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2022 (4) TMI 1579 - AT - Income TaxTP Adjustment - Subsidiaries/branches of assessee situated in various countries have availed the services rendered by OnMobile USA and therefore the costs incurred in that regard are to be shared by the 6 entities - submissions of Ld.AR that, this would lead to reduction in the income of assessee in India and shifting of the same to foreign country which is contrary to the transfer pricing provisions and the entire adjustment made by the Ld.AO/TPO, is on the premise that, the services were availed by the said subsidiaries/branches in their respective jurisdiction from assessee, which is contrary to the facts - HELD THAT:- We remand the transfer pricing issues alleged by assessee in ground number 3-7 back to Ld.TPO. The Ld.TPO would analyse the documents/evidence is filed by assessee and understand the business model in order to verify the arm’s-length of the international transactions undertaken by assessee. The Ld.TPO is directed to consider the transfer pricing issues de no move in accordance with law and by giving proper opportunity of being heard to assessee. Action of Ld.TPO in imputing interest by taking Indian PLR as against USB LIBOR - HELD THAT:- We have perused the decisions relied by the Ld.AR in the light of submissions advanced by both sides. It is a settled position that interest rates should be the marketer to remind interest rate applicable to the currency concerned in which the loan is to be repaid. We direct the Ld.TPO to compute interest on delayed interest payable based on the currency in which the said interest is payable to assessee. The Ld.TPO cannot apply Indian PLR in this transaction. Interest if any is to be computed it has to be computed by adopting LIBOR. We therefore remand these issue back to the Ld.TPO to recompute the interest on the interest payable to assessee by the subsidiaries/branches by adopting LIBOR. Credit of taxes, deducted at source not granted by AO - HELD THAT:- Both assessee as well as the Ld.DR submitted that, these issues may be remanded to the Ld.AO/TPO to consider it in accordance with the evidence is filed by the assessee. Accordingly all these issues are remanded to assessee to consider the claim after verification of the documents filed by assessee in accordance with law. Grant of depreciation of the rate of 60% on NMS CG/TX cards, switches et cetera as these items come within the definition of “computer”. Granting deduction under section 10A - profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years - HELD THAT:- As decided by Hon’ble Karnataka High Court M/S. ONMOBILE GLOBAL LTD. [2021 (1) TMI 923 - KARNATAKA HIGH COURT] the assessee is engaged in the business of mobile added value services, which involve content development in its STP unit. It has further been held that the assessee has a dedicated studio in this STP unit where music related content is developed. The assessee procures music and other contents on the third parties. The assessee also uses its studios for content development. It has further been held that assessee is engaged in the activity of developing content and conversion of procured content into mobile readable format and the same would qualify to be classified as content development or data processing and the same would be covered under the notification dated 26.09.2000 issued by the Central Board of Direct Taxes. The High Court of Delhi in ML OUTSOURCING P. LTD [2014 (9) TMI 396 - DELHI HIGH COURT] and MCKINSEY, [2015 (3) TMI 1226 - DELHI HIGH COURT], has interpreted the notification and has held that intention of the legislature is not to constrain or restrict but to enable the Board to include several services of products of similar nature in the ambit of Section 10A of the Act. It has further been held that the notification covers within its ambit even the services which cannot be sent abroad. Thus, the Tribunal has rightly held that the assessee is entitled to benefit of deduction under Section 10A
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