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2021 (2) TMI 1016 - AT - Income TaxTP Adjustment - interest on delayed export proceeds receivable by the assessee from its AEs - HELD THAT:- Facts involved in the appeal of the assessee for the year in question are in parity with those as were there before the Tribunal in the case of its abovementioned ‘sister concern’, viz. Dania Oro jewellery Pvt. Ltd. Vs. DCIT-9(3)(1) [2018 (1) TMI 240 - ITAT MUMBAI] As the weighted average delay in realisation of the sale proceeds by the assessee from its AEs is less than that involved in realisation of the sale proceeds from the non-AEs, and the assessee adopting a uniform policy had not charged interest in either case, thus, finding ourselves in agreement with the view taken by the Tribunal in the aforesaid case, we respectfully follow the same. Accordingly, we herein and direct the A.O/TPO to vacate the transfer pricing adjustment of ₹ 1,07,01,654/- made towards interest on delayed export proceeds receivable by the assessee from its AEs. TP adjustment - computing the impugned adjustment LIBOR+ 200 basis points (2.583%) instead of the base rate of State Bank of India i.e 10.81% - We find is rendered as infructuous, for the reason, that the transfer pricing adjustment as regards the delayed realization of sale proceeds by the assessee from its AE had been vacated by us while disposing off its additional ground of appeal. Addition/disallowance under Sec. 2(24)(x) r.w.s 36(1)(va) - delayed the payments made in respect of the employees contributions to PF and ESIC by failing to deposit the same within the due dates (including the grace period) - HELD THAT:- On a perusal of the judgment of the Hon’ble High Court of Bombay in the case of CIT (Central), Pune Vs. Ghatge Patil Transport Limited. [2014 (10) TMI 402 - BOMBAY HIGH COURT] both the employers and the employees contributions to the various employees welfare funds are covered under Sec. 43B of the Act. In our considered view, as the employees contribution towards PF and Employees State Insurance therein aggregating to ₹ 8,65,227/- was deposited by the assessee prior to the ‘due date’ of filing of its return of income hence, the same was not liable to be disallowed under Sec. 2(24)(x) r.w.s 36(1)(va) of the Act. Our aforesaid view is further supported by a subsequent order of Hon’ble High Court of Bombay in the case of Geekay Security Services (P) Ltd. Vs. DCIT [2018 (12) TMI 702 - BOMBAY HIGH COURT] Disallowance under Sec. 36(1)(iii) of the interest expenditure attributable to the interest free advances that were given by the assessee company to its directors - HELD THAT:- we concur with the claim of the ld. A.R that in case the interest free funds available with the assessee were sufficient to justify the loans advanced to the directors, it could safely be presumed that the same were made by the assessee from the interest free funds available with it. At the same time, we find that the claim of the assessee that it had sufficient self owned funds to justify the loans advanced to the aforesaid directors need to be verified on the part of the assessing officer, and if the said claim is found to be in order then no disallowance under Sec. 36(1)(iii) would be called for in its hands. Deduction u/s 10A computation - not including the interest income while computing the assessee’s entitlement for deduction under Sec. 10A - HELD THAT:- We direct the A.O to consider interest income as a part of the eligible profits of the assessee’s business for computing its deduction under Sec. 10A . Not considering claim that the unrealised export turnover as and when realised should be considered as forming part of its export turnover for the purpose of computing its deduction under Sec. 10A - HELD THAT:- As perused the order of the Tribunal in the assessee’s own case for A.Y. 2010-11 [2018 (5) TMI 130 - ITAT MUMBAI] ,we respectfully follow the same. Accordingly, we herein set aside the aforesaid matter to the file of the A.O, with a direction to consider any sum realised out of the unrealised export sales as part of the assessee’s export turnover for the purpose of computing its deduction under Sec.10A of the Act, as and when the same is received as per the extant guidelines of the Reserve Bank of India.
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