9911796707
TMI Blog2016 (6) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7,34,345/- being interest receivable by the assessee from its Associate Enterprises (AEs) calculated at the rate of 18% on the credit period beyond 180 days. 3. The assessee company is engaged in the manufacturing of jewellery. During the assessment proceedings, the Assessing Officer (hereinafter referred to as the AO) observed that the assessee had made transactions with its AEs amounting to Rs. 97251676/- and applied TNMM method for determining the Arms Length Price. The AO further observed that the assessee company had granted credit period to AEs beyond 180 days of total invoice value of Rs. 8,55,61,484/-. When asked to explain as to why interest should not be disallowed on credit granted to AE beyond 180 days. The assessee explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, dismissed the appeal of the assessee while relying upon his own order on somewhat similar circumstances in the assessee's own case for A.Y. 2008-09. Being aggrieved by the said order of the Ld. CIT(A), the assessee has come in appeal before us. 5. At the outset, the Ld. A.R. of the assessee has brought our attention to the order of the Tribunal dated 15.04.15 passed in the own case of the assessee for A.Y. 2008-09 in ITA No.431/M/2014 wherein considering the identical issue, the Tribunal observed that there was force in the contention of the assessee that if the assessee had to make payments of imports to some party then, receiving delayed export realization cannot be said to be bearing interest as assessee is already owing much more am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a force in the contention of Ld. AR that if the assessee has to make payment of imports to same party then, receiving delayed export realization cannot be said to be bearing interest as assessee is already owing much more amount to its AE on account of import payments. Therefore, in the interest of justice, we consider it just and proper to restore this issue to the file of AO to examine and verify the facts and if on the dates when the impugned interest is computed in respect of export realization, the assessee is already having obligation to pay to its AE the amount regarding import made by i t then, to that extent interes t cannot be added as TP adjustment. We therefore, restore this matter to the file of AO with a direction to re-ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter is to be examined by the AO as a whole and if bench mark of 180 days is to be taken as the credit period without levy of interest then the AO should adopt the same criteria also in relation to the payments payable by the assessee to its AEs. Thereafter, the AO should do netting off of the interest payable and receivable and to make adjustments of the resultant amount of interest, if any, found, receivable by the assessee. With the above modified directions, the matter is restored to the file of the AO to examine and verify the facts and adjudicate the same as per the directions given above. 9. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 24.06.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
