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2020 (12) TMI 1161 - HC - Income TaxComputation of deduction u/s 10A - telecommunication expenses and traveling expenses incurred in foreign currency reduced from export turnover has to be reduced from total turnover for computing deduction - HELD THAT:- The first substantial question of law has already been answered against the revenue by a decision of the Supreme Court in HCL TECHNOLOGIES LTD.' [2018 (5) TMI 357 - SUPREME COURT]. The aforesaid aspect of the matter could not disputed by the learned counsel for the revenue. In view of the decision of the Supreme Court, the first substantial question of law involved in this appeal is answered against the revenue and in favour of the assessee. TP Adjustment - Arms length price adjustment on account of interest on external commercial borrowings - loans or external commercial borrowings between the cross border entities resulting in an international transaction and each transaction has to be considered every year with respect to the arms length price - HELD THAT:- It is equally well settled that rate of interest should be determined on the basis of rate of interest prevailing at the time of availing the loan. From perusal of the order passed by the tribunal, it is evident that before the tribunal, the assessee had filed the copy of show cause notice issued by Transfer Pricing Officer, the assessee's submission in response to the same and order of the Transfer Pricing Officer for Assessment Year 2008-09. The tribunal has further found that the loans were obtained by the assessee in the year 2000-01 at the rate of 7.5% and 8.49% respectively. The tribunal has further recorded the finding that assessee has obtained the loans in the year 2001 and the issue has been considered by the Transfer Pricing Officer for the Assessment Years 2004-05 and 2005-06 and also for the Assessment Year 2008-09. It has further been held that Transfer Pricing Officer after considering the assessee's submission has accepted the rate of interest fixed in the loan agreements. It is also pertinent to mention here that the rate of interest has been accepted by the Assessing Officer for the years 2002-03 to Assessment Year 2008-09 except the Assessment Year 2006-07. Therefore, the tribunal has rightly held that the revenue cannot be allowed to make a departure in case of rate of interest for Assessment Year 2006-07. The Supreme Court in RADHASOAMI SATSANG Vs. COMMISSIONER OF INCOME-TAX’ [1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year. For this reason also, in the facts of the case, a different view cannot be taken.
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