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2022 (5) TMI 272 - AT - Income TaxTP Adjustment - ITEs Segment on transaction with Colt Luxembourg - whether the margins accepted by MAP to be applied or not? - whether margin accepted in MAP resolutions i.e. 15.50% should be applied to bench mark the ITEs services rendered by the assessee to Colt Luxembourg as against the margin of 32.24% computed by the Ld. TPO? - HELD THAT:- As relying on the case of Amazon Development Centre (India) (P.) Ltd. [2018 (5) TMI 343 - ITAT BANGALORE] and CGI Information System & Management Consultants (P) Ltd. [2017 (5) TMI 777 - ITAT BANGALORE] in the MAP Resolution, the margin accepted was 15.50% , we direct the AO/TPO to apply to benchmark ALP at 15.50% with respect to the ITEs segment on transaction with Colt Luxembourg. Accordingly, we allow the Assessee’s Grounds of Appeal No. 1 to 13. Interest on receivables - computing notional interest on the delayed receipt of payment in case of certain receivables with AE’s at PLR plus 300 basis points - DRP in its order directed the Ld. TPO to apply interest in keeping with safe harbor regulations i.e. SBI base rate on 30.06.2009 plus 300 basis points which amounted to 14.75% and the addition got revised - HELD THAT:- As in the MAP Resolution entered into between UK and Indian Authorities in respect of the addition pertaining to UK got settled at 3 months average Euribor plus 200 basis points applied on receivables beyond 90 days, we direct the AO/TPO to apply 3 months average Euribor plus 200 basis points on the receivables received beyond 90 days in respect of outstanding from Colt Luxembourg. Accordingly, allow the Grounds No. 14 to 16 for statistical purpose. Purchase of fixed assets - TPO added the entire amount of fixed assets purchased by the assessee from its AE’s during the year - DRP in its order directed the TPO to accept the value of fixed assets in case of those invoices from AE where it is mentioned that, they have been valued at the present depreciated value of equipment - HELD THAT:- In the case of Assistant Commissioner of Income Tax Vs. Coastal Energy Pvt. Ltd, Chennai [2011 (7) TMI 154 - ITAT, CHENNAI] it is held that, the custom authorities are assigning the value to imported goods on the basis of scientifically formulated methods and they are responsible for determining a fair value of the imported goods. By considering the facts and circumstances of the case, we are of the opinion that, the fixed assets purchased by the assessee cannot be taken as NIL and the value assigned by the custom authorities are to be taken as the fair value of the fixed assets purchased by the assessee - Accordingly, we allow the Assessee’s Grounds of Appeal No. 17 & 18. Levying interest u/s 234B and 234C on the additional income agreed as per the Advance Pricing Agreement entered between the appellant and the Central Board of Direct Taxes and offered to tax by the appellant in the modified return of income u/s 92CD(1) - HELD THAT:- As relying on case of Prime Securities Ltd. Vs. Assistant Commissioner of Income Tax (Investigation) [2010 (12) TMI 475 - BOMBAY HIGH COURT] we hold that, the levy of interest u/s 234B and 234C of the Income Tax Act on additional income agreed as per advance pricing agreement entered between appellant and the CBDT is illegal. Ergo, we allow the additional grounds of appeal.
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