Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (2) TMI 445 - ITAT BANGALORETP Adjustment - International transaction - interest on delayed collection of receivables - assessee proposed adjustment in relation to interest on delayed collection of receivables by applying the 6 months LIBOR plus 400 basis points after granting credit period of 30 days - HELD THAT:- This Bench in case of Instrumentation Corpn. Ltd. v. Asstt. DIT [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. Alternatively, it also argued by the Ld.AR that in TNMM, working capital adjustment subsumes sundry creditors. In such situation computing interest on outstanding receivables as loans and advances to associated enterprise would amount to double taxation. We deem it appropriate to set aside this issue to Ld.AO/TPO for deciding it in conformity with the above referred judgment. Needless to say, the assessee will be allowed a reasonable opportunity of being heard in accordance with law. We also direct the Ld.TPO that in the event the WCA subsumes the outstanding receivables, no separate characterisation is to be made. However for those receivables that fall out of the WCA pertaining to year under consideration, then, the rate of interest to be charged must LIBOR + 300 basis points 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. Mistake in the computation of income - Computation of tax liability u/s 115JB - increase in book profit u/s 115JB and computation of tax liability - computational errors - adjustment on account of deferred tax - HELD THAT:- As per explanation to Section 115JB(2) of the Act, the amount of deferred tax, if any, credited to statement of profit and loss is to be reduced while calculating the amount of book profits as per MAT provisions.Accordingly, in the instant case, the deferred tax which has been credited to statement of profit and loss account was reduced while computing the book profits in the return of income filed by the Assessee. However, the same is not considered in the computation sheet annexed to the Order passed by the Ld. AO. AO was not justified and has erroneously computed interest u/s. 244A thereby resulting in short grant of interest. Where an appeal is filed against an order passed by the Ld.CIT(A), any mistake that arises in the computation of income could be rectified only in an order passed by this Tribunal as the principle merger would be applicable. We therefore reject the argument advanced by Ld.DR. We direct the Ld.AO to compute the taxable income in the hands of the assessee in accordance with law by considering the objections raised by the assessee hereinabove in Grounds 3-6.
|