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2020 (11) TMI 451 - AT - Income TaxTP Adjustment - PLI computation - whether the reimbursement amount received by the assessee can be ignored while considering the rental expenditure as operating expenditure? - HELD THAT:- It is imperative to examine as to whether the assessee has utilised the premises for which rental has been paid for the purpose of business carried on by the assessee. If the said premises has been so utilised, then the rental expenditure should be taken as operating expenditure. It is an undisputed fact that M/s. GE Power has given the money to the assessee only in respect of rental expenditure burden that is going to be borne by the assessee. In that case, the reimbursement of rental expenditure, in our view, is intricately related to the rental expenditure. Accordingly, if rental expenditure is considered as an operating expenditure, then the reimbursement should be set off against the rental expenditure and net rent expenditure should be taken as operating expenditure. On the other hand, if the rental expenditure is not considered as operating expenditure, then both rental expenditure and reinvestment of reimbursement received by the assessee should be excluded while computing PLI of the assessee. We feel it proper to restore this issue to the file of A.O./TPO to examine it afresh in the light of discussions made (supra). Working capital adjustment - it was the submissions of the assessee that the relevant details have been furnished to the tax authorities - A.R. submitted that the assessee would be in a position to furnish explanations and information in this regard to the A.O./TPO. In view of the above, we are of the opinion that the claim of working capital adjustment also requires examination at the end of A.O./TPO - we restore the issue of transfer pricing adjustment to the file of A.O./TPO. Interest charged u/s 234A - submission of the assessee that the return of income has been filed by it within the due date prescribed u/s 139(1) of the Act and hence no interest is chargeable u/s 234A of the Act. Since the facts relating to this issue also require examination, we restore this issue also to the file of A.O. Appeal filed by the assessee is treated as allowed for statistical purposes.
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