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2014 (7) TMI 465 - AT - Income TaxAddition of interest fee and commission – ECG granted by overseas branches – Held that:- Following M/s Credit Lyonnais Versus ADIT(International Taxation) [2014 (7) TMI 1 - ITAT MUMBAI] - the interest cannot be taken into account for attribution of income towards service charges/fees - only the fee charged by the foreign branches can be taken into consideration for making adjustment under transfer pricing provisions - the adjustment in respect of fee and other charges received by the foreign branches on the borrowers of ECG should be estimated @ 20% - Decided partly in favour of Assessee. Claim of loss in re-valuation - Outstanding foreign exchange contracts– Held that:- Held that:- CIT Versus M/s Woodward Governor India P. Ltd. & M/s Honda Siel Power Products Ltd. [2009 (4) TMI 4 - SUPREME COURT] – assessee entitled to adjust the actual cost of imported assets at each balance sheet date - Decided against Revenue. Disallowance of expenses u/s 14A r.e Rule 8D of the Act – Earning of exempt income – Held that:- Rule 8D is not applicable for the AYs prior to 2008-09, relying upon Godrej & Boyce Mfg. Co. Ltd. v/s DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - some reasonable basis has to be adopted, for the purpose of disallowance - the Tribunal has already held that 2% of the total exempt income should be disallowed for the purpose of section 14A, which will take care of administrative expenses, the disallowance u/s 14A, should be restricted to 2% of the exempt income earned by the assessee – Decided partly in favour of Assessee.
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