TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1679
X X X X Extracts X X X X
X X X X Extracts X X X X
.... take up the appeal of the assessee in ITA No.3563/MUM/2024 for the assessment year 2020-21 as lead matter for adjudication, wherein the assessee has raised following grounds of appeal: "1. The learned Assessing Officer pursuant to the directions of Dispute Resolution Panel has confirmed the order of the Transfer Pricing Officer making an addition of Rs. 2,98,53,254/- on account of interest on interest free short term loans and advance to associate enterprises. 2. The learned Assessing Officer pursuant to the directions of Dispute Resolution Panel has confirmed the order of the Transfer Pricing Officer making an addition of Rs. 1,20,99,880/- on account of guarantee commission. 3. The learned Assessing Officer pursuant to the directions of Dispute Resolution Panel has confirmed the order of the Transfer Pricing Officer making an addition of Rs. 4,17,64,968/-on account of interest related to outstanding receivables. 4. The learned Assessing Officer pursuant to the directions of Dispute Resolution Panel has confirmed the order of the Transfer Pricing Officer disallowing Rs. 7299,36,44,062/- as an expenditure of contingent nature. 5. The learned Assessing Officer pursuant to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee is benefited by virtue of transactions carried out by the subsidiary company. This issue was discussed by the TPO, who observed that the assessee as well as AE's are loss making entities and in such scenario, the AE's would have approached an independent third party like bank, the bank may have charged high rates as the entity is loss making or may even have refrained from giving any loan. Accordingly, TPO had benchmarked the transaction on the basis of LIBOR + 4% rate and had adopted the rate of 5%, which the panel finds reasonable in the facts and circumstances of the case. The aforesaid recommendation of the TPO has been upheld by the DRP and accordingly, upwards adjustment stands confirmed. 9. On the aforesaid issue, it was submitted by the Ld. Counsel that the TPO has recommended interest rate on outstanding receivable @ LIBOR + 4% which is unreasonable and very high whereas, the rate of LIBOR + 2% would be reasonable in terms with the decision of the ITAT, Bangalore in the case of Bioplus Life Sciences (P) Ltd. Vs. Deputy Commissioner of Income Tax (2022) 138 taxmann.com 297 (Bangalore-Trib). 10. On the other hand, the Ld. CIT-DR vehemently supported the findin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2%. The relevantfinding of the co-ordinate bench of the Tribunal in the case ofSwiss Re Global Business Solutions India Pvt. Ltd. (supra),reads as follows: "37. Once we have held that the transaction between theassessee and AE was in foreign currency with regard toreceivables and transaction was international transaction,then transaction would have to be looked upon by applyingthe commercial principles with regard to internationaltransactions and accordingly proceeded to take into accountinterest rate in terms of London Inter Bank Offer Rate (LIBOR)and it would be appropriate to take the LIBOR rate + 2%. Forthis purpose, we place reliance on the judgment of theBombay High Court in the case of CIT v. Aurionpro Solutions Ltd. 99 CCH 0070 (Mum HC). It is ordered accordingly." 6.4 In view of the above co-ordinate bench order of theTribunal in the case of Swiss Re Global Business SolutionsIndia Pvt. Ltd. (supra), we direct the A.O. to calculate theinterest rate on outstanding receivable from AE by adoptingLIBOR + 2%. It is ordered accordingly." 12. In view aforesaid discussion and jurisprudence, we find substance in the contention of the Ld. AR, based on the decision of the ITAT, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to Cylinders Ltd., 378 ITR 57 restricted the corporate guarantee commissionrate to 0.5%. Against the findings of the CIT(A), the Revenue filed appeal before the Tribunal in ITA No.882/Mum/2017 (supra). The Co-ordinate Bench upheld the findings of CIT(A) and dismissed the appeal of Revenue. Similarly, in the assessment year 2013-14, the C1T(A) restricted the corporate guarantee commission rate to 0.5%. The Revenue agitated the issue before the Tribunal in ITA No.5720/Mum/2017(supra). The Tribunal following its earlier order in assessee's own case for assessment year 2012-13 dismissed this ground of appeal. 6. In the impugned assessment year since, the facts are identical to assessment year 2012-13 and 2013-14, we see no reason to take a different view. Consequently, ground No.2 of the appeal is allowed for parity of reasons. 7. In the result, appeal by assessee is partly allowed in the terms aforesaid." 16. In the backdrop of the aforesaid facts and circumstances and the decision of the ITAT, Mumbai in assessee's own case (supra), in absence of any distinguishing material/evidence submitted by either of the parties, since the issue is identical in the case of assessee for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ransactions which were carried out between the said party and assessee, also no evidence were brought on record by the revenue to dislodge the aforesaid assertion by the assessee. Under such circumstances, it is submitted by the Ld. AR that the assessee company is under the liquidation, the records of assessee company would be difficult to fetch, we confirm the addition made to the extent of actual transaction amount for Rs. 7,22,178/- only. The A.O is directed to give effect to the same. Thus, the Ground of appeal No.6 raised by the assessee is partly allowed. 23. In the result, appeal of the assessee in ITA No.3563/MUM/2024 for A.Y.2020-21 is partly allowed. ITA No.2737/MUM/2023 A.Y. 2018-19 24. The present appeal of the assessee for A.Y.2018-19 was earlier filed in ITA No.2123/MUM/2022 through the erstwhile Director of company Shri Kamal K Singh, despite appointment of Insolvency Resolution Professional by the National Company Law Tribunal, Mumbai vide order dated 19.01.2023. Since the appeal was directed to be instituted only through IRP in terms of provisions of Section 140(c)(c) of the Income Tax Act, therefore, the appeal of the assessee was dismissed with the liberty th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....judication in terms with report in Form No. 3CL issued by the DSIR, dated 20.08.2024. Accordingly, we restore the matter to the file of the A.O for fresh adjudication. Thus, the Ground of appeal No.2 raised by the assessee is allowed for statistical purposes. 30. Ground of appeal No.3 pertains to the disallowance of deduction u/s. 80G of the Act. The disallowance u/s. 80G of the Act of Rs. 38 lacs made by the A.O for the reason that the assessee was unable to furnish necessary corroborative evidence to prove that the donations made are entitled for deduction u/s. 80G of the Act. Further, it is also observed by the A.O that fund allocated to CSR does not form part of Section 37(1) of the Act, therefore, the expenditure made out of such fund are not allowable for the benefit of exemption u/s. 80G of the Act. 31. On this issue, the Ld. Counsel submitted that this issue has already been decided by the Co-ordinate Bench of the ITAT, Mumbai in the case of Societe Generale Securities India Pvt. Ltd. Vs. Pr. CIT, ITA No.1921/MUM/2023 for A.Y.2018-19, wherein it has been held that CSR expenses if utilized for the purpose of eligible donations u/s 80G, then the deductions under Section 80G....