2019 (11) TMI 341
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....is Court in ITA 154/2017 deleting the addition on the ground that the TPO has wrongly invoked the provisions of Chapter X of the Act for the said AMP spent. In relation to the issue of deduction under Section 10A, the ITAT has followed its own decision in the Respondent assessee own case for the assessment year 2009-10 and held that the assessee is eligible for the claim of deduction under Section 10A of the Act. It has also relied upon the order of this Court in ITA 154/2017 dated 22.05.2017 which has upheld the findings of the Tribunal for the assessment year 2009-10. Mr. Hossain learned senior standing counsel for the Appellant fairly states that so far as these issues are concerned, they stand concluded by this Court. He further states that Special Leave Petitions have been preferred before the Supreme Court on both the aforesaid aspects which are pending before the Supreme Court. The submission of Mr. Hossain relates to the issue of adjustment on account of interest on delayed receivables. The ITAT has followed its own decision in assessment year 2009-10 and has invoked the decision of this Court in Principal Commissioner of Income Tax v. Kusum Healthcare Pvt. Ltd.,[2017] 398....
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....nterest income appearing in the other income. Once the profitability, as per PBIT, is found to be comparable, there cannot be a separate adjustment for interest income on delayed realisation, which is an integral part of the PBIT figure. (paragraph 12.) As for the Revenue's suggestion that it is to be verified whether the comparable's include interest income, if any, all one can say is that the statutory provisions require the interest income, unless it is an interest income of the finance and banking companies, to be included in the other income which is taken into account for computing PBIT. The presumption, therefore, is that the accounts are drawn up as per the statutory requirements, and the exclusions from 'other income' are specifically discussed on the facts of each case, and as such constitute integral part of the transfer pricing documentation. There is nothing on record to show these exclusions. (paragraph 15)* As regards the contention that normally all interest incomes are excluded in the computation of PBIT as such incomes rarely constitute operational income, there* is no need to be guided by such hypothesis and generalities. There is nothing on the r....
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....every anti-abuse legislation, whether SAAR (specific anti-abuse rule)or GAAR [general anti-abuse rule] is a legislation seeking the taxpayers to organize their affairs in a manner complaint with the norms set out in such anti-abuse legislation. An anti-abuse legislation does not trigger the levy of taxes; it only tells you what behavior is acceptable or what is not acceptable. What triggers levy of taxes is non-compliance with the manner in which the anti-abuse regulations require the taxpayers to conduct their affairs. In that sense, all anti-abuse legislations seek a certain degree of compliance with the norms set out therein. It is, therefore, only elementary that amendments in the anti-abuse legislations can only be prospective. It does not make sense that someone tells you today as to how you should have behaved yesterday, and then goes on to levy a tax because you did not behave in that manner yesterday. (paragraph 36) When this is put to the Department, his stock reply is that the amendment only clarifies the law, it does not expand the law. (paragraph 37). Well, if the 2012 amendment does not add anything or expand the scope of international transaction defined under ....
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....that working capital adjustment would not subsume adjustment on account of overdue receivables is no more good law. Support, in this regard is found from the Hon'ble jurisdictional High Court's decision in case of Kusum Healthcare (supra) wherein Hon'ble High Court has "10. The Court is unable to agree with the above submissions. The inclusion in the Explanation to Section 92B of the Act of the expression 'receivables' does not mean that de hors the context every item of 'receivables' appearing in the accounts of an entity, which may have dealings with foreign AEs would automatically be characterised as an international transaction. There may be a*delay in collection of monies for supplies made, even beyond the agreed limit, due to a variety of factors which will have to be investigated on a case to case basis. Importantly, the impact this would have on the working capital of the Assessee will have to be studied. In other words, there has to be a proper inquiry by the TPO by analysing the statistics over a period of time to discern a pattern which would indicate that vis-a-vis the receivables for the supplies made to an AE, the arrangement reflects an internationa....