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2022 (12) TMI 1412 - ITAT BANGALORETP adjustment - Exclusion of subcontracting charges - determination of net cost margin excluding the sub-contract charges is decided against the assessee by coordinate bench of this Tribunal in assessee's own case for the AY 2011-12 [2016 (9) TMI 1458 - ITAT BANGALORE]. Comparable selection - directions to the AO/TPO to apply 15% RPT filter - We direct exclusion of Larsen & Tubro Ltd., Persistant systems Ltd., RS Software (India) Ltd., and Infosys Ltd., from the final list. Interest on receivables - TPO proposed transfer pricing adjustment in respect of outstanding receivables in respect of trade creditors being the AEs by using 6 months LIBOR + 450 basis points and CUP as the most appropriate method - HELD THAT:- This Bench referred to decision of Special Bench of this Tribunal in case Instrumentation Corpn. Ltd. [2016 (7) TMI 760 - ITAT KOLKATA] held that outstanding sum of invoices is akin to loan advanced by assessee to foreign AE., hence it is an international transaction as per explanation to section 92 B of the Act We deem it appropriate to set aside the impugned order on this issue and remit the matter to the file of the Ld.AO/TPO for deciding it in conformity with the above referred judgment. We also direct the Ld.TPO that in the event the WCA subsumes the outstanding receivables, no separate characterisation is to be made. For those receivables that fall out of the WCA pertaining to year under consideration, then, the rate of interest to be charged must be LIBOR + 300 basis points which is in accordance with the principles laid down in case of CIT vs. Cotton Naturals (I) Pvt. Ltd. [2015 (3) TMI 1031 - DELHI HIGH COURT] by considering a credit of 90 days. Disallowance u/s. 40(a)(ia) - salary cost reimbursed to Applied Material Inc. on an ‘at cost’ basis - non-deduction of TDS on reimbursement of salary expenses made on behalf of the seconded employees as fee for technical services - HELD THAT:- We remand this issue to the Ld.AO to consider the claim in accordance with the decision of M/s. Flipkart Internet Pvt. Ltd. [2022 (6) TMI 1251 - KARNATAKA HIGH COURT] and M/s. Toyota Boshoku Automotive India Pvt. Ltd. [2022 (4) TMI 1443 - ITAT BANGALORE], 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. On verification once it is ascertained that the assessee has deducted tax on the entire salary payable to the seconded employee u/s 192 of the act, no disallowance is warranted under section 40(a) (i) of the act. Denial of depreciation claimed on leasehold improvements - Assessee failed to submit documentary proof/ evidences substantiating the date of ‘put to use’ of assets for leasehold improvements acquired during FY 2014-15 - HELD THAT:- Both sides submits that the facts of the issue in the present year is identical with that of A.Y. 2014-15 [2022 (6) TMI 1357 - ITAT BANGALORE]. We therefore direct the Ld.AO to verify the additions made to the asset during the year under consideration based on the evidences filed by assessee for determining the disallowance in accordance with law.
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