CONCUR TECHNOLOGIES (INDIA) PRIVATE LIMITED,BENGALURU V. ASSISTANT COMMISSIONER F INCOME TAX CIRCLE 2(2)(1), BENGALURU

MA 29/BANG/2025

AI Insights

The case involves Concur Technologies (India) Private Limited, which filed a miscellaneous application seeking rectification of an earlier Tribunal order that incorrectly directed the use of the LIBOR rate for benchmarking interest on outstanding receivables. The company argued that since all transactions and invoices were in Euro, the appropriate benchmark should be EURIBOR. The Tribunal acknowledged the error and corrected the order to specify the use of EURIBOR, aligning the interest rate benchmark with the currency of the transactions to avoid unnecessary exchange rate risks.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361083 (ITAT-BANGALORE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Tuppadahalli Energy India Pvt Ltd vs. DCIT (Bang) [TS-829-ITAT-2017(Bang)- TP]
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : Bengaluru BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER MA No.29/Bang/2025 [in IT(TP)A No.1925/Bang/2024] Assessment year : 2020-21 Concur Technologies (India) Private Limited, No.65/2, Bagmane Laurel, Bengaluru North, Bengaluru – 560 093. PAN: AAECC 3891N Vs. The Assistant Commissioner of Income Tax, Circle 2(2)(1), Bengaluru. APPLICANT RESPONDENT Applicant by : Shri Chavali Narayan, CA Respondent by : Shri Parithivel V., Jt.CIT(DR)(ITAT), Bengaluru. Date of hearing : 16.05.2025 Date of Pronouncement : 22.05.2025 O R D E R Per Prashant Maharishi, Vice President 1. MA No.29/Bang/2025 is filed by M/s. Concur Technologies (India) Private Limited, (the assessee/Applicant) for the assessment year 2020-21 seeking rectification of the order of the Tribunal dated 05.12.2024 stating that the direction of the coordinate Bench to consider the LIBOR rate for benchmarking of interest on outstanding receivable in Para 13 is an apparent error because for bills are prepared in Euro, is a mistake apparent from the record. MP No.29/Bang/2025 Page 2 of 4 2. The ld. AR referred to the miscellaneous petition and reiterated his submissions in para ‘C’ & ‘D’ which is as under:- “C. Our submission to the Honourable Tribunal 1. We wish to submit that the services of the Applicant are with AEs domiciled within the Eurozone, and as a result, the EURIBOR is more representative of the economic environment in which the Applicant and its AEs operate. Using EURIBOR ensures that the interest rate applied is reflective of the market conditions associated with the EURO currency. 2. Further, by using EURIBOR, the introduction of an additional exchange rate risk that could arise from using a benchmark rate in a different currency, such as LIBOR, which is typically quoted in USD or GBP, is avoided. 3. Additionally, it is to be noted that all the AE receivables of the Applicant have been received through billings in EURO. The Applicant had also pointed out before this Honourable Tribunal that all the invoices and the resultant receivables are in EURO. Hence, the delayed receivables should be benchmarked using the EURIBOR as the interest rate. Reliance in this regard is placed on Tuppadahalli Energy India Pvt Ltd vs. DCIT (Bang) [TS-829-ITAT-2017(Bang)- TP]. D. Our prayer to the Honourable Tribunal Under the circumstances and in view of the above submission, we pray your Honours to suitably modify the order passed on 5 December 2024.” 3. The ld. DR also agreed that there is an apparent error in the direction of the Tribunal for applying the LIBOR rate as the basis for computation of interest on outstanding receivables. MP No.29/Bang/2025 Page 3 of 4 4. We have considered the rival contentions and perused the order of the coordinate Bench as well as the contents of the miscellaneous application and arguments of the parties. Para 13 of the order of the coordinate Bench is a under:- “13. The limited issue that now involves is that the ld. TPO has computed the interest of trade receivable by applying the SBI PLR of 13.27%. With respect to the above rate adopted by the ld. TPO, it is interesting to read para 16.22 of the order of the ld. TPO. As per that para, it is specifically mentioned that in case invoices are raised in domestic currency, rate of interest is to be charged on the basis of SBI PLR prevailing during the FY 2019-20 i.e., 13.27% p.a. However, in case invoices have been raised in foreign currency, the interest rate proposed to be charged is on the basis of mark-up on prevailing LIBOR rate during the year. The ld. AR has placed before us copies of invoices at pages 370 to 409 of PB wherein we find that the invoices have been raised by assessee in foreign currency i.e., Euro. We do not find any invoice raised by the assessee on its AEs in Indian currency. Therefore, the computation of rate of interest @ 13.27% adopted by the ld. TPO and confirmed by the ld. DRP is devoid of any merit. As per the order of the ld. TPO himself, if the invoices are raised in foreign currency, the interest rate should be charged on the basis of prevailing LIBOR rate + appropriate mark-up. Therefore, as the ld. TPO has not charged interest adopting LIBOR rate, we direct the ld. TPO to apply the LIBOR rate as the basis for computation of interest.” 5. Naturally, when the bills are prepared in Euro , there is no point in adopting LIBOR rate with appropriate mark-up for benchmarking the international transaction of imputing interest on outstanding receivable from AE. Thus, there is a mistake apparent from the record. Therefore, now, the last sentence of para 13 of the order of Tribunal is corrected as under:- MP No.29/Bang/2025 Page 4 of 4 “Therefore, as the ld. TPO has not charged interest adopting LIBOR rate, we direct the ld. TPO to apply EURIBOR as invoices are prepared in Euro as the basis for computation of interest.” 6. Accordingly the miscellaneous application of the assessee is allowed as indicated above. Pronounced in the open court on this 22nd day of May, 2025. Sd/- Sd/- ( KESHAV DUBEY ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 22nd May, 2025. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "