Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 781 - AT - Income TaxTP Adjustment - interest free loan given to its associated enterprise (AE) - arms length rate of interest - HELD THAT- As decided in THE GREAT EASTERN SHIPPING CO. LTD. [2017 (6) TMI 1207 - BOMBAY HIGH COURT] arm’s length price in the case of loans advanced to AE would be determined on the basis of rate of interest being charged in the country where the loan is received/consumed. The action of the assessee in adopting the bank rate prevailing in Australia is correct d the AO erred in adopting the India bank rate. The loan amount was given in Australia currency as per the promissory note the AE has to return the amount in Australia Dollar. We hold that there was no necessity of ALP adjustment in this case therefore, we direct the deletion of the addition made on this count. Lower authorities have erred in going by the penal interest stipulation in the loan agreement to the corresponding interest benchmark in the overseas market. We go by judicial consistency to delete the impugned identical transfer pricing adjustment(s) Disallowance u/s 14A r.w.r. 8D - assessee has suo moto made the disallowance - HELD THAT:- As already come on record that the impugned sec. 14A r.w.s. 8D disallowance has to be computed going by apportionment formula by determining the expenditure incurred for deriving business as well as exempt income. We therefore deem it appropriate to restore the instant administrative expenditure disallowance issue back to the Assessing Officer for computation of administrative expenditure disallowance going by the proportionate formula as per this tribunal’s co-ordinate bench’s decision MARUTI TRADERS AND INVESTORS VERSUS ACIT, CIRCLE-31, KOLKATA [2019 (1) TMI 258 - ITAT KOLKATA] . We reiterate that we are dealing with indirect head of expenditure which not be strictly apportioned between regular business activities for deriving exempt income. We accordingly accept assessee’s identical grievance raised in both assessment year(s) for statistical purposes in above terms. Education cess and secondary higher education cess u/s 40(a)(ii) r.w.s. 37(1) - HELD THAT:- As decided in Chambal Fertilizers & Chemicals Ltd.. [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] holds that the relevant statutory provision to this effect as well as the CBDT’s Circular issued way back on 18.05.1967 do not include “Cess”. Learned co-ordinate bench’s decision in ITC Ltd. [2018 (11) TMI 1611 - ITAT KOLKATA] also decided the very issue in assessee’s favour. We therefore decline the Revenue’s arguments supporting the impugned disallowance and direct the Assessing Officer to grant necessary relief to the assessee.
|