TaxTMI 
TaxTMI 
2024 (12) TMI 1800
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.... of the Act pursuant to the directions of Ld. Dispute Resolution Panel-2, Bengaluru (DRP) u/s 144C(5) dated 28-09-2018. Since the assessee carried out certain international transactions as well as specified domestic transactions with its Associated Enterprises (AE), the same were referred to Ld. DCIT (TPO)-1(1), Chennai (TPO) for determination of Arm's Length Price (ALP). The Ld. TPO passed an order u/s 92CA (3) on 31-10-2017 proposing certain Transfer Pricing (TP) adjustment. Incorporating the same, a draft assessment order was passed on 28-12 2017 which was subjected to assessee's objections before Ld. DRP. Pursuant to the directions of Ld. DRP, final assessment order was passed against which the assessee is in further appeal before us. ....
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....3, the bench, in para 8.4, restricted the ALP adjustment to 0.5%. Following the consistent view of Tribunal, we direct Ld. AO to compute TP adjustment @0.5% of Corporate Guarantee. The corresponding grounds stand partly allowed. 3. Disallowance of Interest Expenditure 3.1 This disallowance was computed by Ld. AO since the assessee had made equity investment of Rs.2541.56 Crores in its subsidiary entity viz., M/s Aban Holdings Pte. Ltd. (AHPL). The assessee had capital & reserves for Rs.2180 Crores whereas its loan funds were Rs.6047 Crores. The assessee claimed interest expenditure of Rs.159.39 Crores. The assessee submitted that the investments were out of commercial expediency and dividend earned on the investments would be taxable ....
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....ssessee is in further appeal before us. 4.2 The Ld. AR has submitted that only those investments are to be considered which have yielded any exempt income during the year. Accepting the same, we direct Ld. AO to computed indirect expense disallowance u/r 8D(2)(iii) accordingly. The interest disallowance would be re-adjudicated considering the interest disallowance, if any, as made u/s 36(1)(iii). The grounds raised by the assessee stand partly allowed. 5. Tax Credit u/s 90 5.1 The assessee claimed credit of withholding tax of Rs.117.02 Lacs as deducted by Singapore Tax Authorities. The same was deducted from interest income of Rs.929.10 Lacs as earned by the assessee from AHPL. The assessee claimed the credit as per India-Singapore....