TaxTMI 
TaxTMI 
2020 (12) TMI 1161
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.... by the revenue. The subject matter of the appeal pertains to the Assessment Year 2006-07. The appeal was admitted by a Bench of this Court vide order dated 06.01.2015 on the following substantial questions of law: "(1) Whether the Appellate Authorities were correct in holding that telecommunication expenses and traveling expenses incurred in foreign currency reduced from export turnover has to be reduced from total turnover for computing deduction under Section 10A of the Act in the absence of any provisions in Section 10A of the Act which requires the concerned expenses to be reduced from total turnover also? (2) Whether the Tribunal on the facts and in circumstances of the case was correct in setting aside the arms leng....
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.... 15 Crores. Therefore, with prior approval of the Commissioner of Income Tax (Appeals), Bangalore-I, Bangalore, a reference was made to the Transfer Pricing Officer to determine the arms length price as per Section 92CA of the Act. The order dated 27.10.2009 under Section 92CA of the Act was passed by the Joint Director, Transfer Pricing-II, Bangalore, by which it was held that adjustment to the arms length price to the extent of Rs. 1,04,96,20,245/- is required to be made under Section 92CA of the Act. 3. The order of the Transfer Pricing Officer was sent to the assessee vide communication dated 13.11.2009 in order to enable the assessee to respond to the order. Thereafter, the assessee disputed the draft assessment and preferred object....
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....005-06 and 2008-09 and therefore, the same cannot be disputed for the Assessment Year 2006 07 while determining the interest at the arms length price. Accordingly, the transfer pricing adjustment on account of interest on external commercial borrowings was set aside. In the aforesaid factual background, the revenue has filed this appeal. 4. Learned counsel for the assessee, at the outset, submitted that the first substantial question of law has already been answered against the revenue by a decision of the Supreme Court in 'COMMISSIONER OF INCOME TAX, CENTRAL-III VS. HCL TECHNOLOGIES LTD.' in Civil Appeal Nos.8469 90/2013. The aforesaid aspect of the matter could not disputed by the learned counsel for the revenue. 5. I....
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....he rate of interest applicable between the unrelated parties. It is also submitted that the finding of the Tribunal by placing reliance on the order passed by the Transfer Pricing Officer for the Assessment Year 2008-09 is perverse. 7. Alternatively, it is submitted that even assuming that the issue with regard to rate of interest was adjudicated in the previous years, the Tribunal ought to have appreciated that the principles of res judicata are not applicable and each Assessment Year is a different unit. It is submitted that if any mistake / error in the application of law, if at all is committed, the same could not be perpetuated for the Assessment Year in question. It is also argued that the transfer pricing issues have to be dete....
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....9. We have considered the submissions made on both sides and have perused the record. Section 10B deals with determination of Arms Length Price under Section 92C of the Act. In the instant case, the assessee had calculated the rate of interest at 7.50% and 8.49%. However, the Assessing Officer has scaled down the same to 5.67%. It is pertinent to mention here that Reserve Bank of India has given the approval in respect of the rate of interest and the approval given by the Reserve Bank of India with regard to rate of interest is a relevant factor while determination of the rate of interest. It is equally well settled that rate of interest should be determined on the basis of rate of interest prevailing at the time of availing the loan. From ....