Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 106 - AT - Income TaxDisallowance of part of the interest paid by the assessee - addition on the ground that the interest paid on Compulsory Convertible Debenture did not satisfy the arm’s length principle and application of LIBOR rate considering the rupee denominated Compulsory Convertible Debenture as External Commercial Borrowings instead of rupee denominated Compulsory Convertible Debentures - Held that:- The assessee had furnished the additional evidences for the first time before this bench of the Tribunal, those were not available at the time of proceedings before the TPO/AO/DRP. The new evidence now furnished by the assessee, go to the root of the matter and are very much relevant to resolve the present controversy i.e. as to whether the borrowing was the External Commercial Borrowings or not, it is also not clear as to whether the assessee claimed the deduction of the interest paid on issuance of Compulsorily Convertible Debenture in its return of income. In the present case, the assessee carried out analysis on BSE database which provides the details of the comparable instruments and submitted the same as additional/supplementary analysis vide letter dated 27.04.2016 which indicated that the average coupon rate of comparable instruments issued in Real Estate Industry was 14.50% as compared to the average coupon rate of 12.39% of all the instruments issued during the year, which is evident from Annexure 1 attached with the letter dated 27.04.2016. The assessee had also claimed to have collected the details of interest rate offered by nationalized banks in India to the borrowers having similar credit rating as that of the assessee vide Annexure 4 of the letter dated 27.04.2016, first time before this bench of the Tribunal and as per the said document the average lending rate was computed at 13.66%, the assessee claimed that the international transaction of payment of interest on CCD’s entered into by it was at arm’s length. Since the aforesaid documents furnished by the assessee first time before the Tribunal are relevant to resolve the present controversy and the assessee had reasonable cause not to furnish the same before the authorities below because those were not available at the time of framing the assessment or the proceedings before the DRP/TPO. Therefore, the additional evidences furnished by the assessee are admitted. However, these documents are to be considered by the authorities below. Thus we deem it appropriate to set aside this case back to the file of the AO/TPO to be decided afresh - Decided in favour assessee for statistical purposes.
|