TMI Blog2021 (2) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of determining the ALP adjustment regarding its international transactions. Instant vth substantive ground (supra) is restored back to the TPO Addition of interest receivables - amounts due from overseas associate enterprises - taxpayer's plea was that its overseas receivables to its AE(s) were much more than amounting to ₹ 11.59 crores and therefore, even if it is held interest is to be charged from both ends, the net result would come in negative only - HELD THAT:- We find no merit to sustain the impugned addition/adjustment. Suffice to say, neither the TPO's order nor DRP's directions forming subject matter of the instant issue make it clear as to how the alleged interest rate of 14.75% had been adopted by drawing support from the relevant market comparables. Learned counsel referred us to assessee's pleadings that the lower authorities have been guided by SBI's short term interest rates to arrive at this figure. We see no reason to concur with this bench mark since we are dealing with international transactions with overseas associate enterprises having receivables from both sides involving international currency denomination w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d erred in arriving at the total income from the other liners at ₹ 7,55,03,382/-. vi. The Ld. DRP ought to have considered that the miscellaneous income of ₹ 6,48,39,254/- was derived for the allied services and not for the liners handled by the appellant. The said receipt cannot form part of the commission from the other liners. vii. As alternate the Ld. DRP ought not to have considered the gross amount of ₹ 6,48,39,254/- as a part of Income relating to other liners without considering that appellant incurred expenditure of ₹ 4,06,37,577 on deriving the miscellaneous income. viii. The Ld. DRP erred in directing the A.O. to work out the margin of profit at 11.36% of the gross receipts and the A.O. erred in determining the adjustment at ₹ 5,77,88,600. ix. The Ld. DRP erred in holding that the interest income on the trade receivables is to be estimated at the rate adopted by the SBI on short term deposits. x. The Ld. DRP erred in holding that the entire amount of ₹ 6,05,53,454/- paid by the appellant to Seaways Shipping and Logistics Ltd., does not represent reimbursement of the expenses. xi. The Ld. DRP ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vel that the impugned income is not relevant for determination of ALP pertaining to international transactions with the AE(s) it would not be considered in the said consequential computation exercise. Learned counsel has also placed on record the TPO's order for very next A.Y. 2015-16 stating he had himself excluded identical misc. income for the purpose of determining the ALP adjustment regarding its international transactions. Needless to say, the AO shall also take note of all these subsequent developments on this issue. Assessee's instant vth substantive ground (supra) is restored back to the TPO in aforementioned terms. 4. Next comes the issue of interest on receivables of ₹ 6,77,226/- qua amounts due from overseas associate enterprises of ₹ 1,93,29,066/-. We notice from a perusal of para 7.8 of TPO's order dated 27th March, 2007 that he had adopted interest rate of 14.75% on assessee's international transaction going by the SBII's short term fixed deposit rates. 4.1. The taxpayer's plea in turn was that its overseas receivables to its AE(s) were much more than amounting to ₹ 11.59 crores and therefore, even if it is held inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's own case for the assessment year 2013-14. The relevant observation of the Tribunal is extracted hereunder for the sake of reference: 7. Having carefully examined the orders of authorities below in the light of rival submissions and relevant provisions and various judicial pronouncements, we find that by virtue of the insertion of section 92BA on the statute as per clause (i), any expenditure in respect of which payment has been made or is to be made to person referred to in clause (b) of sub-section 2 of section 40A exceeds the prescribed limit, it would be a specified domestic transaction for which AO is required to make a reference to TPO under section 92CA of the Act for determination of the ALP. In the instant case, since the transaction exceeds the prescribed limit it becomes the specified domestic transaction for which reference was made by the AO to the TPO under section 92CA for determination of the ALP. Consequently, the TPO submitted a report which was objected to by the learned counsel for the assessee and filed a objection before the DRP. Having adjudicated the objections, the DRP has issued certain directions and consequently the AO passed an order. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered as a law that never exists and therefore, when the assessment orders were passed in 2006, the AO was not justified in taking note of a provision which was not in the statute book and denying benefit to the assessee. The whole object of such omission is to extend the benefit under Section 10B of the Act irrespective of the fact whether during the period to which they are entitled to the benefit, the ownership continues with the original assessee or it is transferred to another person. Benefit is to the undertaking and not to the person who is running the business. We do not see any merit in these appeals. The substantial question of law is answered in favour of the assessee and against the revenue. Accordingly, the appeals are dismissed. 9. From the aforesaid judgments, it has become abundantly clear that once a particular provision of section is omitted from the statute, it shall be deemed to be omitted from its inception unless and until there is some saving clause or provision to make it clear that action taken or proceeding initiated under that provision or section would continue and would not be left on account of omission. 10. In the instant case, undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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