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2022 (11) TMI 186 - AT - Income TaxTP adjustment - comparable selection - TPO rejecting the comparables of the assessee and choosing a fresh set of comparables - HELD THAT:- We notice that for the AY 2015-16 in assessee’s own case, the TPO issued a show cause notice to the assessee wherein the TPO proposed to include United Drilling Tools Ltd. and Groz Engg. Tools Pvt. Ltd. as comparable companies. The assessee filed its response raising objections for inclusion of the said two companies - TPO after considering the submissions of the assessee, in the final assessment order ddid not make any adjustments in the manufacturing segment and has accepted the comparables chosen by the assessee. No merit in the argument of the ld. AR that the TPO cannot a different stand in the year under consideration by rejecting the comparables of the assessee and choosing a fresh set of comparables. We therefore hold that the two comparables United Drilling Tools Ltd. and Groz Engineering Tools Ltd. have to be excluded from the comparables. The TPO is directed to recompute the ALP accordingly. Interest on receivables - TPO treated the delayed receivables as a separate international transaction and levied a notional interest using 6 months LIBOR + 400 basis points that worked out to 4.485% - HELD THAT:- We notice that as per the financials, the assessee is a debt free company. The impugned issue is squarely covered by the decision of the coordinate Bench of the Tribunal in the case of M/s. Barracuda Networks India Private Limited [2022 (5) TMI 322 - ITAT BANGALORE] - we remit the issue back to the TPO/AO for bench marking of the transaction of interest on delayed receivables and recomputation of ALP accordingly. TDS u/s 195 - Secondment charges and reimbursement - Addition u/s 40(a)(ia) - HELD THAT:- In assessee’s case on perusal of records it is noticed that the seconded employee is in the payroll of the assessee and tax has duly been deducted on the salary paid to the employee including what is paid in Italy. It is also noticed that the reimbursement has also been taken into account for the purpose of TDS u/s.192B. We further notice that the reimbursement of expenses towards insurance, travelling expenses of the visiting employees is a cost to cost reimbursement with no element of income. Respectfully following the ratio laid down in M/S. FLIPKART INTERNET PRIVATE LIMITED [2022 (6) TMI 1251 - KARNATAKA HIGH COURT] and GOLDMAN SACHS SERVICES PVT. LTD [2022 (4) TMI 1444 - ITAT BANGALORE] we hold that the reimbursement towards secondment charges and reimbursement of expenses are not liable for tax deduction u/s. 195 and therefore the disallowance made u/s. 40(a)(i) is not warranted on this count. Levy of interest u/s.234A - HELD THAT:- AR during the course of hearing submitted that there is no delay in filing the return of income and therefore there should not be any levy of interest u/s.234A. We direct the AO to examine this fact and not to levy interest u/s.234A if the assessee has filed the return of income before the due date u/s.139(1). It is ordered accordingly.
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