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2019 (11) TMI 1026 - AT - Income TaxTP Adjustment - provision of corporate guarantee as an international transaction - HELD THAT:- After considering the decision of this Tribunal in Glenmark Pharmaceuticals Vs ACIT [2013 (11) TMI 1583 - ITAT MUMBAI] the DRP in principle accepted that the adjustment on account of corporate guarantee is to be restricted by applying ALP at 0.53%, however, the DRP has not passed directions in conformity of the decision of this Tribunal in assessee’s own case. This is a clear case of judicial indiscipline on the part of the DRP who was performing quasi-judicial functions while passing the directions U/s 144C(5) of the Act. The DRP is supposed to decide the matters independently and as per the law and not supposed to act as a guardian or revenue collecting authority like tax authorities. Thus, we find that this action of the DRP is highly contradiction to the object for which the said panel was constituted under the provisions of the Act. Accordingly, ground No. 1 of the assessee’s appeal is dismissed and ground No. 2 of the appeal is allowed. Disallowance of loss on sale of shares of the subsidiary company M/s Jewel Jems USA Inc. - HELD THAT:- For the A.Y. 2012-13, the Tribunal in assessee’s own case has considered the issue of loss in respect of investment made in the equity shares of the subsidiary and after considering and analyzing the facts as well as the law on the point has held that the USA subsidiaries were set up to expand its business and the expenditure was purely for business expansion of the assessee’s product. Thus, the investment made were held to be out of commercial expediency and business interest and consequently the loss of such investment in the 100% subsidiary not recoverable was an allowable business loss. Interest on income tax refund - assessee objected this addition before the DRP on the ground that no such interest was received by the assessee on the refund of income tax - HELD THAT:- DRP directed the A.O. to verify this fact of receipt of interest on refund and then compute the income. Since there is a typographical mistake in mentioning the Section which is 234D instead of Section 244A of the Act the A.O. has repeated the addition. It is apparent that the A.O. while passing the final order has not given effect to the directions of the DRP, accordingly, we direct the A.O. to verify the fact whether this interest was actually paid to the assessee or not and then decide this issue after giving an opportunity of hearing to the assessee.
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