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Showing contexts for: qualcomm in Qualcomm India Pvt. Ltd. , New Delhi vs Acit, New Delhi on 17 June, 2022Matching Fragments
Through the present Stay Application, the assessee is seeking stay against the aggregate outstanding demand of Rs.118,77,61,769/- for A.Y. 2016-17.
2S.A.No.165/Del./2022 M/s. Qualcomm India Private Limited, New Delhi.
2. Assessee had filed its return of income for A.Y. 2016- 17 on 26.11.2016 declaring total income of Rs.433,65,84,030/-. In the final assessment order passed u/s 143(3) r.w.s 144C(13) and 144C(13) r.w.s 143(3A) & 143(3B) of the Act vide order dated 30.03.2021, the total income of the assessee was determined at Rs.955,99,15,840/-. Thereafter, rectification order was passed u/s 154 r.w.s 143(3) of the Act vide order dated 16.08.2021 and the total income after rectification was determined at Rs.653,75,25,701/-, taxes thereon was determined at Rs.2,68,85,66,774/- (including interest) and after adjusting for the taxes paid total net outstanding tax demand including interest was determined at Rs.1,18,77,61,770/-. Aggrieved by the aforesaid order, assessee filed an appeal before the Tribunal.
3. Before us, Learned AR submitted that the impugned demand arises mainly out of the following additions:
(i). Transfer Pricing additions : 2,42,30,557/-
(ii). Disallowance of CDP (Chipset : 217,67,11,114/-
Development Platform) and MTP (Modem Test Platform) expense
4. With respect to the Transfer Pricing Additions : He submitted that TPO had erroneously considered increased markup of BSS and TSS segments, thereby increasing the S.A.No.165/Del./2022 M/s. Qualcomm India Private Limited, New Delhi.
taxable income of the assessee. He submitted that there was a strong arguable case by the assessee.
5. With respect to the disallowance of CDP and MTP expenses : He submitted that assessee had considered it to be Revenue expenditure but AO had reclassified it to be a capital expenditure and had allowed depreciation on the same @ 40%. He submitted that CDP/MTP equipment fail the enduring benefit test and functional test, as these are testing equipment which are used to test the software that are developed by the company and it gets replaced within a span of 6-8 months and therefore the assessee had correctly characterized it to be a Revenue expenditure. He further submitted that no adjustment in A.Y. 2017-18 was made by the Revenue on this account and had accepted the submissions of the assessee. He further submitted that though not accepted by assessee but for a moment, the Revenue's contention of the expenditure being capital in nature is accepted, then the rate of depreciation applicable on computers as per the provisions of the Act is @ 60% instead of 40% allowed by Revenue. He further submitted that the AO in the remand report had allowed the depreciation @40% instead of 60%. He therefore submitted that if the depreciation rate of 60% of depreciation is allowed, the total tax liability would work out to Rs.240,29,23,198/- and after the amount of credit of the S.A.No.165/Del./2022 M/s. Qualcomm India Private Limited, New Delhi.
S.A.No.165/Del./2022 M/s. Qualcomm India Private Limited, New Delhi.
ii. The assessee shall furnish proof of deposit of tax as directed in (i) above at the time of hearing of appeal.
iii. That an early hearing of the appeal is hereby granted and it is fixed on 04.08.2022. Since the date of hearing of appeal has been pronounced in the open court and to which both the parties have agreed, no separate notice of hearing is therefore required to be issued by Registry.