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2016 (1) TMI 853 - AT - Income TaxTP adjustment on account of interest free loans given to the AEs - Held that:- On perusal of the said orders / directions of the Revenue Authorities, we find, in principle DRP did not agree with the TPO's proposal of relying on the internal comparables and adopting 15% as applicable rate of interest in benchmarking the transactions with CNK Singapore. However, having held so, DRP also relied on SBI-PLR, which is not the applicable interest rate in the country of Singapore. It is the settled proposition in law that the interest in respect of the current year in which the transaction has taken placed should be considered while calculating the interest on loan granted in foreign currency. Therefore, in principle, we reject the direction of the DRP in thrusting on assessee the SBI-PLR and direct the lower authorities to consider the LIBOR of Singapore. Considering the suo moto adjustments of the assessee, which amounts to addition of ₹ 2,49,260/-, we direct the Assessing Officer to restrict the addition of adjustment to the said amount and delete the balance of addition - Decided in favour of assessee in part. Benchmarking of corporate guarantee related taxes - Held that:- We direct the AO to restrict the adjustments to 0.5% as upheld by the Hon‟ble High Court in the case of Everest [2015 (5) TMI 395 - BOMBAY HIGH COURT] Adjustment on account of share premium - Held that:- Adjustment made on account of ‘share premium’ and ‘interest’ charged on account of ‘under charged premium amount’ does not attract the TP provisions. - Decided in favour of assessee. Disallowance made u/s 14A read with Rule 8D - Held that:- Issue remanded for reconsideration consedring the case of the assessee that the assessee has not earned any dividend income or exempt income during the year and therefore, the said provisions of section 14A of the Act do not attract.- Decided in favour of assessee for statistical purposes. Disallowance in respect of the Annual Information Report (AIR) qua reconciliation - Held that:- The onus is on the Assessing Officer to inform the assessee giving all the details as to on, on what issue, the reconciliation is required, how that entry relates to the assessee etc. How any assessee can reconcile an entry or transaction which does ot pertains to him. Therefore, the onus is on the AO to inform the same. Considering the same and the finding of the Assessing Officer that no exhaustive exercise of reconciliation is undertaken by him during the assessment, we find need for remanding. Accordingly, we remand this ground to the file of the Assessing Officer for fresh adjudication of the issue after granting a reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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