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2021 (8) TMI 908 - AT - Income TaxTP Adjustment - international transaction pertaining to purchase of capital goods from AE - AO made adjustment by denying the 8% markup charged by the AE on the supply of capital goods and disallowed the depreciation also to that extent - assessee contested that the purchase of capital goods cannot be benchmarked separately. The main argument was the depreciation do form a component of operating cost and hence cannot be given separate treatment - HELD THAT:- Since, the assessee has been denied proper opportunity, the TPO and the ld. DRP did not have the benefit of examining the purchase of capital goods, the issue of allowability or not of the markup of 8% charged by the AE has not been determined as per the approved methods, we hereby deem it fit to remand the matter to the file of the ld. DRP to determine the ALP as per the approved methods after giving an opportunity to the assessee to make their submissions. The assessee is also hereby directed to comply with the directions of the ld. DRP in furnishing the complete details and substantiating their case. Addition of liquidated damages incurred by the assessee pursuant to breach of contractual arrangements - HELD THAT:- As decided in ow case [2019 (12) TMI 667 - ITAT DELHI] the charges pertain to contractual obligation which was not complied with but the AO held it as penalty. The matter has been remanded back to the file of the AO for fresh examination in the assessment year 2014 -15 as well as 2013014. We have given due consideration to the observations of the ld. DRP, the expense also do not pertain to the year in question. Hence, the AO is hereby directed to examine the issue afresh with regard to the allowability of the expenses per se and also the year to which the expenses belong to. Interest on Foreign Term Loan - AO disallowed the interest paid on foreign term loan as no TDS was deducted by the assessee - AO disallowed it on the grounds that the assessee failed to deduct TDS on the interest credited in the books whereas the assessee submitted that only an amount of ₹ 5,06,995/- has been accrued on the loan received - HELD THAT:- As DRP referred the matter to the AO for factual verification. Since, it is a matter of factual verification, we decline to interfere with the order of the ld. DRP. Reconciliation of amounts in 26AS - HELD THAT:- The revenue as per the books of accounts of the assessee was ₹ 2,39,74,386/- against the revenue as per 26AS of ₹ 5,73,39,416/- thus, reflecting a difference of ₹ 3,33,65,030/- the sum which has been treated as income of the assessee by the Assessing Officer and the ld. DRP. The assessee is hereby directed to submit the reconciliation statement and the accounting principles used with reference to the continuity of treating the various receipts. Effect of order u/s 154 - HELD THAT:- AO failed to take into consideration the order u/s 154 passed by the TPO on 26.03.2021 reducing the TP addition. The same is hereby directed to be rectified.
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