2015 (4) TMI 1310

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....her sources and holding that these income are not entitled to be treated as Income from business for computing deduction u/s. 10A. 1. Bank Interest Rs. 1,21,299 2. Job Work Charges Rs. 73,762 3. Exchange difference Rs. 37,95,975 on loans Alternatively (i) Reasonable expenses related to job work charges be allowed on estimate basis and the amount so allowed. be reduced from total expenses and deduction u/s. 10A be revised accordingly. (ii) Exchange difference on loans be netted against related interest and other expenses. 2. The learned Assessing Officer has erred in making addition of Rs. 8,36,437/- being interest calculated @ 18% on credit period to AE beyond 180 days on certain export invoices. Without prejudice : Under transf....

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....upheld the order of Ld. CIT(A). 2.1.2 In the present case Ld. CIT(A) has not granted even the benefit of netting, therefore, respectfully following the earlier decision of the Tribunal we hold that AO should grant netting benefit to the assessee as per decision of Hon'ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. (supra). 2.2 Regarding job work charges, the matter was restored back to the file of AO with the following directions: "8. Following the decision of Hon'ble High Court, we direct the AO to redo the assessment by considering only the net receipt in respect of job work. The expenditure in this respect has to be worked out on the basis of either man hours put in the job work in comparison to the own manufacturi....

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.... allow the claim of the assessee with respect to the working capital loan. 13. In the result appeal of the assessee is partly Respectfully following the aforementioned observations of the Tribunal in assessee's own case we restore this issue also to the file of AO with similar directions. 2.4 Ground No.1 is partly allowed in the manner aforesaid. 3. Apropos Ground No.2, TP adjustment of Rs. 8,36,437/- was made on account of delayed payments received for export proceeds from Associated Enterprise(AE) of the assessee. According to TPO, period of 180 days could be allowed as reasonable and beyond the said period export realization cannot be considered to be at arms length. It may be mentioned here that assessee has exported diamond jewelle....

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.... details regarding "working of interest on delay in import payments". Those payments in excess of 180 days are listed as against impugned interest of Rs. 8,36,437/- worked out on delay in export realization, interest on delay in import payments have been worked out at Rs. 1,10,01,043/-. Thus, it is the case of Ld. AR that when assessee is not making the payment for delay which is much more than 180 days, then how assessee's transaction for receiving delayed export realization can be considered to be not on arms length. Thus, it was pleaded by Ld. AR that adjustment of Rs. 8,36,437/- should be deleted. 3.2 On the other hand, Ld. DR relied upon the order passed by TPO and Ld. CIT(A). 3.3 We have heard both the parties and their contentions ....