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2013 (11) TMI 1239 - AT - Income TaxDisallowance of interest expenditure - held that:- Admittedly, the assessee had paid interest on the borrowings made from its parent company in the earlier years and no fresh borrowings had been made during the year under consideration. The interest expenditure had been allowed in the hands of the assessee from year to year. Further the advances to M/s Hindustan Max G.B. Ltd. were also made in the earlier years and the balance is brought forward from the preceding year on which in the earlier years the assessee was charging interest. However, the interest on the said loan had not been recognized during the year under consideration as M/s Hindustan Max G.B. Ltd. had gone before the BIFR because of financial constraint. - claim allowed - decided in favor of assessee. Prior period expenditure - taxes paid on salary of an expatriate employee working for the assessee - held that:- The liability being crystallized in the year under appeal and having been paid in the year under appeal, is to be allowed as a deduction in the year under consideration. - decided in favor of assessee. Transfer Pricing Adjustment (TPA) - determination of ALP - transactional net margin method - selection of comparable - held that:- fresh transfer pricing study can be conducted by the TPO and in view of the provisions of Rule 10B(4) of Income Tax Rules the data of the relevant year is to be considered for finding the comparables which in turn stand the test of FAR analysis. However, it is the requirement of law that the assessee should be confronted with the said data in order to rebut the new comparables selected by the TPO and also to pinpoint as to why such data should not be used against the assessee. - Decided partly in favor of assessee Business loss - 'export incentive' written off in the Profit & Loss Account. - assessee contended that the same was offered for tax in the earlier years - The case of the revenue is that recovery of the said amount had not crystallized during the year under consideration and the said write off was premature as the issue was still pending for consideration before the Ministry of Commerce. - Held that:- The assessee had written off the export incentives totalling Rs. 76,14,696/- in the financial year 2005-06 i.e. even before the meeting of the Grievance Redressal Committee of Ministry of Commerce. We are of the view that such write off of the export incentive by the assessee during the year under consideration is premature in the abovesaid facts and circumstances of the case and is not an expense relatable to financial year 2005-06. Further, admittedly the assessee has received the said export incentives in the financial year 2007-08 itself establishes the case of the revenue - Decided against the assessee. Write off of export incentives towards DEPB licences received from Kandla SEZ - held that:- the additional evidence filed by the assessee in respect of the copies of application made in respect of the DEPB claim and also the copies of the DEPB licence received by the assessee under which the claim of DEPB was restricted by Kandla SEZ, were not available before the Assessing Officer. Hence, the issue is restored back to the file of the Assessing Officer for the limited purpose of verifying the quantum of the DEPB licence received by the assessee under which its claim was rejected. - matter remanded back.
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