AI Drafter 
TaxTMI 
TaxTMI 
2023 (6) TMI 1349
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....022 and ITA No. 2041/Mum/2010 on 23.03.2022. 2. Thereafter, the assessee company filed miscellaneous application vide MA No. 327/Mum/2022 on the issue of transfer pricing adjustment with respect of charging interest for extended credit period to the associated enterprises of the assessee and on the issue relating to claim of deduction u/s 10A of the act. The assessee submitted that in respect of transfer pricing adjustment with respect to charging interest on credit period extended to AE, the assessee has relied on the decision of Hon'ble Jurisdictional High Court as well as ITAT Mumbai in the case of CIT-9 Vs Indo American Jewellery Ltd. ITA No. 1053 of 2012 dated 08.01.2013 and decision of Hon'ble Bombay High Court in the case of CIT-1....
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....8.901/- respectively; should not be excluded from export turnover for the purpose of computing deduction u/s 10A disregarding the provisions of 2(iv) to Sec. 10A of I.T. Act, 1961. 4. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the Assessing Officer be restored. 6. Grounds of appeal as per the assessee's appeal as under. 1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred confirming addition of Rs. 89,04,156 towards interest at a rate of 4.20% [as against Rs. 1,35,68,237 by the Assessing Officer pursuant to the order of the Pricing Officer passed u/s 92CA(3)] to the total income of the Appellant ....
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....t on delayed payments. The TPO has made adjustment to the amount of Rs 1,35,68,237/- on account of arms length price in respect of credit period extended by the assessee to its associates Enterprises in USA. The TPO had taken the stand that for extending credit period to its associated enterprises the assessee was required to charge the interest. The TPO has taken the LIBOR rate of 3.40% and the amount loaded on it was plus 300 points (6.40%). 8. The assessee has filed appeal before the CIT(A) . The CIT(A) has partly allowed the grounds of appeal of the assessee, holding that USD LABOR rate at that point of time being 3.40% with a mark up of 80 basis point would be adequate for determining ALP interest for trade credit which can reasonab....
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....e order dated 23.03.2002 at Para 9 of the order has also mentioned that the assessee granted extended credit periods to non-associated enterprises without charging any interest on delayed payment. 10.1 In this regard we have perused the decision of Hon'ble Bombay High court in the case of CIT v/s M/s Indo American Jewellery Ltd. as referred Supra, relating operating part is reproduced as under: "However, in the facts of the present case, the specific finding of the ITAT is that there is complete uniformity in the act of the assessee in not charging interest from both the Associated Enterprises and Non Associated Enterprisesdebtors and the delay in realisation of the export proceeds in both the cases is same. In these circumstanc....
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....sis. 12. Claim of deduction u/s 10A (Grounds of appeal No. 3 of the Assessee and Revenue. 12.1 The assessee submitted that for the purpose of computing the export turnover u/s 10A of the Act, the assessing officer has incorrectly reduced the expenditure incurred in foreign currency on telecommunication charges amounting to Rs 3,63,59,691/- and expenses incurred in foreign currency in providing technical services outside of India amounting to Rs 303,52,68,901/- 12.2 During the course of appellate proceedings the assessee has specifically submitted that the foreign currency expenses were never recovered from the customer, therefore same were not formed part of export turnover or total turnover. Therefore the question of any adjustmen....
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.... Mahindra Ltd. as referred (Supra) wherein held that expenses incurred in foreign currency on telecommunication charges and providing technical services outside India should be excluded from total turnover for the purpose of computation of deduction u/s 10A of the Act. We have also perused the decision of Hon'ble high Court of Karnataka in the case of Tech Mahindra Ltd. in ITA No. 205-206/2011 wherein also on the similar proposition it has been held that the impugned expenditure has to be excluded from the total turnover. During the course of assessment proceedings, assessee has also placed on record written submission that it has not separately recovered any freight telecommunication charges or insurance attributable to the delivery of the....