TaxTMI 
TaxTMI 
2023 (12) TMI 1518
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....her on the facts and circumstances of the case and in Rs law, the Learned CIT(A) is justified in deleting the disallowance of interest expenses amounting to Rs. 2,71,45,84,179/- without considering the fact that the auditor has allocated the said interest cost of Rs. 2,71,45,84,179/- to cost of project. 2. Whether on the facts and circumstances of the case and in law, the Learned CIT(A) is justified in deleting the disallowance of interest expenses amounting to Rs. 2,71,45,84,179/- by relying on the matching concept for revenue expenditure applies to the interest expenditure incurred during the financial year for the claim of deduction u/s 36(1)(iii) of the Act and ignoring the fact that assessee engaged in the business of real estate and following the percentage completion method for revenue recognition and all the expenses directly related to the project have to be carried over and debited to the cost of project. 3. Whether on the facts and circumstances of the case and in law, the Learned CIT(A) is justified in deleting the disallowance of Rs.6,26,101/- made u/s. 14A of the Act while computing the book profit u/s 115JB of the Act. 4. Whether on the fac....
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....ecember, 2017, for determination of Arm's Length Price of international transaction. The order under Section 92CA (3) of the Act was passed on 31st October, 2018. i. Only Transfer pricing dispute is with respect to the determination of Arm's Length Price of corporate guarantee issued by the assessee for of security cum guarantee of 175 percent of 200 Million USD of Senior Notes issued by the Associated Enterprises. The assessee had an Associated Enterprises in Mauritius by the name of Lodha Developers International Limited which has raised bonds of 200 million USD, listed on the Singapore Stock Exchange. The assessee and its parent company along with its sister concerns had given joint and other guarantee to the bondholders on behalf of its Associated Enterprises. ii. The assessee did not benchmark the above transaction stating that assessee is a shareholder of the Associated Enterprises on whose behalf the guarantee was given and therefore it is a shareholder activity. It was also contended that it is not an international transaction. iii. The learned TPO questioned the assessee that why the adjustment to the extent of bank rate less 0.5% should ....
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....ricing Officer converted the USD 200 million by adopting the bank of exchange rate of Rs.62.53 per dollar which is Rs.1,250 crores. As assessee is joint guarantors along with two other shareholder of the assessee was considered at Rs.416 crores on which guarantee commission rate of 1.16% was applied resulting into total amount of guarantee commission for the whole year was considered at Rs.4.83 crores. The start date of guarantee was 13th March, 2015 and it continued up to 31st March, 2015 for 19 days, he computed the Arm's Length Price of the guarantee commission for the relevant period at Rs.25,17,189/- . Thus adjustment of Rs. 25,17,189/- was made. 06. Accordingly, the order under Section 92CA(3) of the Act was passed on 31st October, 2018. 07. On the basis of the order of the learned Transfer Pricing Officer, the ld AO made the draft of assessment order i. He incorporated TP adjustments ii. During the assessment proceedings, the learned Assessing Officer also invoked the issue that amount of interest paid by the assessee is required to be capitalized to the work in progress. He stated that assessee is following Mercantile System of Accounting and fol....
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....08. Against the draft assessment order assessee did not file any objection before the learned Dispute Resolution Panel and therefore, final assessment order under Section 143(3) read with section 144C (13) was passed on 18th February, 2019. 09.Against the assessment order, the assessee preferred the appeal before the learned CIT (A). The learned CIT (A) passed the appellate order on 20th June, 2022. i. With respect to the adjustment of corporate guarantee commission of Rs.25,17,189/-, the learned CIT (A) following his own decision for A.Y. 2016-17, wherein the same transaction was to be benchmarked and computed the guarantee fee of Rs.0.3523%, directed for this year also the learned Assessing Officer to compute the guarantee fee at the same rate. He rejected other contentions of the assessee with respect to the shareholder activity, guarantee not being an international transaction and no cost incurred by the assessee on issue of guarantee. Accordingly, this ground was partly allowed. ii. With respect to the disallowance of interest expenditure, he followed the decision of the Special Bench, in case of Wall Street Construction Ltd. 102 TTJ 505 and assessee's....
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.... carefully considered the decision of the coordinate bench in case of assessee for earlier and subsequent years covering the issues in appeal. 014. The first and second ground is with respect to the disallowance of interest expenditure. The issue involved in this appeal has been considered in ITA No.1893 for A.Y. 2014-15 dated 26th October, 2022, ITA No.1539 and 1594 for A.Y. 2015-16 dated 30th August, 2022 and further, in ITA No.2335 and 2387 /Mum/2019 for A.Y. 2014-15. We have not been shown any reason to deviate from the above findings and further it is also not shown that there is any change in the facts and circumstance of the case. The order of the learned CIT (A) has considered the decision of the said bench in Wall Street Construction Ltd. 102 TTJ 505. The co-ordinate bench has also looked into the circular no.7 2003 dated 5th September, 2003, examining the impact of insertion of proviso to section 36(1)(iii) of the Act by the Finance Act, 2003, with effect from 1st April, 2004. Therefore, in earlier years the co- ordinate Benches have categorically held that interest expenditure is allowable as deduction to the assessee and should not be added to the cost of the work in....
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....inate Bench, we do not find any merit. Even otherwise, in assessee's own case other than that year it was also decided in favor of the assessee in ITA No. 3035/Mum/2017, for A.Y. 2012-13, dated 3rd June, 2019. Therefore, the identical issue is covered in favour of the assessee by the decision of the co-ordinate Bench in earlier year and subsequent years. Accordingly, respectfully following the decision of the bench ground no.5 of the appeal of the learned Assessing Officer is dismissed. 018. Ground nos.6 to 8, are with respect to the transfer pricing adjustment of international transaction of corporate guarantee. The guarantee transaction was not benchmarked originally by the assessee stating that it is not an international transaction and even otherwise issuing the guarantee to its Associated Enterprises along with other two entities is merely a shareholder activity. However, during the course of assessment proceedings, the assessee benchmarked the transaction by adopting interest saving approach. The interest saving 0.70% was determined on the whole transaction considering the credit rating of Associated Enterprises, the tenure of the agreement, the interest saving compute....