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2023 (6) TMI 258 - AT - Income TaxTP adjustment - global/regional management overhead allocation fee - HELD THAT - Considering the similarity of the issue and view taken in the earlier assessment years 2021 (10) TMI 1382 - ITAT HYDERABAD and 2022 (12) TMI 457 - ITAT HYDERABAD by a Co-ordinate Bench, we are of the considered opinion that the interest of justice would be met by restoring this issue to the file of the learned Assessing Officer in view of the need for the assessee to file the additional documentary evidence in support of their claim. Interest on trade receivable - Ends of justice would be met by accepting the interest rate on similar foreign currency receivables/advances as LIBOR 200 points. We direct the AO / learned TPO to adopt the same. Grounds are partly allowed accordingly.
Issues involved:
The issues involved in the judgment are the payment for global/regional management overhead allocation fee and interest on trade receivables. Payment for global/regional management overhead allocation fee: The appellant appealed against the order of the Deputy Commissioner of Income Tax regarding adjustments suggested by the Transfer Pricing Officer. The Appellate Tribunal decided to send the issue back to the Assessing Officer for factual verification based on the need for additional evidence, following the precedent set in earlier assessment years. The Tribunal considered it necessary for the assessee to submit all relevant material for fresh verification. Interest on trade receivables: The Tribunal considered whether interest on trade receivables should be benchmarked separately as an international transaction. The appellant argued that the interest rate should be based on LIBOR+200 points, citing precedents. The Tribunal referred to decisions by the Bombay High Court and various Tribunals, concluding that the interest rate on similar foreign currency receivables should be accepted as LIBOR+200 points. The Tribunal directed the Assessing Officer to adopt this rate, partly allowing the grounds of appeal. Separate Judgment: No separate judgment was delivered by the judges in this case.
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