DCIT, LTU-2, KOLKATA, KOLKATA vs. M/S. TITAGARH WAGON LTD., KOLKATA

1 ITA 1064 & 1065/Kol/2018 CO Nos.14 & 15/Kol2021 M/s Titagarh Wagaon Ltd

आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री अधिकेश बिर्जी, न्याधयक सदस्य एवं श्री धिरीश अग्रवाल, लेखा सदस्य के समक्ष Before SRI ANIKESH BANERJEE, JUDICIAL MEMBER & SRI GIRISH AGRAWAL, ACCOUNTANT MEMBER I.T.A. Nos.: 1064 & 1065/KOL/2018 Assessment Years: 2011-12 & 2012-13 DCIT, LTU-2, Kolkata.….......…………........................................Appellant Vs. M/s. Titagarh Wagon Ltd......................................................Respondent [PAN: AABCT 1377 P] C.O. Nos.: 14 & 15/KOL/2021 Arising Out of I.T.A. Nos.: 1064 & 1065/KOL/2018 Assessment Years: 2011-12 & 2012-13 M/s. Titagarh Wagon Ltd.….......…………..................................Appellant [PAN: AABCT 1377 P] Vs. DCIT, LTU-2, Kolkata............................................................Respondent

2 ITA 1064 & 1065/Kol/2018 CO Nos.14 & 15/Kol2021 M/s Titagarh Wagaon Ltd

Corrigendum This corrigendum is passed by the Bench for rectification of the mistakes found in the orders of the above-mentioned appellant vide order dated 09/04/2024 in following paragraphs. 2. The paragraph no-29 of the original order is stated as follows: - “29. We heard the rival submission and considered the documents available in the record. The TPO during assessment made the upward adjustment of interest amount to Rs. 1,88,11,087/-. The ld. TPO derived cost of the fund to the appellant by a formula wherein the “cost of funds” to the appellant was derived at 16.95% on which risk premium of 300 bps over the cost of the funds so derived. Thus ld. TPO considered the ALP interest @ 16.95% over interest @ 7.16% charged by assessee. The borrowing / lending undertaken in international market. The interest should be charged on the basis of LIBOR/ EUROIBOR which is considered to the real cost of interest funding. In terms of rule 10B, comparable of foreign currency loans has to be compared with loan provided in comparable conditions prevailing in markets in which the parties to the transaction operate and comparable contractual term i.e. foreign currency loan provided in the international market. During assessment the comparable U/R 10B(2)(b) are not considered. In our considered view, we set aside the order of AO/TPO and directed the AO/TPO to recompute the rate of interest on loan fund after considering the comparable. Needless to say, the assessee should get reasonable opportunity in set aside proceeding. Accordingly, ground no. 11 to 14 of the revenue is allowed for statistical purpose.” 3. Whereas paragraph No.29 of the order dated 09/04/2024 may be read as follows: -

3 ITA 1064 & 1065/Kol/2018 CO Nos.14 & 15/Kol2021 M/s Titagarh Wagaon Ltd

“29. We heard the rival submission and considered the documents available in the record. The TPO during assessment made the upward adjustment of interest amount to Rs. 1,88,11,087/-. The ld. TPO derived cost of the fund to the appellant by a formula wherein the “cost of funds” to the appellant was derived at 16.95% on which risk premium of 300 bps over the cost of the funds so derived. Thus ld. TPO considered the ALP interest @ 16.95% over interest @ 7.16% charged by assessee. The borrowing / lending undertaken in international market. The interest should be charged on the basis of LIBOR/ EUROIBOR which is considered to the real cost of interest funding. In terms of rule 10B, comparable of foreign currency loans has to be compared with loan provided in comparable conditions prevailing in markets in which the parties to the transaction operate and comparable contractual term i.e. foreign currency loan provided in the international market. During assessment the comparable U/R 10B(2)(b) are not considered. In our considered view, we set aside the order of AO/TPO and directed the AO/TPO to recompute the rate of interest on loan fund after considering the LIBOR/URO-LIBOUR rate as comparable and decide accordingly. Needless to say, theassessee should get reasonable opportunity in set aside proceeding. Accordingly, ground nos. 11 to 14 of the revenue are allowed for statistical purpose.” 4.The paragraph no-35 of the original order reads as follows: - “35. The assessee has not pressed any other issue during the cross objection. So, all the matters remained untouched.” 5. Whereas paragraph no-35 may be read as follows: - “35. The assessee has not pressed any other issue during the cross objection, only Ground no-6 is pressed and mentioned that the ld. CIT(A) had not adjudicated the issue. Accordingly, Ground no-6 is remitted back to the file of the ld. CIT(A) for adjudication. Needless to

4 ITA 1064 & 1065/Kol/2018 CO Nos.14 & 15/Kol2021 M/s Titagarh Wagaon Ltd

say, the assessee should get reasonable opportunity in set aside proceeding.” Order pronounced on 31st .05.2024 in accordance with Rule 34(4) of the Income tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- [Girish Agrawal] [Anikesh Banerjee] Accountant Member Judicial Member Dated : 31.05.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. DCIT, LTU-2, Kolkata. 2. M/s. Titagarh Wagon Ltd., 756, Anandapur, E.M. Bypass, Kolkata- 700 107. 3. CIT(A)-22, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata