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2019 (6) TMI 1418 - AT - Income TaxRectification of mistake u/s 254 - mistake apparent on the face of record - determination of arm’s length price (ALP) in respect of an international transaction of giving up loan b the assessee to its Associated Enterprise (AE) and interest income that the assessee ought to have received on such loan - HELD THAT:- Admittedly, the factors on which the Tribunal passed an order of remand were not indicated either in the order of TPO or in the order of DRP. That is why the Tribunal has observed in its order that no material was brought on record indicating the terms of loan, loan tenure, security offered, etc. We are, therefore, of the view that there is no mistake in the order of Tribunal and the contentions of the assessee of the miscellaneous petition making reference to decided cases on the point do not require discussion. We however make it clear that the issue will be considered afresh by the TPO and all aspects of the issue are left open and that is the purport of the order of the Tribunal. Accordingly, the MP of the assessee on ground No.5 is dismissed. Transaction of giving of guarantee by the assessee to its AE - assessee has contended that corporate guarantee is not an international transaction and that the Tribunal overlooked certain judicial pronouncements and that details of corporate guarantee and credit rating were also filed bore the Tribunal as well as before the revenue authorities - HELD THAT:- We are of the view that all these aspects can be canvassed in the set aside proceedings before the TPO. The ground on which the Tribunal remanded the matter back to the TPO was that sufficient economic and business factors were not considered by the TPO before determining the ALP. We are, therefore, of the view that there is no mistake apparent on the fact of record in the order of Tribunal calling for interference u/s. 254(2) of the Act. Accordingly, the MP on ground No.6 is also dismissed. Disallowance u/s. 14A - HELD THAT:- We find that the stand taken by the assessee is correct and therefore the conclusion of the Tribunal that assessee did not raise the issue of excluding investments which did not yield any dividend income while computing the average value of investments is incorrect and contrary to material on record. We therefore recall the order of Tribunal for the limited purpose of adjudicating the issue with regard to computation of average value of investment while making disallowance under Rule 8D r.w.s. 14A Excluding royalty income from the business income for the purpose of allowing deduction u/s. 10A - HELD THAT:- As rightly submitted by the ld. counsel for the assessee, the Tribunal has proceeded on an erroneous assumption that royalty income was not in respect of IPRs generated by industrial undertaking, whereas the revenue authorities did not dispute this position; nor was this the basis of their refusing to treat royalty income forming part of business income. The revenue authorities proceeded on the basis that this was not part of export income and therefore excluded the same from the business income. There is, therefore, a mistake apparent on the face of record calling for interference u/s. 254(2) of the Act. We therefore recall the order of Tribunal for the limited purpose of adjudicating ground No.14 of the grounds of appeal of the assessee. Excluding expenses incurred in foreign currency from export turnover while computing deduction u/s. 10A - HELD THAT:- Assessee as contained in the MP and are of the view that the Tribunal in its order has not considered the real controversy and proceeded on a wrong basis as if appeal was against the directions of the DRP. By doing so, the grievance of the assessee in ground No.15 has not been adjudicated. We therefore recall the order of the Tribunal for the limited purpose of adjudicating ground No.15. Non-adjudication of ground No.18 & 19 of the grounds of appeal raised by the assessee - HELD THAT:- It is evident from the order of Tribunal that these grounds were not adjudicated and therefore we recall the order of the Tribunal for the limited purpose of adjudicating ground Nos. 18 & 19.
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