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2023 (4) TMI 884 - AT - Income TaxTP adjustment - interest charged by the assessee on loans given to its associate enterprise/subsidiary - AO benchmarked the transaction taking the interest rate at which the assessee would get the loan in India and thereby made the transfer pricing adjustment by taking the interest rate @ 14.47% - HELD THAT:- The loan was advanced by the assessee to its wholly owned subsidiary for strategic acquisition abroad with a view to further the assessee’s business profile. DR could not rebut the above plea of the ld. AR that the loans were benchmarked as per relevant market rate of the relevant currency in which loans were advanced and as per the prevailing rate in that foreign country. As relying on case of Russell Credit Ltd. [2020 (1) TMI 781 - ITAT KOLKATA] and M/s Britannia Industries Ltd. [2018 (11) TMI 1744 - ITAT KOLKATA] we hold that the ld. CIT(A) rightly applied the case laws and deleted the impugned loan interest arm’s length price adjustment made by the Assessing Officer. Ground Nos.1 to 4 are accordingly dismissed. Disallowance u/s 40(a)(ia) - non-deduction of TDS on payment paid on account of advertisement to St. Xavier’s Alumni Association - HELD THAT:- As in the appellant’s own case for assessment year 2008-09 to 2010-11 his predecessor [CIT(A)] has deleted the impugned disallowance observing that the payee i.e. St. Xavier’s Alumni Association was recognised by the department as a charitable institution and its income was exempt and therefore, there was no escapement of income and the assessee was not obliged to deduct TDS, since the income of the said institution/payee was not taxable. Decided against revenue. Disallowance u/s 40A(9) for payments made to the employees’ recreation club - AO disallowed the said expenditure observing that the said club was a distinct entity and contribution made by the assessee to the said club was not allowable as business expenditure - CIT-A deleted the addition as relying on own case as held that recreation club was integral part of the assessee itself, where, the contribution was collected from employees and this was matched by the assessee for providing recreational facilities as a measure of employee welfare and since the payments were not made to any third party association or trust, rather, the payments represented expenditure on in-house employee welfare activities, the expenditure was allowable - HELD THAT:- The facts and issues involved in Revenue’s appeal for assessment year 2012-13 & 2013-14 are exactly identical except the amounts involved and our findings, given above, will mutatis mutandis apply to all the captioned appeals. In view of this all the appeal filed by the Revenue are hereby dismissed.
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