TMI Blog2022 (4) TMI 1579X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld.TPO is directed to consider the transfer pricing issues de no move in accordance with law and by giving proper opportunity of being heard to assessee. Action of Ld.TPO in imputing interest by taking Indian PLR as against USB LIBOR - HELD THAT:- We have perused the decisions relied by the Ld.AR in the light of submissions advanced by both sides. It is a settled position that interest rates should be the marketer to remind interest rate applicable to the currency concerned in which the loan is to be repaid. We direct the Ld.TPO to compute interest on delayed interest payable based on the currency in which the said interest is payable to assessee. The Ld.TPO cannot apply Indian PLR in this transaction. Interest if any is to be computed it has to be computed by adopting LIBOR. We therefore remand these issue back to the Ld.TPO to recompute the interest on the interest payable to assessee by the subsidiaries/branches by adopting LIBOR. Credit of taxes, deducted at source not granted by AO - HELD THAT:- Both assessee as well as the Ld.DR submitted that, these issues may be remanded to the Ld.AO/TPO to consider it in accordance with the evidence is filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld.DCIT Circle 5(1)(2), Bangalore, for the assessment year 2011-12. 2. Brief facts of the case are as under: 2.1 Briefly, the Ld.AR submitted that, the assessee provides mobile value-added services to telecommunication operators in India and abroad. The services include, ring back tones, contests, jokes and cricketer etc., which enable subscribers to personalise their mobile phones, and thereby enhance user experience. It is submitted that, the assessee enters into a contract with telecom operators in India and abroad for providing services to customers of telecom operators. In respect of customers situated outside India, once the contract is signed with the customer, the assessee establishes subsidiaries in the respective countries for furtherance of its business. The Ld.AR submitted that, the subsidiaries retain a return on cost for the services provided and transfer the rest of the proceeds to the assessee in India. The Ld.AR submitted that, the subsidiaries operate on a cost-plus model for the services rendered by them outside India within their respective territories. 2.2 The Ld.AR submitted that, during the year under consideration assessee entered into ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore did not object for the issue to be remanded. 6. Based on the above submissions, we remand the transfer pricing issues alleged by assessee in ground number 3-7 back to Ld.TPO. The Ld.TPO would analyse the documents/evidence is filed by assessee and understand the business model in order to verify the arm s-length of the international transactions undertaken by assessee. The Ld.TPO is directed to consider the transfer pricing issues de no move in accordance with law and by giving proper opportunity of being heard to assessee. Accordingly ground number 3-7 raised by assessee stands allowed for statistical purposes. 7. In Ground No.8-9 , assessee is challenging the action of Ld.TPO in imputing interest by taking Indian PLR as against USB LIBOR. 8. It is a submission of the assessee that the loans advanced to OnMobile Singapore and OnMobile Indonesia are in Singapore dollars and US dollars respectively. The interest on the said loans are payable in the said currencies. Since the loan have been denominated in foreign currency and interest is payable in the same currency the interest on outstanding interest cannot be imputed by taking Indian PLR. Reliance is plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds are general in nature and therefore do not require any adjudication. 13. Ground No.2 raised by revenue challenging the action of the DRP in directing grant of depreciation of the rate of 60% on NMS CG/TX cards, switches et cetera on the ground that these items do not come within the definition of computer . 14. Both sides submitted that, this issue stands covered in favour of assessee by following decisions of coordinate bench of this Tribunal: for assessment year 2008-09 by order dated 21/02/2014 in ITA No.1175/B/2012 at page 769-774 of PB for assessment in 2009-10 by order dated 13/11/2015 in ITA No. 987/B/2015 at page 780-781 of PB for assessment year 2010-11 by order dated 26/08/2016 in ITA No.1513/B/2015 at page 789-797 of PB 15. It is also submitted that the order passed by this Tribunal for assessment year 2008-09 has been affirmed by Hon ble Karnataka High Court vide order dated 18/01/2021 in ITA No. 340 of 2021 at page 824-826 of PB Based on the above submissions we do not find any merit in the ground raised by revenue. Accordingly this ground raised by revenue stands dismissed. 16. Ground No.3 raised by revenue is challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t development or data processing and the same would be covered under the notification dated 26.09.2000 issued by the Central Board of Direct Taxes. The High Court of Delhi in ML OUTSOURCING P. LTD., supra and MCKINSEY, supra, has interpreted the notification and has held that intention of the legislature is not to constrain or restrict but to enable the Board to include several services of products of similar nature in the ambit of Section 10A of the Act. It has further been held that the notification covers within its ambit even the services which cannot be sent abroad. Thus, the Tribunal has rightly held that the assessee is entitled to benefit of deduction under Section 10A of the Act. Thus, the third substantial question of law is also answered against the revenue and in favour of the assessee. 18. We note that, the disallowance was made by the Ld.AO following his predecessor s opinion for assessment year 2008-09. As the Hon ble Karnataka High Court has upheld the claim of deduction under section 10A, on identical facts for assessment year 2008-09 respectfully following the above view we hold that assessee is entitled to deduction under section 10A of the Act. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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