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TMI Blog2023 (7) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... the file of AO and direct him to restrict the disallowance to the quantum of exempt income. Disallowance of Travelling expenses - expenses incurred towards purchase of foreign exchange - HELD THAT:- In our view, the assessee may be provided with one more opportunity to offer explanations. Accordingly, we restore this issue to the file of AO for examining it afresh. Addition of interest income found in ITS data, but not reported by the assessee in the return of income - HELD THAT:- We notice that the assessee has accepted this addition before the AO. Hence we dismiss this ground of the assessee. Addition u/s 41(1) of the Act towards remission of liability - huge sum was due from party for quite long time - HELD THAT:- We notice that the AO has not examined as to whether the above said amount was claimed as expenditure in any of the years, which is the paramount condition for invoking provisions of sec.41(1) of the Act. Accordingly, we are of the view that this issue requires fresh examination. Accordingly, we restore this issue to the file of AO. We also direct the assessee to furnish all the relevant details to AO. Disallowance of set off of short term capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve said years before the Tribunal. 4. We shall first take up the appeal relating to AY 2011-12. The only issue urged in this year relate to the Transfer pricing adjustment made in respect of outstanding loan due from AE located in Dubai. The TPO made adjustment of Rs. 4.66 crores. The Ld DRP has enhanced it to Rs. 10.72 crores. The TPO had taken interest rate @ 10.589% and charged interest on the loan amount of Rs. 88.38 crores. Since the assessee had charged interest @ 5.31%, the TPO made transfer pricing adjustment by adopting differential interest rate of 5.279%. The Ld DRP directed the AO/TPO to adopt interest rate of LIBOR + 500 basis points. It also noticed a difference on the quantum of loan. Accordingly, the Ld DRP directed the AO to compute interest on the loan of USD 2,33,02,194 and convert the interest amount in USD to Rupees by adopting the conversion rate of Rs. 44.65 per dollar. 4.1 We heard ld D.R and perused the record. We notice that these loans have been given in the earlier years. In AY 2009-10 and 2010-11, the assessee did not make transfer pricing study. It was noticed that the assessee had charged interest @ 5.14% and 5.08% respectively in those years, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the file of AO for examining it afresh. 8. The next issue relates to the addition of interest income of Rs. 21,947/- from M/s Reliance infrastructure, found in ITS data, but not reported by the assessee in the return of income. We notice that the assessee has accepted this addition before the AO. Hence we dismiss this ground of the assessee. 9. We shall now take up the appeal filed for AY 2013-14. The first issue relates to the addition relating to transfer pricing adjustment on the outstanding loan. As in 2012-13, the ld DRP directed the AO to compute interest adopting interest rate of SBI PLR + 300 basis points. In 2012-13, we directed the AO to adopt interest rate of average LIBOR + 300 basis points. Following the same, we modify the directions given by Ld DRP and direct the AO to adopt interest rate of average LIBOR + 300 basis points and compute the transfer pricing adjustment accordingly. 10. The next issue relates to the disallowance made u/s 14A of the Act, which was equivalent to 0.5% of average value of investments. However, we notice that the details of quantum of exempt income were not given. It is well settled proposition that the amount of disallowance u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Accordingly, we are of the view that this issue requires fresh examination. Accordingly, we restore this issue to the file of AO. We also direct the assessee to furnish all the relevant details to the assessing officer. 15. The next issue urged by the assessee relates to the disallowance of set off of short term capital gain considering it as bogus/sham transactions. In our view, this issue also requires fresh examination. Accordingly, we restore this issue to the file of AO. We also direct the assessee to furnish all the relevant details to the assessing officer. 16. The next issue relates to the disallowance made u/s 43B of the Act and reducing the same from closing Work in Progress. We notice that the interest was payable to Punjab and Maharashtra Co-operative Bank. We also notice that the interest payable to a co-operative bank was brought within the ambit of sec.43B of the Act with effect from AY 2018-19. Accordingly, we direct the AO to delete this disallowance and consequently, the same is not required to be deducted from the value of Work in Progress. 17. The last issue relates to the disallowance of claim of set off of brought forward loss. In our vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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