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2020 (3) TMI 111 - ITAT MUMBAITP Adjustment - international transactions of the assessee with its AE’s - HELD THAT:- We are of the considered view that the Ld.CIT(A) has rightly deleted additions made by the Ld. AO towards TPA, as suggest by the TPO u/s 92CA(3) of the Act, in respect of international transactions of the assessee with its AE’s. Hence, we are inclined to uphold the findings of the Ld.CIT(A) and reject ground taken by the revenue. Notional interest charged on export receivables from AE’s for extended credit period - HELD THAT:- We find that the Tribunal had considered an identical issue for AY 2005-06 & AY 2008-09, where under identical set of facts, it has been held that when, the assessee is not charging interest, either from the AE or from the third parties towards extended credit period, the Ld. AO/TPO was incorrect in charging notional interest on receivables from the AE’s for extended credit period without considering the impact of payables to AE’s, in respect of various services. In this year, the Ld.CIT(A) has recorded categorically finding that if, credit period extended to AE’s for receivables and credit period taken by the assessee for making payments to AE’s for payables is netted of then, the credit period allowed to AE is less than four days and which is less than the credit period allowed to non AE’s. Therefore, no adjustment is required, in respect of interest on receivables from AE’s. We, further noted that as a matter of fact, the assesse does not charged any interest, either from the AE, or from the non AE’s towards extended credit period. CIT(A) was right in deleting additions made by the Ld. AO towards TPA on account of notional interest on receivables from AE’s and hence, we are inclined to uphold the findings of the Ld.CIT(A) and reject ground taken by the revenue. Disallowances of deduction u/s 10A in respect of profits earned by the eligible units in view of erstwhile provisions of section 10A(9) - HELD THAT:- We find that the Tribunal has considered an identical issue for AY 2005-06 & 2008-09 [2019 (1) TMI 1128 - ITAT MUMBAI] and after considering the amendment made by the Finance Act, 2003, provisions of section 10A of the Act, held that omission of sub-section (9) of section 10A by the Finance Act, 2003 would effectively meant that the provision never existed in the statute and consequently, the assessee is entitled for deduction towards profit derived from eligible units u/s 10A - we are of the considered view that the Ld.CIT(A) was right in deleting additions made by the Ld. AO towards disallowances of deductions claimed u/s 10A of the I.T.Act, 1961, in respect of profits earned by the eligible units and hence, we are inclined to uphold the findings of the Ld.CIT(A) and reject ground taken by the revenue. Disallowances of depreciation on intangibles representing acquisition of business contracts - HELD THAT:- We find that the Tribunal has considered an identical issue for AY 2008-09 [2019 (1) TMI 1128 - ITAT MUMBAI] where under identical set of facts, it has bench held that the assessee has acquired contractual rights, which no doubt is a valuable commercial right and hence,it comes within the meaning of intangible assets, as per section 32(1)(ii) r.w. Explanation 3(b) of the Act and hence, the assessee is entitled for depreciation on said intangibles at the rate applicable to intangible assets. In view taken by the Tribunal in assessee own case, we are of the considered view that the Ld.CIT(A) was right in deleting additions made by the Ld. AO towards disallowances of depreciation on intangibles and hence, we are inclined to uphold the findings of the Ld.CIT(A) and reject ground taken by the revenue Restrict disallowances to 10% of total expenditure claimed under the head other expenses.
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