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2012 (3) TMI 208 - AT - Income TaxTransfer pricing - Proviso to section 92-C(2) - downward variation of 5 per cent in determining the arm's length price inter alia, include the exclusion from the comparables selected by the TPO - Held that :- Assessing Officer should examine the mean margin of left out comparables and of the assessee with reference to the figures adopted by the TPO. If the remaining difference as computed as per our directions, between these two remains less than 5%, then, the benefit of proviso to Section 92C(2) will be given to the assessee and no addition will be called for. Excessive computation of interest under section 234-B by the ld. AO - Held that :- restore this issue to the file of the assessing officer to re-compute interest under section 234-B as per law after giving a reasonable opportunity of being heard to the assessee Interest of refund - adjustment u/s 57(iii)- held that:- We also do not find force in the contention of the assessee that since the payment of tax was made out of overdraft facility, therefore, interest receipt on income tax refund should be adjusted against interest paid on overdraft facility as according section 57(iii) only such expenditure (not being in the nature of capital expenditure) can be allowed if it is laid down or expanded wholly and exclusively for the purpose of making or earning of such income. Payment of Income tax cannot be said to be made for earning of interest, hence the case of the assessee will also be out of the purview of section 57(iii). - Decided against the assessee. Interest under section 234-B of the Act is not to be calculated on tax on the total income determined under regular assessment under section 143(3) of the Act - Held that :- interest on Income Tax refund of ₹ 15,229,404 is to be netted off against the interest payment of ₹ 18,509,964 and since the interest received by the appellant is less than the interest expense for the year under appeal, no part of the interest on Income Tax refund of ₹ 15,229,404 is to be excluded while computing profits of business eligible for deduction under section 10-B of the Act.
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