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2021 (2) TMI 1085 - AT - Income TaxTP Adjustment - ALP adjustment regarding its international transactions - Inclusion/exclusion of misc. income - HELD THAT:- We ex facie notice that assessee's misc. income is in no way related to its international transactions with overseas associated enterprise which would be liable to be considered for the purpose of arriving at ALP under Chapter X of the Act. There is no justification to include the same in this entire process therefore. We deem it appropriate to restore the instant first issue back to the Transfer Pricing Officer 'TPO' for his appropriate adjudication as per law with a specific direction that in case if it is found after verification of the relevant records coming from assessee's level that the impugned income is not relevant for determination of ALP pertaining to international transactions with the AE(s) it would not be considered in the said consequential computation exercise. Learned counsel has also placed on record the TPO's order for very next A.Y. 2015-16 stating he had himself excluded identical misc. income for the purpose of determining the ALP adjustment regarding its international transactions. Instant vth substantive ground (supra) is restored back to the TPO Addition of interest receivables - amounts due from overseas associate enterprises - taxpayer's plea was that its overseas receivables to its AE(s) were much more than amounting to ₹ 11.59 crores and therefore, even if it is held interest is to be charged from both ends, the net result would come in negative only - HELD THAT:- We find no merit to sustain the impugned addition/adjustment. Suffice to say, neither the TPO's order nor DRP's directions forming subject matter of the instant issue make it clear as to how the alleged interest rate of 14.75% had been adopted by drawing support from the relevant market comparables. Learned counsel referred us to assessee's pleadings that the lower authorities have been guided by SBI's short term interest rates to arrive at this figure. We see no reason to concur with this bench mark since we are dealing with international transactions with overseas associate enterprises having receivables from both sides involving international currency denomination where as the authorities have gone by domestic deposit rates only. We thereby direct the TPO to delete the impugned addition on this count alone without deeming it proper to consider all other aspects. The assessee succeeds in the instant ixth substantive ground. Reimbursement of expenses - HELD THAT:- We notice during the course of hearing that the TPO's observations in page 7 para 7.8 treating the impugned segment as covered under "specified domestic transaction" which stands repealed by the Finance Act, 2013. This tribunal decision in Texport Overseas Pvt. Ltd. vs. DCIT, Bangalore [2017 (12) TMI 1719 - ITAT BANGALORE] holds that the necessary consequence that flows from legislative action; after repealing corresponding provision, is that the same never existed in the Act. reverse lower authorities action on this count alone. The assessee succeeds in the instant xth substantive ground.
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