expenditure. It was on record that the expenditure
incurred on GDR issue was Rs.8.34 crores and the assessee had not
claimed the same ... further referred to the stipulation, contained in the document prepared
for GDR ISSUE wherein it explained as under:
"CAPITAL EXPANSION:
Arvind
views of the Assessing Officer and not
appreciating that the GDR issue made by the appellant was
mainly for the purpose of capital expenditure ... projects, the
appellant had temporarily deployed part of proceeds of GDR
issue in the units of UTI.
[11.1] In law and in the facts
nature of quasi capital and further the
entire proceeds of the GDR issue have been invested in the aforesaid
subsidiary and accordingly no addition ... Assessing Officer on account of disallowance
1/5th of GDR issue expenses claimed by the company as allowable
deduction
respect of disallowance of GDR issue
expenses of Rs. 15,02,592/- without proper consideration and appreciation of the facts
of the case and submission ... respect of the said
disallowance of Rs. 15,02,592/- for GDR Issue expenses requires to be
quashed/cancelled.
3. The learned
account of
disallowance of 1/5th of GDR Issue expenses claimed by th e
company as allowable deduction ... assessee has incurred expenses of Rs
75,12,960 on GDR issue and the treated the same as preliminary expenses
eligible for amortization under section
account of disallowance of 1/5th of
GDR Issue expenses claimed by the company as allowable deduction ... assessee has incurred expenses of Rs 75,12,960 on GDR issue and the treated
the same as preliminary expenses eligible for amortization under section
International
Transaction
Disallowance 15,02,592 Yes Confirmed Confirmed the
of GDR issue the addition CIT(A) decision
Disallowance 3,15,333 Yes Issue
issues which was
only one part and has remained silent on the issue of adjustment made in international
transaction disallowance of GDR and disallowance ... addition relating to adjustment made in international
transaction disallowance of GDR issues but the assessee has not
contested the issue related to the disallowance
clarified that the first case decided by Honourable
ITAT, Mumbai on the issue of meaning of word 'made available' in
the case ... were followed without
differentiating one time service i.e. service for issue of GDR or long
term service contracts like in the present case
been placed on the fact that the loan was out of the GDR
funds, and, for this reason, the interest free loan was justified ... this explanation either. Even when the loan is given out of the
GDR funds held abroad, the arm's length price of the loan
