2022 (3) TMI 1513 - AT - Income Tax

TP Adjustment - characterisation carried out by the Ld.TPO of the assessee’s business - HELD THAT:- As submitted that for A.Y. 2010-11, assessee was identically characterised in the TP study which has not been disturbed by the transfer pricing officer therein. Subsequently, assessee has been characterised in different ways in the subsequent assessment years which needs to be verified at the end of Ld.TPO.

In the interest of justice and to remain consistent in the approach of characterisation of assessee’s business module, we remand the transfer pricing issues to the Ld.AO/TPO for de novo verification. Assessee is directed to file complete details regarding FAR analysis before the authorities in order to substantiate its arguments regarding the characterisation in the TP study.

TPO is directed to analyse the details so filed by assessee and to consider the international transactions in accordance with various principles laid down by this Tribunal as well as various High Courts on this issue. Needless to say that proper opportunity of being heard is to be granted to assessee.

Interest on receivables - As the Ld. Counsel has considered for the rate on receivables to be applied at LIBOR + 2%, respectfully following the view taken by the Coordinate Bench in case of Swiss Re Global Business Solutions India Pvt. Ltd. [2022 (1) TMI 1275 - ITAT BANGALORE] we direct the Ld.AO/TPO to compute the ALP of the transaction accordingly.