M/s Lotus Labs Pvt. Ltd. v. DCIT, Circle – 4 (1) (1), Bangalore
[Citation -2016-LL-1018-82]
| Citation | 2016-LL-1018-82 |
|---|---|
| Appellant Name | M/s Lotus Labs Pvt. Ltd. |
| Respondent Name | DCIT, Circle – 4 (1) (1), Bangalore |
| Court | ITAT-Bangalore |
| Relevant Act | Income-tax |
| Date of Order | 18/10/2016 |
| Assessment Year | 2010-11 |
| Judgment | View Judgment |
| Keyword Tags | opportunity of being heard • determination of alp • notional interest • rate of interest • tpo |
| Bot Summary: | The Grounds raised by the assessee are as under:- Based on the facts and circumstances of the case, Lotus Labs Private Limited respectfully craves leave to prefer an appeal against the appeal order passed b the learned Assessing Officer hereinafter referred to as the learned AO under 2 IT A No.92/B/2015 section 143(3) read with section 144C(10) of the Income-tax Act, 1961 on the following grounds: That on the facts and circumstances of the case and in law, 1. The order of the learned AO/TPO and directions of the Hon'ble DRP are based on incorrect interpretation of law and therefore are bad in law. The learned TPO and the learned AO have erred, in law and in facts, by considering the outstanding dues from the AEs to be in the nature of loan and not considering the business/commercial expediencies of the arrangement. Without prejudice to our contention that notional interest on outstanding receivables should be not imputed, the learned TPO and the learned AO have erred, in law and in facts, in not objectively selecting the interest rate to determine the arm's length rate of interest applicable for outstanding dues from the AEs. The learned TPO has passed the order at the fag-end of the limitation period and provided inadequate time to the Appellant for submitting replies/objections and that such an order is bad in law and liable to be quashed. Learned AR of the assessee submitted a copy of the Tribunal order rendered in the case of M/s Tally Solutions Pvt. Ltd. Vs. ACIT in ITA No. 1364/B/2011 dated 19.08.2016 and our attention was drawn to Para 5 of this tribunal order and it was pointed out that in that case also, the Tribunal considered the issue of extending credit period for realization of 3 IT A No.92/B/2015 sales to AE and it was held that it is closely linked with the transaction of providing services to the AE and therefore, cannot be treated as an individual and separate transaction of advance or loan. Order pronounced in the open court on the date mentioned on the caption page. |