2015 (2) TMI 1126

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....s income by the AO? (ii) Whether the ITAT has erred in law and on facts in deleting the addition of Rs.10,11,786/- respecting ALP adjustment on account of interest on inter-cooperate deposit? 3. The Revenue urges that the Income Tax Appellate Tribunal's (ITAT) findings with respect to treatment of Rs.3,46,00,000/-, being non refundable deposit, it is not justified in law. It relies upon the decision of the Division Bench of this Court in New Holland Tractors (India) Pvt. Ltd. vs. The Commissioner of Income Tax, Delhi-V (ITA No.182/2002 decided on 25.09.2014). It is urged that the amount ought to have been treated as a revenue receipt instead of assessee's contention that it ought to have been amortized over the period of time or sprea....

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.....e. Assessment Year (AY) 2007-08. Therefore, keeping in view the Supreme Court's ruling in CIT vs. Excel Industries Ltd. 2013 (358) ITR 295, it is held that the reconsideration of an issue, especially since it pertains to the method of treating a class of receipt, would not be appropriate. 6. The last question urged by the Revenue pertains to the adjustment of Rs.10,11,786/- on account of the alleged difference in interest. The facts are that the assessee in the course of his overseas operation advanced amount to three of his subsidiaries at 7.33% per annum. These advances were made without any security; the Transfer Pricing Officer (TPO) directed and the DRT confirmed the adjustment on three counts i.e. lower rate of interest; transacti....

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....n foreign currency loans being qualitatively different, even if we have to see the interest that the assessee would have earned on foreign currency loans and not rupee denominated loans." 8. The ITAT has also taken note of the fact that two specific comparables of USD borrowings i.e. L&T and Seri Infrastructure, on the interest rate of Libor had been taken into consideration. There is no material whatsoever, save and except for vague observations about weak financials of the subsidiaries - which are not supported by any specific facts and proceed on sweeping generalizations and assumptions, to reject the comparables taken by the assessee. When a Transfer Pricing Officer rejects comparables taken by the assessee, he has to set out specifi....