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2019 (2) TMI 619 - AT - Income TaxTP adjustment in respect of the interest charged on the loans advanced by the assessee to its AEs - assessee had given loans in USD to its AEs - Held that:- ALP of the interest charged on the amounts advanced by the assessee to its AEs, viz. (i) ILFS Maritime Offshore PTE Limited; (ii) IL&FS International PTE Limited; and (iii) Elsamex had rightly been benchmarked by the assessee as per LIBOR and EURIBOR rates, and the same could not have been determined as per the Indian rate as had been so taken by the A.O/TPO. We thus direct the A.O/TPO to determine the ALP of the interest charged by the assessee on the amounts advanced to its AEs viz. (i) ILFS Maritime Offshore PTE Limited; and (ii) IL&FS International PTE Limited by taking the LIBOR rates as the basis. Insofar, the amount advanced by the assessee to its AE i.e. Elsamex, the A.O shall take the EURIBOR rates as the basis for benchmarking the interest charged by the assessee on the loan advanced to the said AE. Grounds of Appeal No. 5 to 11 raised by the assessee are allowed in terms of our aforesaid observations. Addition u/s 14A - revised claim of disallowance u/s 14A that was raised by the assessee on the basis of a revised computation of income - Held that:- We are in agreement with the view of the A.O that in terms of the ratio of the decision of the Hon’ble Supreme Court in the case of Goetz (India) Ltd.[2006 (3) TMI 75 - SUPREME COURT], the A.O was not vested with any jurisdiction to have allowed the revised claim of disallowance under Sec. 14A that was raised by the assessee on the basis of a revised computation of income in the course of the assessment proceedings. We thus are of the considered view that in the backdrop of the aforesaid settled position of law the assessee remained at a liberty to assail the disallowance made under Sec. 14A, as long as such claim was based on the facts available on record. No disallowance u/s 14A is liable to be made if no exempt income is received or receivable by the assessee during the relevant previous year. On the basis of our aforesaid observations we restore the issue to the file of the A.O for readjudicating the issue pertaining to disallowance under Sec. 14A in the hands of the assessee, in terms of our aforesaid observations. Needless to say, the A.O shall during the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to substantiate its claim that no disallowance under Sec. 14A was liable to be made in its hands.
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