Signode India Limited Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad held LIBOR + 200 basis points is an appropriate rate of interest on outstanding trade receivables interest of bank short term deposit rate. Accordingly, TPO directed to compute interest on outstanding receivables by applying LIBOR + 200 basis points.
Facts- The assessee company M/s. Signoda India is engaged in manufacturing of strap, stretch and protective packaging and packaging tools and equipment that are used to apply bulk packaging materials. The Assessing Officer after considering the submissions of the assessee company determined the total assessed income of the assessee company at Rs.143,99,26,151/- by making additions on account of TP adjustments proposed by the TPO and by making disallowance of depreciation on ‘Goodwill’ amounting to Rs.130,06,83,295/- as against the returned income of the assessee company at Rs.13,86,90,068/- vide Draft Assessment Order dated 10.12.2019 passed u/sec.143(3) r.w.s.92CA(3) of the Income Tax Act, 1961.
In pursuance to the Directions of the DRP, the Assessing Officer passed his Final Assessment by making addition on account of TP adjustment u/sec.92CA(3) amounting to Rs.4,21,722/- and disallowance of depreciation on Goodwill amounting to Rs.130,06,83,295/- and determined the total assessed income of the assessee company at Rs.130,11,05,017/- vide Order dated 26.04.2021 passed u/sec.143(3) r.w.s.144C(13) r.w.s.144B of the Income Tax Act, 1961. Aggrieved by the Final Assessment Order passed by the Assessing Officer, the assessee company is now, in appeal before the Tribunal.
