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2022 (6) TMI 1299 - ITAT BANGALORETP Adjustment - comparable selection - HELD THAT:- Assessee is found to be engaged in the business of designing, developing and manufacturing data storage solutions in a variety of form factors using their flash memory, proprietary controller and firmware technologies, thus companies functionally dissimar with that of assessee need to be deselected. Companies deselected having more than 25% being the threshold limit considered by the Ld.TPO. Working Capital Adjustment not granted to the assessee - After considering the submissions by both sides, we direct the Ld.AO/TPO to compute the Working Capital Adjustment on actuals in order to determine the arms length price of the transaction. Adjustment in respect of interest paid by assessee on ECB loan provided by the AE - AR submitted that the TPO himself accepts that assessee has paid the interest to its AE between 4.5 and 4.8% whereas the RBI rate was determined to be six months LIBOR + 500 basis points - HELD THAT:- We note that the Ld.TPO has carried out fresh benchmarking analysis without following the principles laid down by Hon'ble Delhi High Court in case of CIT vs. Cotton Naturals (I) Pvt. Ltd. [2015 (3) TMI 1031 - DELHI HIGH COURT] We direct the Ld.TPO to follow the principles laid down by this Tribunal in case of Cotton Naturals (supra), having referred to the rate applied by the assessee being within threshold limit as per the RBI Circular No. 12/2015-16 dated 01/07/2015 on ECB. Accordingly, this ground raised by assessee stands allowed for statistical purposes. Recharacterising assessee as an agent under the marketing support service segment - HELD THAT:- TPO carried out recharacterisation of assessee without understanding the functions performed by the assessee under the marking support service segment. We are therefore of the opinion that this issue needs to be verified by the Ld.AO/TPO denovo. Assessee is directed to file all relevant information in support of its contention which shall be verified and considered by the Ld.AO/TPO in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee. Depreciation on the capital asset that was received from the AE - HELD THAT:- We therefore direct the Ld.AO to grant depreciation to the assets that stand capitalised by the Ld.AO in accordance with law. Disallowance of salaries paid and reimbursement of expenses made towards seconded employees - HELD THAT:- We note that the evidences filed by assessee has not been considered by the revenue authorities. We therefore remand this issue to the Ld.AO to consider the claim in accordance with the decision of Coordinate Bench of this Tribunal in the above referred cases M/s. Toyota Boshoku Automotive India Pvt. Ltd. [2022 (4) TMI 1443 - ITAT BANGALORE] and Goldman Sachs Services Pvt. Ltd. [2022 (4) TMI 1444 - ITAT BANGALORE].having regard to the evidences filed by the assessee. Needless to say that proper opportunity of being heard must be granted to assessee in accordance with law. Disallowance of bonding and debonding charges - claim disallowed for not furnishing the evidences as has been observed by the DRP - as submitted that assessee may be alternatively granted depreciation on the assets - HELD THAT:- We note that the bonding and debonding expenses have been incurred by assessee in respect of capital asset. Assessee is seeking depreciation on such charges as the same were disallowed u/s. 37 of the Act. The assessee has not filed any evidences in support of its claim however the Ld.AR has submitted that assessee may be provided an opportunity to substantiate the claim. We accordingly remand this issue to the Ld.AO to verify the evidences if any filed by the assessee and to consider the alternate claim of deprecation in accordance with law.
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