debit note from its AE, M/s. Kodak
Polychrome, referring to pgs.166 to 168 of the assessee's paper-book (PB).
       The ld. Departmental Representative (DR), on the other hand, would rely on the
orders of the A.O. as well as the Dispute Resolution Panel (DRP), stating them to be on
the basis of law and the facts as discerned from the material on record.

3.     We have heard the parties, and perused the material on record. We shall take up
each of the issues in seriatim.
3.1    The findings by the tribunal for A.Y. 2004-05 (supra) qua the first issue appear at
para 20 (pgs.8 & 9) of its order, clearly directing for the allowance of depreciation on the
written down value (WDV) as being carried over; the depreciation on goodwill having
been in fact allowed by the Revenue for A.Ys. 2000-01 and 2002-03, as also the
subsequent years. In view of the foregoing; there being no finding that the said asset/s has
been removed from the relevant block of assets, we have no hesitation in following the
said decision for the current year as well. Accordingly, the assessee's claim merits being
upheld. That, in fact, is also in sum and substance the finding by the DRP qua the
assessee's relevant objection (paras 5 to 9, pg.2 of its order). We decide accordingly.
                                                         ITA No. 8710/Mum/2010 (A.Y. 2006-07)
                                        Kodak Graphic Communications India Pvt. Ltd. vs. Asst. CIT

3.2    The second issue, we again find to be squarely covered by the tribunal's order for
A.Y. 2004-05; its finding appearing at para 49. The tribunal, after an at length
examination of the matter, restored the matter back to the file of the Transfer Pricing
Officer (TPO) for fresh adjudication with its directions. There being no material change
in the facts, the same shall apply for the current year as well, so that we decide likewise,
and which would also enable consistency of adjudication as well as representation both at
the end of the Revenue and the assessee. We decide accordingly.

3.3    With regard to the third issue, we firstly observe that the impugned disallowance,
as sought to be abundantly clarified per the assessment order, is not u/s. 40(a)(ia). Rather,
we find no adjustment to the returned income of Rs.702.89 lacs in respect of the said
claim; a fact which the A.O. seeks to emphasize. The assessee's grievance is, thus,
misconceived. As apparent from the assessment order, the disallowance u/s. 40(a), as
initially proposed by the A.O., was u/s. 37(1), i.e., in the absence of the requisite details,
and only alternatively, i.e., without prejudice, u/s. 40(a)(ia) (refer paras 8.1 and 8.2 of the
assessment order). Even before us the assessee, apart from a debit note, which is not
legible at all (PB pg.168), could hardly furnish any material or evidence with regard to
the rendering of the services, i.e., as was the case before the Revenue authorities. The ld.
AR also conceded before us to no material being available with the assessee to establish
the rendering of the relevant services, which though is rendered of no consequence in the
facts of the case. Under the circumstances, the assessee's grievance, as projected per its
Ground No. 10, is wholly misconceived and unmaintainable. We decide accordingly.

4.     In the result, the assessee's appeal is partly allowed.
                 Order pronounced in the open court on January 20, 2014

             Sd/-                                         Sd/-
        (I. P. Bansal)                                (Sanjay Arora)
          / Judicial Member                             / Accountant Member
 Mumbai; Dated : 20.01.2014
                                          ITA No. 8710/Mum/2010 (A.Y. 2006-07)
                         Kodak Graphic Communications India Pvt. Ltd. vs. Asst. CIT

. ../Roshani, Sr. PS

         /Copy of the Order forwarded to :
1.  / The Appellant
2.  / The Respondent
3.     () / The CIT(A)
4.      / CIT - concerned
5.             ,     ,  / DR, ITAT, Mumbai
6.     / Guard File
                                        / BY ORDER,

                                 /  (Dy./Asstt. Registrar)
                            ,  / ITAT, Mumbai
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