Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 1155 - ITAT KOLKATATP Adjustment - comparable selection - exclusion of comparables, EInfochip Ltd. and Thirdware Solutions Ltd. - HELD THAT:- Referring to international transactions of software development services the above two companies should be excluded from the list of comparables for the purpose of computing ALP The assessee claims that, the TP ad ustment made in this regard would have to be deleted, if these two companies are excluded from the list of comparable companies. The TPO may verify this claim of the assessee and allow the claim if found correct. In the result, this ground of the assessee is allowed for statistical purposes. Adjustment made on account of outstanding receivable in excess of 60 days, considering the outstanding receivable as a deemed loan to AE - HELD THAT:- As relying on KUSUM HEALTH CARE PVT. LTD. [2017 (4) TMI 1254 - DELHI HIGH COURT] we uphold the contention of the assessee that the working capital ad ustment in this case, subsumes the ad ustment that is required to be made on account of interest on outstanding receivables. Hence, this ad ustment made by the TPO is hereby deleted and this Ground of the assessee is allowed. International transaction of guarantee fees paid to Associate Enterprises (AEs) - HELD THAT:- We find that the assessee has offered 1.5.% as corporate guarantee to its AEs, which is based on an internal CUP, which is the guarantee rate charged by the IDBI to the assessee company. Even under the Safe Harbor Rules, if the guarantee is provided to a subsidiary and the commission or fee declared is at the rate not less than one per cent per annum on the amount of guarantee. In this case, 1.5% rate of commission is charged by the assessee. In our view, this should be considered as at arm’s length. The TPO has determined the ALP at three per cent, on an adhoc basis. After considering the facts and circumstances of the case, we direct the deletion of this adjustment as in our view. In the result, this ground of the assessee is allowed. Disallowance of bad debt and write off of sundry balances/advances - HELD THAT:- Assessing Officer in the final assessment order restricted the disallowance to ₹ 12,647/- being amounts paid to employees, which cannot be recovered and amount of ₹ 3,48,645/- receivable from group entities and an amount of ₹ 15,60,871/- receivable from clients. In our view, the receivables from clients and intra group entities have definitely been routed through the profit and loss account. Otherwise they would not be trade receivables. The balances in employee accounts, who have left are also not receivables. As relying on TRF. LTD. [2010 (2) TMI 211 - SUPREME COURT] we delete the disallowance in question and allow this ground of the assessee.
|