Transfer Pricing Adjustment for Interest on Outstanding Receivables: Matter Remanded for Working Capital Adjustment Consideration
Summary in Key Points:
- Issue: The Transfer Pricing Officer (TPO) made an adjustment for interest on outstanding receivables from Associated Enterprises (AEs), arguing that the assessee failed to prove these were closely linked to normal sales transactions.
- Facts: The assessee, a biosimilar company, had outstanding receivables from AEs. The TPO treated these as separate capital financing transactions requiring separate benchmarking. The assessee argued that a working capital adjustment could eliminate the need for this adjustment.
- Decision: The ITAT held that:
- The assessee had the onus to prove the link between outstanding receivables and normal sales, which they failed to do. Therefore, separate benchmarking was correct.
- However, since the working capital adjustment argument was not presented earlier, the matter was remanded to the TPO.
- Directions: The TPO was directed to allow the assessee to demonstrate that a working capital adjustment, if made in accordance with the law, would eliminate the need for the interest adjustment on overdue receivables.
Analysis:
- The ITAT, while upholding the principle of separate benchmarking for outstanding receivables, provided the assessee with an opportunity to present their working capital adjustment argument.
This case highlights the importance of presenting all relevant arguments and supporting evidence during transfer pricing assessments. It also emphasizes the need for tax authorities to consider all aspects of the transaction, including potential adjustments like working capital adjustments, before finalizing transfer pricing adjustments. This decision ensures a more comprehensive and fair assessment of the arm’s length price in transfer pricing cases.
IN THE ITAT BANGALORE BENCH ‘A’
Biocon Biologicals Ltd.
v.
Assistant Commissioner of Income-tax
Prashant Maharishi, Vice president
and Prakash Chand Yadav, Judicial member
and Prakash Chand Yadav, Judicial member
IT(TP) A No.1590 (Bang) of 2024
[Assessment Year 2020-21]
[Assessment Year 2020-21]
DECEMBER 23, 2024
Padamchand Khincha, CA for the Appellant. D.K. Mishra, CIT(DR)(ITAT) for the Respondent.
ORDER
Prashant Maharishi, Vice President. – This appeal is filed by M/s. Biocon Biologicals Ltd. (the assessee/appellant) for the assessment year 2020-21 against the assessment order passed u/s. 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 (the Act) by the ACIT, Circle 1(1)(1), Bangalore [the ld. AO] dated 27.06.2024 wherein the total income of the assessee is assessed by making a solitary addition of Rs. 14,05,46,884 as arm’s length price of overdue receivables from Associated Enterprises in the normal computation of total income pursuant to DRP Directions on Draft assessment order containing above adjustments as per order u/s 92 CA 93) of the Act and book profit as per ROI of Rs. 4,26,28,48,182 under the provisions of section 115JB of the Act is assessed at Rs. 4,66,44,31,180/-.
2. The assessee is a subsidiary of Biocon Ltd. engaged in the development, manufacture and commercialisation of biosimilar. Assessee filed its original Return of Income on 12/2/2021 which was revised on 31st of March 2021 and tax was payable on Book profit tax.
3. This return was picked up for scrutiny and as assessee has entered into international transactions, a reference was made to the DCIT(TP), 1(1)(2) [ld. TPO] to determine the arm’s length price (ALP) of various international transactions. The assessee has also entered into several specified domestic transactions.
4. The ld. TPO examined the international transactions. He found that as per Form no 3CEB there are several outstanding receivables from the Associated Enterprises, however assessee did not benchmark them separately but stated there in that these are interlinked transactions. As per form No 3CEB Trade receivable from associated enterprise UK is of Rs. 6,684,881,819/-, trade receivable from AE [Malaysia] is 100, 24,77,407/- and from USA entity is Rs. 86,728,364/-.
5. The ld. TPO found that aggregation of transaction is possible only when underlying transactions are continuous and closely interlinked. He referred to T P Study report and found that assessee has failed to show that outstanding beyond credit period is interlinked/ closely linked and requires to be benchmarked separately. [Para 5.15 and 5.16 TP Order]. The ld.. TPO further rejected request for no separate adjustment as entity level adjustments have already been considered by ld. TPO at Arms’ length. Thus, this transaction was not separately referred for benchmarking to ld. TPO but looking at the statutory provisions, he noted that it has come to his notice, in view of the statutory provisions, overdue receivables is an international transaction of capital financing which needs to be benchmarked separately. The ld. TPO proposed the interest rate based on the average of SBI PLR (13.27%) if the invoices are raised in domestic currency and if invoices are raised in foreign currency, interest is to be benchmarked on prevailing LIBOR rate + mark up. Accordingly, the ld. TPO listed 216 invoices where there is a delay exceeding 30 days and computed interest on such receivables by adopting 6.871 % of LIBOR and proposed a total adjustment of Rs. 14,05,46,884 by passing an order u/s. 92CA(3) of the Act on 22.6.2023.
6. Accordingly, a draft assessment order was passed which was objected before the ld. DRP, who issued directions on 31.5.2024. However, before the Ld. DRP, the assessee objected that :-
| (i) | outstanding receivables from AEs cannot be considered as a separate international transaction but is interlinked and connected with sale transaction itself and therefore it cannot be benchmarked independently. |
| (ii) | by questioning the outstanding, the ld. TPO has questioned the commercial expediency of the transaction. |
| (iii) | assessee does not have any policy of charging interest from any unrelated parties. |
| (iv) | even otherwise, the ld. TPO has adopted rate of interest of LIBOR + 450 basis points, however the basis of 450 basis points over LIBOR was neither mentioned in the show cause notice nor in the assessment order. |
7. The ld. DRP after considering the submissions of the assessee and relying on several judicial precedents, held that international transaction on outstanding due receivable beyond the credit period is a separate international transaction. It was also rejected that the TPO has recharacterized the transaction of overdue receivable. It also rejected the contention of assessee that if there is no policy of charging interest from non-AE and therefore from AE such interest cannot be imputed. With respect to the interest rate of LIBOR + 450 basis points, the ld. DRP confirmed the same for computing interest. The assessee filed certain additional evidence to allow the credit period as per inter-company agreements, whereas the TPO has allowed the standard 30 days as per agreement. The ld. DRP rejected it holding that the credit period of inter-company arrangement is transaction with related party and therefore cannot be considered.
8. Accordingly, the action of the ld. TPO was confirmed. Based on this, the assessment order u/s. 143(3) r.w.s. 144C(13) was passed on 27.6.2024 wherein the total income of assessee is determined at Rs. 14,05,46,884.
9. The assessee is aggrieved with the same and has preferred the following grounds of appeal:-
“General Grounds
1. The impugned final assessment order has been passed without following due procedure laid crown in law, and hence, bad in law.
2. The impugned orders passed by the Learned AO/ Learned Transfer Pricing Officer (learned TPO’, ‘Ld. TPO’) and directions of the Hon’ble DRP are based on incorrect appreciation of facts of the case and incorrect interpretation of law and therefore, are bad in law and are liable to be quashed.
3. The Ld. AO erred in assessing total income of the Appellant at Rs. 2,02,38,97,230 under the normal provision of the Act as against the returned income of Rs. 1,88,33,50,350.
4. The Learned AO has erred in assessing the total income of the Appellant at INR 4,66,44,31,180 under the provisions of 115JB of the Act as against the returned income of INR 4,26,28,48,182
Grounds relating to legal validity of the order passed by the learned AO
5. The Ld. AO have erred on the facts, in circumstances of the case and in law in not passing the final assessment order within the time limit as provided under Section 153 of the Act i.e., the outer limit for passing of the final assessment order for AY 2020-21 would be 30 September 2023, thus making the assessment proceedings time barred and bad in law and thereby it should be quashed.
Transfer Pricing Grounds
6. The Ld. AO/TPO/DRP have erred in law and fact by imputing notional interest on outstanding trade receivables from Associated Enterprises (‘AEs’). While doing so:
6.1 Erred, in law and on facts, by making an upward addition of INR 14,05,46,884 to the total income of the Appellant on account of adjustment of notional interest on outstanding trade receivables from its AEs.
6.2 Erred in law and on facts, by treating receivables from AE as international transaction separate and distinct from the international transaction of providing contract research services and contract manufacturing services to its AEs.
6.3 Erred in law and on facts, in not considering the business/ commercial expediency of the arrangement and recharacterizing the delayed trade receivables realizations as a loan transaction, thereby computing notional interest on the same.
6.4 Erred in law and on facts, by questioning the business rationale of the transaction undertaken by the Appellant thereby questioning the commercial expediency of the transaction entered by the Appellant.
6.5 Erred in law and on fact, by computing interest till date of payment instead of restricting the same up to 31 March 2020.
6.6 Erred in law and on facts, by not appreciating that the Appellant has earned higher margin and excess income from its AEs, embedded in its service fee, as compared to comparable companies, and the margins of the being at arm’s length, the need for a separate adjustment in account of interest on delayed receivables is unwarranted as also unjustified
6.7 Working capital adjustment subsumes the delay in receivables and payables and hence, no separate adjustment on outstanding receivables is required.
6.8 By ignoring the fact that the Appellant has a consistent policy of non-charging of interest on delayed realisation of trade receivables from both third party customers as well as its AEs.
6.9 Erred on facts, by not appreciating that the Appellant does not have a policy of charging interest from other unrelated parties in similar transactions nor has it paid any interest on its outstanding trade payable at year end to unrelated vendors.
6.10 Erred in law and on facts, by not appreciating that the Appellant is not paying any interest on trade payable balances of AEs.
6.11 Erred in fact, by not allowing credit period as per intercompany agreement between the Appellant and its AEs.
6.12 Erred in law and on fact, by computing interest without netting off balance of outstanding receivable from AE with balance of outstanding payables to AE.
6.13 Erred in law and on facts, by adopting LIBOR plus 450 basis points as the base interest rate, though 450 basis points applied over LIBOR was not mentioned in the show cause notice and TP order, and which addition of basis points to the LIBOR rate, without prejudice is excessive.
Corporate Tax Grounds
7. Erroneously considering assessed profits and gains from business as book profits for Minium Alternate Tax (“MAT”) provisions
7.1 The Ld. AO has erred in law and on facts, in considering the assessed Profits and Gains from Business or Profession (“PGBP”) as the book profits u/s 115JB of the Act.
7.2 The Ld. AO has erred in law and on facts, by making an addition of Rs. 40,15,82,998 to the books of the Appellant (i.e., by considering the PGBP income as book profit) directly in the computation sheet annexed to the assessment order without proposing any addition to book profits either in the Show Cause Notice (“SCN”) or in the assessment order.
7.3 The Ld. AO has erred in law and on facts, in considering the PGBP income as book profits which is not as per the provisions of section 115JB of the Act. Further, no adjustment can be made for computation of the book profits unless specifically provided u/s 115JB of the Act
Non-grant of advance tax, TDS, TCS credits and FTC
The Ld. AO has erred in law and on facts:
8.1 in not considering that Biocon Research Limited (“BRL”) had merged with the Appellant during the year under dispute and disregarding the credit claimed (i.e., advance tax, TDS/TCS) by the Appellant, as per the order of the National Company Law Tribunal under the approved merger scheme.
8.2 in unjustifiably reducing the advance tax credit by INR. 6,60,00,000 i.e., from INR 1,21,10,00,000 claimed by the Appellant in the tax return to INR 1,14,50,00,000 for the subject AY.
8.3 in not granting TDS credit of INR 5,40,17,748 (pertaining to both Appellant and BRL) and TCS credit of Rs. 1,32,782 (pertaining only Appellant) claimed by the Appellant in the tax return for the subject AY.
8.4 in not granting the tax credit (i.e., advance tax, TDS/TCS) even though the same are appearing in Form 26AS of both the entities (i.e., the Appellant and BRL).
8.5 in not granting Foreign Tax Credit (“FTC”) of INR 2,87,674 claimed by the Appellant in the tax return for the subject AY.
8.6 in not granting the above-mentioned credits, without appreciating that no adjustment was proposed with regard to the above in the SCN or in draft assessment order or in final assessment order. Hence, in the subject final order, no adjustments can be made.
Consequential Grounds
9. The Ld. AO has erred in initiating penalty proceedings u/s 270A of the Act for underreporting of income.
10. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in not granting the interest in accordance with the provisions of section 244A of the Act.
11. The Ld. AO has erred, in law and on facts in levying excess interest u/s 234C of the Act of INR 47,42,435.
The Appellant submits that each of above grounds is independent and without prejudice to one another.
The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal.”
10. One of the issues raised before us is with respect to the adjustment of Rs.14,05,46,884 of TP adjustment. The ld. AR submitted that ground nos. 1-4 of the appeal are general in nature. He also did not argue ground no.5. Therefore, ground nos. 1 to 5 of the appeal are dismissed.
11. With respect to ground no.6 where the addition of Rs.14,05,46,884 is made, the ld. AR submitted that:-
| i. | assessee has entered into several international transactions which have been examined by the ld. TPO including specified domestic transaction wherein the margin of assessee of operating profit/operating cost (OP/OC) is 23.15% in SEZ 1, 90.49% in SEZ 1 and BRL SEZ of 113.55%, thus total margin of assessee is 57.14%. He submitted that the ld. TPO has accepted the margin of the assessee and no adjustment is made. Therefore, as the transaction of receivable from AE has resulted from such business operations, they are inter-linked and could not have been separately benchmarked. |
| ii. | He further submitted that even otherwise, if working capital adjustment is granted to the assessee, it would have resulted into a better margin in favour of assessee and therefore even otherwise this adjustment could not have been made. He referred to the order u/s. 92CA(3) to support his contention. |
| iii. | He further referred to page 868 onwards wherein the TP study report is placed and drawn our attention to para 5.4.2 stating that since there are significant differences in working capital between the tested party (assessee) and the comparable companies, appropriate adjustment may be required so that closely linked international transactions are properly determined. He submits that there is no adjustment made by the assessee in its TP study report. He referred to the similar observations in case of every other international transaction. He ultimately referred to page 972 of PB to submit that since the operating margin of the assessee of 15% of Operating Cost is within the arm’s length range of 8.22% and 15.92% of the international transactions entered into by the assessee. He referred to page 875 of PB which is summary of international transaction wherein he submitted that the trade receivables and trade payables have been considered by the assessee as closely linked to other international transaction of sale and services under the combined transaction approach and were not evaluated separately. Therefore, according to him, same are inter-linked and closely connected transactions. |
| iv. | He further referred to the provisions of Rule 10A(d) where transaction is defined as, it includes a number of closely linked transaction and therefore he submitted that international transaction of outstanding due receivable could not have been separately benchmarked. |
| vi. | He further referred to the decision of Hon’ble Delhi High Court in the case of Sony Ericsson Mobile Communications India P. Ltd. v. CITand referred to para 100 & 101 stating that net profit margin takes into consideration the outstanding receivables which is inter-linked transaction. He further referred to para 80 of the order to submit that transaction would also mean number of closely linked transactions. |
| viii. | He also submitted that the impugned assessment year is AY 2020-21 FY 1.4.2019 to 31.3.2020. For this he referred that RBI has come out with a Circular on 1.4.2020 stating that in view of the disruption caused by COVID-19 pandemic, the time period for realisation and repatriation of export proceeds made upto or on 31.7.2020 has been extended to 15 months from the date of export. This Circular is issued to enable the exporter to realize their receipts from COVID affected countries within the extended period. Thus, his argument was that when the RBI has extended the period, the overdue receivable does not remain overdue, but merely due and therefore international transaction cannot be determined by considering only 30 days credit period but should be granted 15 months from the date of export. |
12. Accordingly, he submitted that adjustment made by the ld. TPO and confirmed by the ld. DRP is not correct.
13. The learned CIT DR vehemently supported the orders of the learned that lower authorities and submitted that the transaction of overdue receivable from associated enterprises is a separate international transaction and cannot be benchmarked with the normal transaction of sale or services. The transaction of sale and services ends as soon as agreed period of credit is over. He referred to the order of the learned TPO wherein he has dealt with all arguments of the assessee in paragraph number 5 of the order. He further referred to ground number 2 of objections before the learned dispute resolution panel.
14. We have carefully considered the rival contentions and perused the orders of the learned lower authorities. We have also considered factual paper book and case law compilation submitted by the ld. AR. We have considered those decisions wherever we find them relevant.
15. Form number 3CEB submitted by the assessee clearly shows that the receivable from associated enterprises are already shown in international transaction as per serial number 19 of that form. It is submitted that the transactional net margin method is adopted to benchmark this international transaction as these are closely linked to the transaction stated in para number 11B of the form 3CEB. In the transfer pricing study report in paragraph number 4.7 it is stated that though the finance act 2012 has amended the definition of the term ‘International transaction’ to include capital financing transaction including any type of advance, payments or deferred payment or receivable or any other debt arising during the course of the business. In this regard, receivables from associated enterprises have been considered as closely linked transactions to provision of services under a combined transaction approach and are not being evaluated separately. It was further stated that the rules [Rule 10 A] also clarified that a ‘transaction’ includes a number of closely linked transaction. However, there is no reference as to how these transactions are closely linked. Therefore, the learned transfer pricing officer and the learned dispute resolution panel has rejected the argument of the assessee holding that the onus is on the assessee to show that these are interlinked and closely connected transactions. As this onus has not been discharged, no fault can be found with the learned lower authorities in rejecting this ground. Even in the response to the show cause notice dated 02/05/2023 replied on 21 May 2023, only legal grounds and legal arguments were raised and no facts were placed on record to show that how these transactions are closely linked or interlinked. AT the point credit period ends the transaction of sales or services ends and in substances, the further credit allowed to the other party becomes transaction of providing finance, unless some other material is shown. There is no such material placed before us. Therefore, we uphold the finding of the learned lower authorities that the outstanding dues beyond an agreed credit period in the case of the assessee are separate international transaction, requires to be benchmarked separately and cannot be clubbed together with other transaction mentioned in para 11 B of form number 3CEB and therefore the learned that lower authorities have correctly benchmarked them separately.
16. With respect to the argument of the learned authorized representative that there is a finding by the learned transfer pricing officer that period for which interest has been calculated is to be limited to the year under consideration as interest accrued in other years cannot be taxed in this year. He referred to paragraph number 5.23 of the TP order. He further referred the chart of computation and submitted that at serial number 213 – 216 the learned TPO has computed the interest on delay for 518 days and 422 days, which is beyond financial year and therefore this adjustment could not have been made. We have carefully considered the paragraph number 5.23 of the order of the learned providing officer and find that only interest the extent of the financial year have been made by the learned TPO. Looking at the last 4 entries of the computation, it is clear-cut that the addition had been made of Rs. 5.65 crores. The adjustment should have been restricted only up to 365 days. Therefore, there is a computational error in the addition made by the learned transfer pricing officer.
17. We have been shown the press release dated 1 April 2020 by the Reserve Bank of India regarding the measures taken by the reserve bank of India for dealing with the Covid 19 pandemic. According to that it was stated that presently the value of the goods or software exports made by the exporters is required to be realized fully and repatriated to the country within a period of nine months from the date of exports. In view of the disruption caused by the Covid 19 pandemic, the time period for realization and repatriated of export proceeds for exports made up to or on 31 July 2020 has been extended to 15 months from the date of export. The measure will enable the exporters to realize the receipts, especially from the Covid affected countries within the extended period and also provide greater flexibility to the exporters to negotiate future exports contracts with the buyers. Thus, the financial year for which the relevant relaxation is made by the RBI starts from 1 April 2020. Here in impugned appeal financial year is 1-4-2019 to 31-3-2020. Therefore, for the financial year before us, the above relaxation by Reserve Bank of India does not apply. Therefore, the circular cited of the Reserve Bank Of India does not help the case of the assessee. Thus, we reject reliance on extended time period for this AY is not relevant at all. Even otherwise RBI circular has extended the time limit as per exchange control manual and may or may not have any impact on determination of arm’s length price to be determined as per the Act, off Course considering special effects of COVID -19.
18. Regarding the recharacterisation of the transaction by the learned TPO, the learned authorized representative has placed reliance on the decision of the honourable Guwahati High Court in case of [1993] 199 ITR 702 (Gauhati) in case of Highway construction company private limited. We have carefully considered that decision and find that it is not related to the transfer pricing issues. Here the learned transfer pricing officer has also not recharacterised the transaction but has merely applied the law and benchmarked the arm’s-length price of the international transaction of overdue receivable from associated enterprises.
19. With respect to the commercial expediency in keeping the outstanding receivable, no facts are produced before the Ld. lower authorities or before us that there is any commercial expediency from the side of the assessee to keep the outstanding receivable from the associated enterprises beyond the due dates. This is also apparent from the fact that there are almost 216 entries listed by the learned TPO delay ranging from 61 to 548 days. Reason of delay or any commercial expediency therein is also not placed before us or the learned lower authorities. Accordingly, this argument is also rejected.
20. The learned authorized representative has further argued that setting off and netting of the outstanding receivable with outstanding payables should be made and thereafter if there is any outstanding which is beyond due date or credit period only that should have been considered for making the adjustment. We fully agree with the learned authorized representative that if the sum is receivable from associated enterprises “A” and sum is also payable to the associated enterprises “A”, then the outstanding receivables should be net of first against the outstanding payable, provided there are no contrary agreements, facts and circumstances. It is for the assessee to show that the outstanding receivable is not received by the assessee beyond the credit period from associated enterprises for the reason that there is an outstanding payable to the same party. Such facts are required to be demonstrated, the learned TPO is directed to look into these facts, if placed before him.
21. Another argument of the learned authorized representative that instant adjustment was not proposed in show cause notice, no addition could have been made in the draft and final assessment order. We find that the learned transfer pricing officer has given an ample opportunity to the assessee which has been discussed in paragraph number 5 of the transfer pricing order, the reply of the assessee has also been considered, it cannot be said that assessee is not at all been given any opportunity of hearing before the learned lower authorities. The purpose of show cause notice is to make assessee aware about the likely step by the ld. AO and ld. TPO. Thus, assessee has been made aware about the issue in TP Assessment proceedings.
22. With respect to the argument of the learned authorized representative that if the outstanding dues are considered in margin of the assessee in working capital adjustment, it would have also given a better margin to the assessee compared to the comparable margins, the learned authorized representative referred to paragraph number 5.1.4.2, 5.1.4.4.2, 5.2.5.3 and 5.3.2.3 of the transfer pricing study report wherein identical wordings says that in case there are significant differences in working capital of tested party i.e. assessee and the comparable companies and appropriate adjustment may be required for such differences so that the closely linked international transaction of accounts receivable, trade credit is properly considered in determining the arm’s-length price. It is further mentioned that no adjustments have been made to account for such differences and the assessee reserves its right to undertake an adjustment for such differences if warranted. Now the assessee says that that if a working capital adjustment is granted to the assessee, the above adjustment would be eliminated. Assessee has also relied upon several judicial precedents before us stating that working capital adjustment subsumed accrued interest on trade receivables, no separate adjustment should be made. The decisions relied upon include Kusum healthcare private limited versus ACIT (ITA number 765 of 2016) (Delhi) (Delhi)], Teradata India private limited versus ACIT [IT appeal number 8054 (Delhi), Cox & Kings India private limited versus ITO (ITA number 982/M/2007) and Xchanging solutions Ltd case in ITA number 1294/Bangalore/2012. As these arguments have not been advanced before the learned transfer pricing officer or learned dispute resolution panel, but is now advanced before us stating that in the transfer pricing study report the assessee has stated that it reserves its right of claiming working capital adjustment, we restore this issue back to the file of the learned transfer pricing officer/learned assessing officer with a direction to the assessee to show before the learned TPO / AO that if the working capital adjustment is made, if allowable in accordance with the law, the above adjustment of interest on overdue realization of trade receivable would not be required. The learned AO/TPO may examine the argument of the assessee and decide the issue afresh after granting the assessee an opportunity of hearing. If the learned assessing officer/learned TPO reaches at the conclusion that still there is an adjustment to be made with respect to the interest on overdue receivable from the assessee’s associated enterprises, it should be restricted to the period in financial year only.
23. Accordingly, ground number 6 is disposed of with above direction and is allowed to the extent indicated.
24. Ground number 7 is corporate tax Grounds wherein the grievance of the assessee is that while computing the book profit under section 115JB of the act the learned assessing officer has considered the assessed profits and gains from business and profession and treated as its book profit u/s 115 JB of the Act. We have considered this ground of the appeal and find that in the return of income filed by the assessee at schedule MAT the assessee has computed the book profit being under section 115JB of Rs. 4,262,848,182/-tax payable under section 115JB was determined at Rs. 639,427,227/-, whereas in the tax computation sheet, ld. AO computed tax payable at serial number 20 under that section at Rs. 69,96,64,677/-. There is no reference of such difference in the assessment order. It is apparent that the book profit income has been taken by the learned AO at Rs. 4,664,431,180/- against Rs. 4,262,848,182/- shown by the assessee. We do not find any adjustment made to the book profit in the assessment order. Therefore, apparently there is an error which needs to be rectified. Therefore, the learned assessing officer is directed to compute the correct book profit under section 115JB and consequent tax thereon. Accordingly ground number 7 of the appeal is allowed.
25. The ground number 8 is with respect to the non-grant of advance tax, tax deduction at source, tax collection at source credits and foreign tax credit. On careful consideration, we find that, if the above credit is not given to the assessee, the learned assessing officer is directed to grant the same after proper verification. Accordingly ground number 8 of the appeal is allowed.
26. Ground number 9 is regarding initiation of penalty proceedings under section 270A, the ground number 10 is with respect to granting of the interest to the assessee in terms of provisions of section 244A of the act and ground number 11 is with respect to the levy of interest under section 234C of the act. All these grounds are consequential or premature in nature and therefore dismissed.
27. Accordingly appeal of the assessee is partly allowed for statistical purposes.