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2023 (1) TMI 401 - AT - Income TaxTP Adjustment - comparability of Assessee’s Software Development Services segment - HELD THAT:- . Respectfully following the decision of the coordinate bench of the Tribunal in Sandisk India Device Design Centre P. Ltd. [2022 (6) TMI 1299 - ITAT BANGALORE] we exclude these companies viz., Persistent Systems Ltd., Infosys Ltd., Thirdware Solutions Ltd., L&T Infotech Ltd., Nihilent Ltd., Aspire Systems India Pvt. Ltd. & Infobeans Technologies Ltd., from the comparables. Companies functionally dissimilar with that of assessee need to be deselected. Interest on receivables - TPO treated the trade receivables beyond 60 days as an international transaction and adopted notional interest rate of 4.985% being LIBOR-6 months + 450 basis points, without providing the method of computation of such rate to the Assessee - HELD THAT:- As decided in M/s. Barracuda Networks India Private Limited [2022 (5) TMI 322 - ITAT BANGALORE] Determination of ALP in respect of the international transaction of giving extended credit period for receivables should be directed to be examined afresh by the AO/TPO on the guidelines laid down in the decision referred to in the earlier paragraph, after affording Assessee opportunity of being heard. As held in the aforesaid decision the prime lending rate should not be considered and this reasoning will apply to adopting short term deposit interest rate offered by State Bank of India (SBI) also. The rate of interest would be on the basis of the currency in which the loan is to be repaid. We hold and direct accordingly. Respectfully following the above decision of the coordinate bench we remit the issue back to the AO/TPO with a direction to examine the issue afresh after giving a reasonable opportunity of being heard to the assessee. The AO/TPO is also directed to consider the ratio laid down in the above decision while considering the issue afresh.
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