Income Tax Appellate Tribunal Delhi M/S. Nokia Siemens Networks Pvt. Ltd., ... vs Acit, New Delhi on 16 February, 2018 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCHES: "I 1" NEW DELHI ] BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER. I. T. Appeal No. 333/Del/2013 Assessment Year : 200809 M/s Nokia Siemens Networks India, Asstt. Commissioner of Incometax 7th floor Building No.9A, vs Circle 13(1), New Delhi. Cyber City, Sector 25A, Gurgaon. PAN : AABCS9839H (Appellant) (Respondent) Assessee by : Shri Deepak Chopra, Smt. Rashmi Chopra S/sh. Amit Srivastava, Harpreet Ajmani, Ankur Goyal Department by : Shri Kumar Pranav, Sr. DR Date of Hearing : 01.02.2018 Date of Pronouncement : .02.2018 ORDER PER K. NARASIMHA CHARY, J. M. : Aggrieved by the assessment order dated 30.11.2012 read with the directions dated 27.9.2012 issued by the Dispute Resolution Panel II, New Delhi (for short called "learned DRP), assessee preferred this appeal. 2. Brief facts of the case are that the assessee is in the business of manufacturing and trading of telecommunication network equipment and 2 network design, installation and commissioning. The assessee is also providing support services to major telecom and IT service providers besides developing telecom software. For the assessment year 200809, the assessee filed their return of income on 30.9.2008 declaring a total income of Rs.47,08,17,570/. The case was selected for scrutiny. Matter was referred to the Ld. TPO for determination of the Armed Length Price of the International Transaction, and the Learned TPO by order dated 31.10.2011 determined a sum of Rs.38,36,90,639/ as the transfer pricing adjustment u/s 92CA basing on which the learned AO made an addition to that effect. Besides this, learned AO made the following additions also: Disallowance of claim of exemption u/s 10AA to the extent of Rs.15,93,92,715/ Disallowance of excess depreciation claimed on UPS Rs.1,44,75,008 Disallowance of employees contribution to Provident Fund Rs.19,25,243/ Disallowance of TDS recoverable written off Rs.2,83,86,834/ Disallowance of penalty expenses Rs.4000/ Disallowance u/s 40(a)(i) Rs.6,91,99,702/ 3. Assessee carried the matter before the learned DRP. In respect of transfer pricing adjustment, learned DRP excluded one M/s Cybermet Infotech Ltd. from the set of comparables due to which the transfer pricing adjustment had come down to Rs.31,77,69,775/. In respect of additions on account of corporate issues, learned DRP sustained the addition to the tune of Rs.13,06,80,262/. Learned AO completed the assessment by making an addition of Rs.31,77,79,775/ on account of transfer pricing adjustment and a sum of Rs.13,06,82,262/ on account of corporate tax disallowance and concluded the assessment at Rs.91,92,67,610/. Challenging this, the assessee is in appeal before us. 3 4. Ground No.1 is general in nature. Ground No.2 to 2.1 relate to the depreciation on computer peripherals. Ground No.3 and 3.1 relate to the disallowance of TDS receivables written off, Ground No.4 to 4.2 relate to the apportionment of common expenses to unit claiming benefit under section 10A of the Act. Ground No.5 to 5.4 relate to the disallowance under section 40(a)(i) whereas Ground Nos. 6 to 7.6 relate to the transfer pricing issues. Ground No.7.7 and 7.8 are not pressed, Ground No.8 in relation of the initiating penalty proceedings under section271(1)(c) of the Act is premature and Ground No.9 on the aspect of levy of interest under section 234B and 234D of the Act and withdrawing interest under section 244A(3) of the Act is consequential in nature. Now we shall proceed to adjudicate these aspects. 5. Coming to Ground No 2 and 2.1, relating to the depreciation on computer peripherals, assessee claimed depreciation on the equipment like UPS, stabilizer, LAN/WAN, catalyst switches, network switches etc. at 60%. However, learned AO disallowed such a claim to an extent of Rs.1,44,75,008/ on the ground that they form part of the block of assets under plant and machinery, in respect of which depreciation is allowed only at 15%. Basing on the decision of the Hon'ble juris