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2016 (5) TMI 719 - ITAT MUMBAI

2016 (5) TMI 719 - ITAT MUMBAI - TMI - Transfer pricing adjustment - whether the arm’s length interest rate arrived at by the TPO and endorsed by the DRP by adopting USD Corporate Bond Rate and LIBOR interest rate based on external commercial borrowing is justified in the present case or not? - Held that:- The TPO and DRP in our opinion have committed a fallacy, firstly, by considering the AE as a “tested party” and secondly, relying upon USD Corporate Bond Rates to benchmark the ALP of the inte .....

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to benchmark its transaction by taking the financial year data for year 2009-10, but, if such a data were not available then it cannot be held that such a tenor adjustment for taking into time period cannot be made under CUP, if it has been made quite accurately taking into account the material factors relating to time of the transaction affecting the price. We though agree that, a high degree of comparability is required under CUP, but in absence of such a comparable data, a minor adjustment ca .....

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for a credit rating company AA or AA(+) the interest rate is ranging between 11% to 12%, then in the case of the assessee which is admittedly BBB(-) credit rating company, 11.30% interest paid by the assessee to its AE is much within the arm’s length rate. This data/ document from public domain now made available before us is worth relying to benchmark and analyze the current transaction of coupon rate of interest paid/payable on CCDs issued by the assessee. Accordingly, we hold that 11.30% int .....

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e - Decided in favour of assessee

Addition on account of interest accrued in respect of non-performing assets (NPAs) - Held that:- There is no infirmity in treating the interest income on NPAs on realization basis by the assessee qua the three parties, which is in conformity with the RBI guidelines. It is also admitted fact that assessee has shown this income in the subsequent year, hence the dispute is only with regard to timing.

As regards interest component, on account o .....

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ered either by the AO or by the DRP, therefore, same needs verification from the end of the AO to see whether the contention of the assessee is correct that the portfolio was sold at a huge loss in the financial year 2012-13 and no interest has been recovered. Thus, in view of our finding the decision of the AO in compliance with the direction of the DRP is reversed and the ground as raised by the assessee is treated as partly allowed for statistical purposes. - IT(TP) A No. : 7518/Mum/2014 - Da .....

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on 144C(5), vide order dated 16.10.2014. In the various grounds of appeal, the assessee has mainly challenged following issues: (i) Ground No.I -Transfer Pricing Adjustment of ₹ 48,53,19,133/- in respect of interest expenses incurred on account of Compulsory Convertible Debentures (CCDs) issued by the assessee to its AE; (ii) Ground No.II -Disallowance under section 14A for sum of ₹ 2,15,71,424/- after invoking Rule 8D; (iii) Ground No.III -Addition of ₹ 33,73,86,850/- on accou .....

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holds 75% of equity share capital in IDM. The assessee is primarily engaged in the business of identifying investment opportunities in financially distressed companies which otherwise have an inherently viable business proposition. Its business strategy is to acquire and invest in medium sized enterprises that are either very high risk investments or are in financial distress which makes the investment as a very high-risk venture and therefore, its credit rating was also quite low. The funding .....

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ng Regulations. The CCDs issued by the assessee to its AE can be divided into two parts, first, issuance of such debentures prior to June, 2007 bearing a fixed-interest-charge of 7%; and second, issuance of debentures post June, 2007 bearing annual resettable interest rate, which varied from 9.75% to 14%. Accordingly, the average interest rate on the above CCDs issued by the assessee was determined @ 11.30%. In the Transfer Pricing Study Report (TPSR), the assessee in order to benchmark the Arm .....

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d Poor s (S&P) Corporate Rating Criteria, whereby the assessee identified itself rating of BBB(-) from a global perspective. Thereafter a search was carried out for the comparable transaction for the financial year 2009-10 to seek external comparables from databases of Thomson Reuters DealScan, and Bloomberg Databases. Since the assessee had issued CCDs in terms of INR (Indian Rupees) and interest was also payable in terms of INR as India being the borrowing region, therefore, no comparables .....

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length interest rate of 14.50% was arrived at by the assessee, as against average interest rate of 11.3% paid by the assessee. Alternative, the assessee also carried out corroborative search process using Bombay Stock Exchange (BSE) data on INR denominated debt issuances. After various qualitative analysis and keep into consideration the credit rating of the borrower and the time of issuance, two comparable transactions were identified and after carrying out tenor adjustment to factor-in long te .....

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for the assessee assuming a case, where it had to take loan from the lenders in the Indian market. For this purpose, interest rates quoted by various public sector banks on their websites as per there external credit ratings scale were consolidated. Data from the banks like, Bank of India; Canara Bank; Punjab National Bank; Syndicate Bank; Uco Bank and; United Bank of India were taken, whereby, the average rate offered to (BBB) rated entities or below with a loan amount of > ₹ 10 crore .....

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om all the transfer pricing perspective, assessee tried to justify its ALP of interest rate paid/payable to its AEs. 3. The Ld. TPO noted that, assessee had made payment of interest on fully convertible debentures of ₹ 99,06,92,142/- which was in the realm of international transaction with the AE. The payment of interest earned on fully convertible debentures for the financial year 2009-10 have been incorporated in para 5.1 of the TPO s order and from such details, he noted the interest ra .....

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R 5248.9 million. Such a sharp increase in NPAs would have substantially increased the IDM s default risk, thereby necessitating increase in interest rate offered on its borrowings with its AEs. After analyzing the method and the manner in which the assessee had carried out its benchmarking of the interest rate, first of all, the Ld. TPO rejected the entire methodology adopted by the assessee mainly on the ground that, assessee had not pointed out anywhere in its TP Study report, whether it has .....

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he region where AE is located. The assessee has taken the data for the bond rates used in different geographical locations, other than the AE and thereafter has made various adjustments which give skewed results. As regards the reliance of data available from BSE site for identifying the comparable transactions which had issued debt instruments (in INR), he observed that, there are hardly any company which has a credit rating below A . Further, the company has identified two companies namely, St .....

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ing loan transaction. The prevailing rate of interest for foreign currency loan extended in India for companies with similar credit rating as that of the AE on a standalone basis has to be taken into account. In India, many banks extend loan in foreign currency (i.e., FCNR) and from the sites of various banks like Bank of Baroda, he noted that the credit rating of AAA rated customers it is 500 bps over three months USD LIBOR and for AA rated customers it is 550 bps and for A rated customers it i .....

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rty . He straight away held that AE would have earned interest based on USD Corporate Bond Rates for FY 2009- 10. He then took the data of USD Corporate Bond rates and held that, the ALP rate of interest would be at 5.68%. The data has been reproduced by him at pages 12 & 13 and his final conclusion is as under:- The average LIBOR rate during the year was less than 1% therefore companies with credit rating BBB- have borrowed at a rate of LIBOR plus 308 basis points (1% plus 308 basis points) .....

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of ₹ 48,53,19,133/-. 5. Before the DRP, assessee after explaining the entire process as to how the benchmarking of the transaction of interest payment has been done vis-a-vis, the external comparables taken from Thomson Reuters DealScan, and Bloomberg Database and also from the website of Bombay-Stock-Exchange, submitted that looking to the high risk investment in which assessee is involved and being a Schedule BBB(-) rating company, the payment of average interest rate 11.30% on CCDs iss .....

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loans cannot be made applicable. The base rate on which interest rate depends is directly related to the currency of denomination of the issuance. A debt i.e. denominated in a specific currency should be compared to a debt that is, denominated in the same currency. Supply and demand for funds in a specific currency affects the price, that is, the interest rate. Accordingly, the reference rate used for NIR denominated debt should be taken into account considering market conditions prevailing in .....

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o factor-in the differences in the currency of the comparable bond data and the tested transaction, because while the former is in USD and later is in INR. The two currencies have completely different risk profiles. In any debt scenario, the borrower's credit standing determines the interest rates on the debt. Further, various other clarifications and objections on the TPO s order were raised which have been discussed and incorporated in detail by the DRP from pages 12 to 19 of the impugned .....

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se, DRP observed that it is not clear, whether the assessee is the tested party or the AE. To arrive at this conclusion that selection of the tested party is a condition precedent for carrying out transfer pricing analysis of the ALP; the DRP referred to the OECD guidelines as well as UN Practice Manual guidelines on transfer pricing and has even incorporated relevant paragraphs of such guidelines at pages 21 to 23 of the order. Thereafter, the DRP observed that the TPSR of the assessee is very .....

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data base for comparable transactions, the DRP held that, since number of adjustments have been carried out, therefore, the resultant comparable figures cannot be said to be free from defects and it could not be said that final determination of the ALP of comparables was the ideal figure, specifically when the assessee himself admitted that no comparables were available in Indian domain in the aforesaid databases. Regarding data obtained from BSE also, the DRP observed that the data was not avai .....

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ctions undertaken by the assessee is different, because assessee s borrowing is not from the Indian market albeit from AE which is located abroad. The DRP further added that, if benchmarking is done by treating assessee itself as a tested party then also it would not be the best of methodology for benchmarking the international transaction. In the present case AE should be taken as a tested party for the purpose of benchmarking as it would make the computation of the ALP very simple as held by t .....

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which the reliable data is available may be used. Thereafter, referring to Delhi ITAT decision in Ranbaxy Laboratories Ltd. (110 ITD 428) and other decisions on the concept of tested party and reiterating the reasoning of the TPO, Ld. DRP upheld the arm s length rate of 5.68% and thereby the quantum of adjustment made by the TPO as per the discussion appearing from pages 25 to 29 of the impugned order. 8. Before us on behalf of the assessee, Ld. Senior Counsel, Shri J.D. Mistry submitted that, .....

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dering the various debentures series issued, the effective rate of interest paid (in INR) by the assessee to its AE during the year 2010-11 was 11.30%. The main issue here is, whether in such a highly risky investment where the assessee being BBB (-) rating company, can in India anybody will give loan or subscribe to debenture for less than 11%. He submitted that, it would not be possible at least in the Indian scenario. Though, here the assessee has tried to benchmark the interest rate by using .....

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ts, whereby he arrived at arm s length rate of 8.5% and secondly, by adopting US Bond Rate and arrived at an average arm s length rate of 5.68%. The whole exercise done by the TPO is incorrect, because what is required to be benchmarked is the interest rate applicable in India that to be in INR and not in terms of any foreign currency, which makes the entire finding erroneous. This fallacy permeates in his entire approach and finally in making the adjustments. If one goes by the rate of 8.5% arr .....

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ual have been quoted by the DRP, however, the DRP have completely misdirected themselves for not quoting the other relevant parts of OECD and UN Manual, wherein, it has been clearly provided that the concept of tested party will apply only when cost plus (CPM) or resale price (RPM) or transaction net margin method (TNMM) is applied. Under the CUP only the transactions has to be seen and not who is the tested party. This has been clearly provided both in the OECD and under the UN Manual in the sa .....

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orrower is on the basis of INR denominated debt. What needs to be considered is the INR lending data to a borrower in India having same or similar credit rating. In support of his contention, he strongly relied upon the decision of Hon ble Delhi High Court in the case of CIT vs Cotton Naturals India (P) Ltd, reported in [2015] 55 Taxman.com wherein, the Hon ble High Court held that arm s length interest rate should be computed based on market determinant interest rate applicable to a currency in .....

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average rate of interest of more than 15% and hence in such a situation, the assessee s benchmarking of payment of rate of interest at 11.30% has to be treated at arm s length price. He further filed a copy of public issue of secured & non-secured debentures issued by Shriram Transport Finance Co. Ltd. and Tata Capital Ltd. in the year 2009, wherein for AA and AA+ credit rating, the average yield of interest is ranging from 11% to 12%. Thus, assessee being BBB (-), the average rate of inter .....

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ear itself from 9.75% to 14%., which is an increase of around 43% in one year. Once there is no fresh borrowing in this year then how in the course of one year there has been such a huge increase. This factum itself shows that the interest rate paid by the assessee to its AE was not arm s length rate or price. Under transfer pricing analysis, one has to see whether in the third party situation such a huge increase and variation could have been justified or not. He further submitted that, under t .....

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and Tata Capital Ltd. again has not been considered by the TPO as well as by the DRP therefore, in the interest of justice and in all fitness, the matter should be restored back to the TPO to carry out proper analysis under CUP after considering the Indian databases. 11. We have carefully considered the rival submissions, perused the relevant finding given in the impugned orders as well as material placed on record. To succinctly recapitulate the relevant facts, the assessee as its business stra .....

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es (CCDs) which in turn uses these funds to carry out investment activities. These CCDs are raised in terms of Indian Rupee (INR) and even the interest paid on such debt is also in terms of INR only. Since these debts have been taken up by the AE, therefore, the payment of interest on these debts amounting to ₹ 99,06,92,142/- is the subject matter of Transfer Pricing. During the year, the payment of rate of interest has been varied from 9.75% to 14% due to reset clause and the average rate .....

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rnational practices. For this purpose, it first analyzed itself by way of credit estimation exercise of the borrowing entity by using S&P Corporate Rating criteria. Based on such rating, it carried out external comparable of transactions from international data from Thomson Reuters DealScan, and Bloomberg Databases to identify comparable transactions with the debt of the assessee. Since no INR denominated debt were available on these databases, the assessee shortlisted some of comparable tra .....

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ar 2013, therefore, after making tenor adjustment the effective rate arrived was more than 11.3% and hence it was reported that assessee s rate of interest is much within the arm s length margin. It had also undertaken an analysis of interest rates offered by Indian banks to the borrowers during the TP proceedings which showed the average rate of 12.13%. On the basis of such analysis, it was reported that, the assessee s average rate of interest of 11.30% is at ALP. The entire exercise has been .....

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rived at an average interest rate of 8.5%, however, the said rate has not been applied finally for benchmarking the assessee s transaction. The whole premise on which the assessee s analysis has been rejected both by the TPO as well as by the DRP is that, the assessee has not identified the tested party for benchmarking the international transaction. Without identifying the tested party, the whole transfer pricing analysis conducted by the assessee is erroneous as per the TP provisions. As per t .....

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the DRP s order. 12. In wake of this background, the first and foremost issue for our adjudication is whether, while applying the CUP Method, it is necessary to identify the tested party . Although Indian TP regulation does not laid down any specific procedure or guidelines for choice of tested party , however, OECD provides that, as a general rule, tested party should be the one to which transfer pricing method can be applied in most reliable manner and for which most reliable comparables can .....

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price. Product Comparability is the main key factor . Whereas, in the other methods, like Cost Plus, Resale Price or Transactional Net Margin Method, financial indicators like markup on costs, gross margin or net profit indicator is tested and analyzed with an appropriate base. Thus, under these methods, the choice of the tested party becomes far more imperative. That is why, in United Nations Practice Manual on Transfer Pricing, in chapter V, paragraph 5.3.3 dealing with provision of tested par .....

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the tested party should be consistent with the functional analysis of the controlled transaction. Attributes controlled transaction(s) will influence the selection of the tested party (where needed). The tested party normally should be the less complex party to the controlled transaction and should be the party in respect of which the most reliable data for comparability is available. It may be the local or the foreign party. If a taxpayer wishes to select the foreign associated enterprise as t .....

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margin method is described in Chapter II, it is necessary to choose the party to the transaction for which a financial indicator (mark-up on costs, gross margin, or net profit indicator) is tested. The choice of the tested party should be consistent with the functional analysis of the transaction. As a general rule, the tested party is one to which a transfer pricing method can be applied in the most reliable manner and for which the most reliable comparables can be found, i.e. it will most ofte .....

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transaction undertaken by AE, then perhaps, similar transaction by AE with the third party or independent similar transaction in the place of AE could have been analyzed to come to an ALP. The DRP while incorporating the same paragraphs from these guidelines has grievously omitted to incorporate the operating three lines of the same paragraph. Thus, there is no support of the premise or conclusion arrived by the TRP as well as by the DRP in holding that entire transfer pricing and benchmarking .....

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orporate Bond Rate and LIBOR interest rate based on external commercial borrowing is justified in the present case or not. First of all, as stated in the foregoing paragraphs and reiterated several times that the CCDs have been issued in INR denominated debt and the interest paid / payable is also in terms of INR. Once the tested transaction is in INR denominated debt, then interest rate must necessarily be based on economic and market factors affecting Indian currency and data available for deb .....

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demands of funds in a specific currency the price/interest rates for funds denominated in that currency. Hence, cost of borrowing funds denominated in INR or lending rates based on INR loans/debt instrument issuances is more reliable and ideal base for benchmarking similar transactions undertaken by the companies or entities with similar ratings. 14. The TPO and DRP in our opinion have committed a fallacy, firstly, by considering the AE as a tested party and secondly, relying upon USD Corporate .....

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interest rate should be computed based on market determined interest rate applicable to currency in which loan has to be repaid. The relevant observation of the Hon ble High Court in this regard reads as under:- 39. The question whether the interest rate prevailing in India should be applied, for the lender was an Indian company/assessee, or the lending rate prevalent in the United States should be applied, for the borrower was a resident and an assessee of the said country, in our considered op .....

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of the borrower or the lender would vary and are dependent upon the fiscal policy of the Central bank, mandate of the Government and several other parameters. Interest rates payable on currency specific loans/ deposits are significantly universal and globally applicable. The currency in which the loan is to be re-paid normally determines the rate of return on the money lent, i.e. the rate of interest. Klaus Vogel on Double Taxation Conventions (Third Edition) under Article 11 in paragraph 115 st .....

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n India, interest rates on FCNR accounts maintained in foreign currency are different and dependent upon the currency in question. They are not dependent upon the PLR rate, which is applicable to loans in Indian Rupee. The PLR rate, therefore, would not be applicable and should not be applied for determining the interest rate in the extant case. PLR rates are not applicable to loans to be re-paid in foreign currency. The interest rates vary and are thus dependent on the foreign currency in which .....

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is, whether the benchmarking analysis done by the assessee is correct or not and whether the average rate of interest of 11.30% paid by the assessee to its AE is at ALP or not. So far as the assessee s benchmarking analysis as done in TP Study report based on external data using Thomson Reuters DealScan, and Bloomberg Database, we find that such an approach is not correct, firstly, there are no INR denominated debt issuance available on such databases and; secondly, in absence of such a data the .....

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arlight Systems Private Limited and Share Microfin Limited which have a coupon rate of 15% and 13.75%. Since these data belong to year 2013, the assessee had made minor tenor adjustment to factor the time period to arrive at interest rate of 15.97% and 14.05% giving a mean rate of 15.01%. Though the assessee was required to benchmark its transaction by taking the financial year data for year 2009-10, but, if such a data were not available then it cannot be held that such a tenor adjustment for t .....

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for the year 2009, that is, for the same financial year in the case of Shriram Transport Financial Company Ltd. and Tata Capital Ltd., wherein, for credit rating of AA Enterprises the coupon rate of interest per annum was between 11% to 12% for a tenor of 60 months. The yield on redemption is also around 11.25% to 12%. If for a credit rating company AA or AA(+) the interest rate is ranging between 11% to 12%, then in the case of the assessee which is admittedly BBB(-) credit rating company, 11.3 .....

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and consequently ground no. 1 is allowed. 16. The next issue raised vide ground no.2 relates to disallowance of ₹ 2,15,71,424/- made under section 14A r.w. Rule 8D. 17. The brief facts qua the said issue is that, the AO noted that assessee has made investments of ₹ 470,40,12,316/-, however, no dividend income or any exempt income has been received by the assessee during the year. Since assessee had not made any suo motto disallowance of expenditure under section 14A, the AO held tha .....

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ly, since assessee had not earned any exempt income, therefore, no disallowance should be made u/s 14A and; secondly, the investment in shares has been made as part of the regular business activity since it is primarily engaged in making investment in distress companies where there is remote or no chance of earning any dividend income. However, the DRP after detailed discussion upheld the said disallowance. 19. Before us, Mr. J D Mistry submitted that, now in view of the decision of Hon ble Delh .....

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ering the rival submissions and on perusal of the impugned order, we find that, it is an admitted fact that assessee has not earned any exempt income. Once that is so, now in the wake of decision of Hon ble Delhi High Court in the case of Cheminvest Ltd. (supra), no disallowance under section 14A can be made. This decision of Hon ble Delhi High Court is being followed in various cases by this Tribunal. Moreover, in this case, it has been submitted before us that, investee companies are loss maki .....

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terest accrued in respect of non-performing assets (NPAs) for sum of ₹ 33,73,86,850/-. 23. Brief facts qua the issue are that, the AO during the course of the assessment proceedings noted that there was mismatch of TDS amount as per the return of income filed and TDS claimed under section 26AS. The differential amount of interest income which as per the AO had accrued to the assessee from four parties on mercantile basis for sums aggregating to ₹ 33,73,86,850/- should have been decla .....

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tal 3,37,38,685 33,73,86,850 In response to the show cause notice, the assessee s reply was in the following manner: Sr No Name of borrower TDS claimed in ROI by 26AS TDS reflected in form 26AS Differences Remarks 1 Kitply Industries Limited Nil 41,20,200 41,20,000 IDM did not receive any interest from this borrower and no TDS was claimed against the same. Although borrower did not pay any interest to IDM, it deposited TDS there- on in AY 2011-12 2 Brandhouse Retails Limited Nil 86,73,470 86,73, .....

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36,176 4 Ganesh Benzoplast Limited 1,83,04,565 2,50,13,604 67,09,039 Thus, in sum and substance, the assessee s submission was that the income on these loan/debt instruments were booked in financial year 2010-11 due to regulatory norms prescribed by RBI and accordingly, were offered to tax in that year but these parties had provided for the interest in the financial year 2009-10 and deducted the tax accordingly. Thus the difference is mainly a timing difference that gets reversed in the previous .....

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. Accordingly, he taxed the entire interest income of ₹ 33,73,86,850/-. 24. The assessee s case before the DRP was that in the notes of accounts in the financial statements for the financial year 2009-10 it was duly reported/stated as under: Interest income is accounted on an accrual basis. Income on the NPAs is accounted for on a realization basis in accordance with the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 issu .....

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bserving and holding as under:- 7.3 We have considered the above submissions of the assessee and the facts of the case. It is seen that the interest income from i) Kitply Industries Ltd has not been declared by the assessee in the return of income simply because the assessee had not received such interest. Since the assessee is following mercantile system of accounting, actual receipt of interest income is of no consequence and the income has to be taxed on accrual basis, as rightly held by the .....

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accordingly. Thus, the income from the other three parties has also accrued in the current year and is accordingly taxable in the current year on mercantile basis. The assessee's argument that this income (from the other three parties) has been offered in the succeeding year and hence the difference is merely a timing difference that gets reversed in the succeeding year cannot be accepted. The AO has rightly held that in mercantile system, the revenues are to be recognized on accrual basis .....

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see has not demonstrated as to how its investment can be said to be NPA. In view of these facts therefore, these decisions cited by the assessee will not apply to the issue at hand. Therefore, we uphold the action of the AO to tax the interest income on mercantile basis at ₹ 33,73,86.850/-. The objection No. 4 is accordingly rejected . 25. Before us, Mr. J D Mistry submitted that the interest on NPA has been offered to tax on receipt basis as per the RBI Prudential norms which assessee is .....

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ongly relied upon the order of the DRP as well as the AO. 26. After considering the relevant finding given in impugned orders and submissions made by the parties, it is seen that AO has taxed the amount of interest on the ground that assessee should have shown the interest income on accrual basis as per the mercantile system of accounting and not on receipt basis as done by the assessee. The assessee s contention has been that this income specifically from the three parties has been offered in t .....

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ctions "NPA") means: - An asset, in respect of which, interest has remained overdue for a period of six months or more; - A term loan inclusive of unpaid interest, when the installment is overdue for a period of six months or more or on which interest amount remained overdue for a Period of six months or more; - A demand or call loan, which remained overdue for a period of six months or more from the date of demand or call or on which interest amount remained overdue for a period of si .....

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cular on 'Non Banking Financial Companies - Prudential Norms (Reserve Bank) Directions, 1998 reads as under: - "Income including interest / discount or any other charges on NPA shall be recognized only when it is actually realized. Any such income recognized before the asset became nonperforming and remaining unrealized shall be reversed." (Effective from May 12, 1998) Thus, the assessee has recognized the revenue of interest on NPA as per the RBI guidelines which envisages for on .....

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taxed on realization basis even if the interest income is shown on accrual basis after it is not realized, because the banking institutions or NBFC following mercantile system of accounting are permitted to treat the same income as doubtful and they are permitted to keep the same in Suspense Account and it is not necessary that it is brought to Profit & Loss Account of the assessee. After detailed discussion, the Hon ble High Court concluded in the following manner:- 91. We do not find that .....

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Nationalized Bank it treated something which is doubtful, and therefore, kept it in a suspense account, was held to be a permissible exercise. In respect of the loans which are advanced, recovery of some of them if considered doubtful, then, even the interest on the loans advanced may not be realized. That is how the amount is not brought to the profit and loss account because they are not likely to be realized by the bank or a NBFC as well. It is permissible therefore to disclose or to show the .....

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s not been realized by the assessee, the addition was rightly deleted. We, therefore, do not find that the appeal raised any substantial question of law. It is accordingly dismissed. No costs . Thus, respectfully following the ratio of Hon ble jurisdictional High Court which in turn has relied upon the Hon ble Delhi High Court, we hold that there is no infirmity in treating the interest income on NPAs on realization basis by the assessee qua the three parties, which is in conformity with the RBI .....

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