9911796707
TMI Blog2022 (3) TMI 1504X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee give rise to the following 3 issues:- a) Validity of reopening of assessment u/s 148 of the Act b) Transfer pricing adjustments relating to payment made for services received. c) Transfer pricing adjustment made in respect of loans and advances given to A.E. 2. We heard the parties and perused the record. The assessee is manufacturer and sale of electronic medical equipment. The assessee is a subsidiary of M/s. Mediaid Inc., US. The associated Enterprises (AE) are above said holding company and also one more concern named M/s. Eurocore GMBH, Germany. The assessment of the year under consideration was originally completed u/s 143(3) of the Act on 23.12.2009. The assessment was reopened by the A.O. by issuing notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. A.R. submitted that the assessee company has closed its business, since it incurred heavy loss due to heavy damage caused to its Visakhapatnam plant by the Hud Hud Cyclone. He submitted that the financial statements show that the assessee has not charged depreciation on intangible asset in the books of accounts. However, the details of depreciation, if any, claimed for income tax purposes are not readily available. 7. We heard the parties on this issue and perused the record. From the financial statements furnished in the paper book, we notice that the payment of Rs.3,48,17,228/- towards receipt of services has been capitalized by the assessee as "intangible asset". The fixed asset schedule is available at page 74 of the paper book. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the said rate, the TPO has made TP adjustment of Rs.94,27,093/-. Thus, we notice that the TPO has adopted external CUP for making this transfer pricing adjustment. Before us, the assessee could not furnish any material to controvert the reasoning given by the TPO. 10. However, the AO has computed interest on the closing balance of Rs.8,28,75543/-. The ledger account of Eurocor is available at page 67 of the paper book. We notice that there was opening debit balance of Rs.1,66,99,605/- and during the year under consideration, the assessee has advanced further amounts on various dates. Hence, in our view, the TPO should have computed interest on time basis. Accordingly he was not justified in computing interest for the entire year on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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