FIL INDIA BUSINESS & RESEARCH PVT. LTD. ,DELHI V. DCIT, CIRCLE 2(1), C.R BUILDING , DELHI

ITA 1948/DEL/2021

AI Insights

The case involves Fil India Business & Research Services Private Limited, which appealed against the final order passed by the Assessing Officer under the National Faceless Assessment Centre, following a dispute resolution process concerning the transfer pricing adjustments made to its international transactions. The company had entered into an APA with the CBDT, which led to a revised return declaring a higher income. The Transfer Pricing Officer (TPO) made adjustments to the income declared by the assessee, which were contested. The Tribunal found issues with the comparables selected by the TPO and directed a re-evaluation of the comparables and the application of the correct margins. The Tribunal also addressed the issue of interest charged under sections 234B and 234C, which was found to be incorrectly applied based on the APA.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668889 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2017-2018
• Other Referred Cases: PCIT vs. Open Solution Software Pvt. Ltd., PCIT-7 vs. M/s Oracle (Ofss) BPO Services Ltd., Sony India Pvt. Ltd. Vs. DCIT, M/s Avaya India Pvt. Ltd. vs. ACIT-1, Colte Technology Services India Pvt. Ltd. vs. CBDT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.K. JHADAV
• Assessee Lawyers: RAVI SHARMA; KSHITIJ BANSAL; INR; NOT COMPUTING
• Keywords: Revised return; Transfer pricing; International transaction; Related party transaction
• Section: 143(3); 139; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘H’ NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1948/Del/2021 (ASSESSMENT YEAR:2017-18) Fil India Business & Research Services Private Limited, 807, New Delhi House, Barakhamba Road, New Delhi-110001 PAN:AABCF1572C Vs. DCIT, National Faceless Assessment Centre, Delhi. (Appellant) (Respondent) O R D E R PER MANISH AGARWAL, AM: The present appeal is filed by the assessee against the final order passed by the Assessing Officer, National Faceless Appeal Centre (NFAC) dated 29.10.2021 u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (“the Act” in short) for Assessment Year 2017-18 after the order of ld. Dispute Resolution Panel (DRP, in short) dt. 21.09.2021. 2. Brief facts of the case are that the assessee is a Private Limited Company engaged in the business of Software Development, ITES and Research Development Services to its group companies. The return of income originally was e-filed on 28.11.2017 declaring total income at Rs.101,22,20,490/- which was revised on 26.10.2018 at an income of Rs.100,72,58,850/. Thereafter, pursuant to APA entered into with CBDT, the Appellant filed modified return of income on 29. 05.2019 declaring total income at Rs.124,34,58,390/-. The case of the assessee was selected for complete scrutiny. Since, the assessee has entered into international Assessee by Shri Ravi Sharma, Adv. & Shri Kshitij Bansal, CA Department by Shri S.K. Jhadav, CIT-DR Date of hearing 03.04.2025 Date of pronouncement 25.06.2025 2 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT transactions, therefore, the reference was made to the TPO to compute the Arm’s Length Price u/s 92CA of the Act in respect of the international transaction carried out. The TPO vide its order passed u/s 92CA(3) dated Nil proposed an upward adjustment of Rs.1,53,73,858/- to the value of the International Transaction entered into by the assessee. Thereafter, the AO has passed a draft assessment order u/s 144C of the Act wherein the AO has proposed the additions towards the adjustments done by TPO in international transaction at Rs.1,53,73,858/- and further proposed disallowance on delayed payment of employees contribution of PF and ESI of Rs.50,484/-. 3. Aggrieved by the draft assessment order, the assessee filed objections before the ld. DRP, who though confirmed the action of the TPO, however direct the TPO to verify the contention raised by the assessee and adopt correct working capital margins as pointed out by the assessee. However, TPO without following such directions has passed the appeal given effecting order based on which the AO has passed the final assessment order. Aggrieved by the said final order, the assessee preferred present appeal before the Tribunal. The grounds of appeal taken by the assessee are as under: “The following grounds of appeal are independent of, and without prejudice to each other: “1. On the facts and circumstances of the case and in law, the order passed by the Learned Assessing Officer ('AD')/Transfer Pricing Officer (TPO) and upheld by the Hon'ble Dispute Resolution Panel (DRP\") is bad in law and erroneous. Transfer Pricing (TP) Grounds 2 On the facts and circumstances of the case and in law, the Ld. AC pursuant to the directions of the Hon'ble DRP erred in enhancing the Income of the Appellant by INR 1,53,73,858/- by holding that the Appellant's intermational transactions pertaining to provision of Research Support Services does not satisfy the length principle envisaged under the Act and in doing so, have grossly erred in 2.1 not appreciating that none of the conditions set out in section 92C(3) of the Income Tax Act, 1961 (Act') are satisfied in the present case 2.2. disregarding the arm's length price ('ALP\") as determined by the Appellant in the Transfer Pricing (TP) documentation maintained by it in terms of section 920 of the Act read with Rule 100 of the Income-tax Rules, 1962 (the Rules'); 2.3 rejecting the comparability analysis conducted by the Appellant in the TF documentation and proceeding to conduct a fresh comparability analysis upon application of additional revised filters and rejecting the filters applied by the Appellant in its TP documentation, 3 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT 2.4. not providing the search strategy and accept-reject reasons of the fresh economic analysis conducted by Ld. TPO which tantamount to cherry picking of the comparables, 2.5 including functionally dissimilar companies in the final set of comparables that are not comparable to the Appellant in terms of functions performed, assets employed and risks assumed, 2.6 including functionally dissimilar companies having significant related party transactions in the final set of comparables; 2.7 excluding functionally similar companies selected by the Appellant on arbitrary/ frivolous grounds, even though they are comparable to the Appellant in terms of the functions performed, assets employed and risks assumed. 2.8. rejecting additional companies proposed/ identified by the Appellant even though they are comparable to the Appellant in terms of functions performed, assets employed and risks assumed, 2.9. denying the benefit of working capital adjustment to the Appellant by not computing the margins of the comparables in a consistent manner; 2.10 denying the benefit of risk adjustment to the Appellant by disregarding the difference in risks assumed by the Appellant vis-à-vis comparable companies proposed by the Ld. TPO, and 2.11 Without prejudice to the above contentions raised by the Appellant, the Ld. TPO has failed to give effect to the directions issued by the Hon'ble DRP to verify the operating margins of the comparables and re-compute the adjustment. Corporate Tax Grounds 3. On the facts and circumstances of the case and in law, the Ld. AO/Ld. DRP erred in disallowing a sum of INR 50,484 pertaining to employees' contribution to PF without appreciating the fact that the said amount was duly deposited before the due date of filing the return under section 139(1) of the Act and thus eligible for deduction under section 36(1)(va) read with section 438 of the Act. 3.1 The Ld. AO/Ld. DRP erred in not appreciating the principle laid down by the Hon'ble jurisdictional High Court of Delhi in the case of Commissioner of Income-tax v. AIMIL Limited (321 ITR 508). and in placing reliance on decisions of non-jurisdictional High Courts. 3.2 The Ld. AO/Ld. DRP erred in construing that the Explanations inserted in sections 36(1)(va) and 438 of the Act vide Finance Act, 2021 are effective retrospectively. 4. On the facts and circumstances of the case and in law, the Ld. AO/Ld. DRP in denying the claim of the Appellant to not levy interest amounting to INR 1,39,11,946 under sections 234B and 234C of the Act on unforeseeable additional income offered to tax pursuant to the terms agreed under the APA 4.1 The Ld. AO/Ld. DRP erred in not appreciating that neither the APA terms specify, nor the sections 234B and 234C of the Act provide for, levy of interest on the additional tax liability pursuant to the enhanced margin reported in the modified return of income under section 92CD of the Act. 5. On the facts and circumstances of the case and in law, the Ld. AO erred in not granting due credit of prepaid taxes while computing the demand on the assessed income. 6. On the facts and circumstances of the case and in law, the Ld. AO/ Ld. DRP grossly erred in initiating penalty proceedings under section 270A of the Act. The above grounds and sub-grounds are without prejudice to each other. 4 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT The Appellant craves leave to add, alter, amend, modify or withdraw all or any of the aforesaid grounds of appeal as may be considered necessary at any time before or at the time of hearing of the appeal. The Appellant prays that appropriate relief be granted based on the said grounds of appeal and the facts and circumstances of the case.” 4. During the course of hearing, the Ld. AR of the assessee has not pressed the ground of appeal No.3. to 3.2, thus, the same are dismissed. 5. Ground of appeal No.1 is general in nature and needs no adjudication. 6. The effective ground remained is Ground No.2 to 2.11 wherein the assessee has challenged the action of the AO/TPO enhancing the income of assessee by Rs.1,53,73,858/- towards international transactions related to provisions of Research Development Services. 7. Before us, the Ld. AR of the assessee submitted that the assessee has selected TNMM as most appropriate method and by using gross profit/total costs as PLI, computed the ALP where the tested parties margin was 20% and on the basis of 9 comparable companies, the adjusted average rate comes 11.46% to 15.68% with the median of 15.49%. Since the median margin comes to 15.49% of the comparables and assessee’s margin was 20%, therefore, no adjustment was made by the assessee on such transactions. The assessee selected 9 comparable companies which are as under: S. No. Name of the Company Data Source Average OP/TC Working Capital Adjusted OP/TC 1 IIML Asset Advisors Ltd. P 29.23% 27.03% 2 HDFC Property Ventures Ltd. –Advisory segment P-Seg 54.42% 55.50% 3 Acuitas Capital Advisors Pvt. Ltd. SEBI 1.23% 0.91% 4 IDG Ventures India Advisors Private Ltd. SEBI 15.50% 15.68% 5 India Life Capital Private Ltd. SEBI 10.02% 9.55% 6 Logictree Investment Advisors Pvt. Ltd. SEBI 15.14% 15.49% 7 Money Capital height Research Investment Advisers Pvt. Ltd. SEBI 10.38% 11.46% 8 Money Maker Research Pvt. Ltd. SEBI 6.71% 7.72% 9 SPT Investment Advisory Services Pvt. Ltd. SEBI 38.04% 38.93% 5 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT 8. The Ld. AR further submit that the TPO has rejected the comparability analysis of the assessee and conducted fresh analysis by adding the certain filters and also rejecting the certain filters and arrived at final set of six comparable companies which is as under: 1 Actis Advisers Pvt. Ltd. 19.89% 2 Temasek Holdings Advisors India Pvt. Ltd. 23.99% 3 Angel Financial Advisors Pvt. Ltd. 25.40% 4 IIML Asset Advisors Ltd. 27.03% 5 SPT Investment Advisory Services Ltd. 38.93% 6 HDFC Property Ventures Ltd. 55.50% 9. The ld. AR also submitted that the comparable taken by the TPO are having significant Related party transactions (RPT) and the assessee submitted that out of six comparables companies taken by the TPO, Four comparables companies are failed in RPT filter which are at Serial No.1, 2, 4 and 5 of the aforesaid chart. The Ld. AR further submitted that the company stated at serial No.3 is functionally dissimilar. The Ld. AR further submitted that the RPT filter ranging between 15 to 25% of its AE should be applied for which reliance is placed on the judgment of the Hon’ble Jurisdictional High Court in the case of (i) PCIT vs. Open Solution Software Pvt. Ltd. reported in [2020] 116 taxmann.com 708 (Delhi) dated 18.05.2020. (ii) PCIT-7 vs. M/s Oracle (Ofss) BPO Services Ltd. [2018] 19 taxmann.com 388 (Delhi) (iii) Sony India Pvt. Ltd. Vs. DCIT [2008] 1114 ITD 448 (Delhi). (iv) M/s Avaya India Pvt. Ltd. vs. ACIT-1, [2013] 33 taxmann.com569 (Delhi-Trib.) 10. According to ld.AR in all the above cases, it has been held that the RPT filter ranging between 15 to 25% is to be taken into consideration and more than that should not be taken as comparables. The Ld. AR thus submits that the four comparable companies listed above are having higher RPT as compared to sales and therefore, they should not be selected as comparables. With regard to the comparable company at sl. No. 3 of above chart namely M/s Angel Financial Advisors Private Limited, the Ld. AR submitted that the companies is functional dissimilar as it is engaged in the distribution of 6 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT financial products vis-à-vis provisions of research support services and Revenue from distribution of Mutual Funds; therefore, the companies could not be included as comparable. The Ld. AR further submits that the assessee has also proposed new comparable companies namely SG Analytics Private Ltd (‘SG Analytics’) which is accepted by the ld. DRP in assessee’s own case as fit comparable in the order passed for Assessment Year 2018-19, and also passes all the quantitative filters of the TPO for year under appeal however, the same has not been taken into consideration. The Ld. AR further submits that the other two comparable companies as proposed by assessee namely Axience Consulting Private Limited (‘Anxience’) and Cyber Media Research and Service Limited (‘Cyber Media’) have also passed all the filters applied by assessee as well as modified filters applied by TPO and, therefore, these should be included in the final set of comparables. The ld. AR further submitted that the AO included additional compare companies proposed and identified by him for which the argument as made by the assessee are reproduced as under: 7 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT 8 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT 9 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT 11. The ld. AR fruther submits that the assessee has submittd before the ld. DRP that TPO has committed factual error in the working capital (OP/TC) computations for certain companies selected in the TPO’s Order. The Hon’ble DRP in para 6.25 has directed the AO/ TPO to consider the objections of assessee and direct to consider the correct margins after due verification. In complaince though the TPO made certain corrections but they are not in accordace with the claim made by the assessee and, accordingly, the ld. AR requested that the TPO/AO should be directed to take correct margins. Ld. AR thus, prayed for the deletion of the adjustments made by the AO. 12. On the other hand, the Ld. CIT-DR supported the order of the AO and TPO and submit that the TPO after considering the objections raised by the assessee, add certain fresh filters and select the financial set of comparable of six companies wherein the three comparables are same as were taken by the assessee itself and three fresh comparable companies were inserted after applying modified/fresh filters. He further submits that the TPO has also followed the directions of the Hon’ble DRP and took the corrected margins and, thus, there is no error in the order of AO and TPO and, therefore, he requested for the confirmation of the adjustment made. 13. Heard both the parties and perused the material available before us. The assessee has raised three objections. (i) selection of the comparable companies which have failed RTP filter; (ii) selection of comparable having dissimilar activities and (iii) by not including the companies suggested by the 10 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT assessee on the basis of modified filter applied. It is also seen that assessee has requested before the ld. DRP that the AO/TPO has not taken corrected margins, for which the ld. DRP in para 6.2.5 of its order directed the AO /TPO to consider the objections regarding computation of margins, however, as per assessee such exercise was not done at the end of AO/TPO. 14. In view of the above facts, we restore the issue back to the file of AO/TPO with direction to select fresh set of comparable after applying RPT filter where RPT filter with maximum filter criteria of 25% be taken as benchmark as has been upheld by the Hon’ble Jurisdictional High Court in various judicial pronouncement cited hereinabove. The AO/TPO is further directed to exclude M/s Angel Financial Advisors Private Limited from the final set of comparable as it is functionally dissimilar and re-worked out the comparable analysis of the companies suggested by the assessee as tabulated herein above. The AO/TPO is also directed to take the correct margins and applied the same accordingly. With these directions, the grounds of appeal No.2 to 2.11 of the assessee are partly allowed for statistical purposes. 15. Ground of Appeal No.4 is with regard to the levy of interest u/s 234B and 234C. In this regard, the assessee submitted that it is entered into Advance Pricing Agreement (APA) with CBDT which has resulted into enhanced income and thus additional tax was payable for the purpose of filing the modified return of income. While filing the modified return of income, the utility provided by the Govt. e-filing portal was taken wherein as per the utility provided interest u/s 234B and 234C is charged on modified income. The Ld. AR submitted that in terms of APA entered by the appellant with CBDT, it does not specify the payment of any interest u/s 234B and 234C on the additional tax liability as a result of enhanced margin, however, to validate the return of income, assessee has to make the excess payment of interest u/s 234B and 234C amounting to Rs.1,39,11,946/- which though actually was not payable. The Ld. AR submit that after filing the modified the return, a letter dated 21/06/2019 was filed along with a physical form of modified return where tax was computed (without interest u/s 234B and 234C on such 11 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT enhanced margin) and requested for a refund of Rs.1,39,11,946./- . The Ld. AR submit that this request was neither accepted by the AO/TPO nor by the DRP while disposing the objects. The Ld. AR further submitted that even the APA entered by the appellant of CBDT does not specified payment of interest u/s 234C of the Act on the additional tax liability pursuant to enhance margin. He also placed reliance on the judgment of the Hon’ble Co-ordinate Bench of ITAT, Delhi in the case of Colte Technology Services India Pvt. Ltd. [TS-216-ITAT-2022 (Del)-TP] wherein the Co-ordinate Bench of Tribunal held that the charging the interest u/s 234B and 234C on additional income arising out of APA between Assessee and CBDT is illegal. The Ld. AR also placed reliance on following judgments on the argument that the assessee could not reasonably estimate total income and advance tax liability due to circumstances beyond their control. - CIT vs. Anand Prakash [2009] 316 ITR 141 (High Court of Delhi) - Prime Securities Ltd. vs. ACIT [2011 333 ITR 464] (High Court of Bombay) - CIT vs. Rainbow Industries (P.) Ltd. 277 ITR 507 (High Court of Gujrat) - CIT vs. Bharat machinery & Hardware Mart [136 ITR 857] (High Court of Gujrat). - Patel Engineering Co. Ltd. vs. C.B. Rathi & Anr. [151 ITR 542) High Court of Gujrat). - R Mani vs. Chief Commissioner of Income-tax (Writ Petition No.21477 of 2004). 16. On the other hand, the Ld. CIT-DR submits that once assessee itself has computed interest and paid the same alongwith the modified return of income filed, there is no reason to refund the same. He, therefore, requested for the confirmation of the orders of the lower authorities on this issue. 17. Heard both the parties. It is seen that the assessee has filed modified return on 29.03.2019 in terms of APA entered with CBDT and, accordingly, the total income was computed at Rs.1,24,34,58,390/- as against the income declared in the revised return of income filed on 26.10.2018 at Rs.1,00,72,58,850/-. As per section 209 of the Act the advance tax has to be computed on the income estimated and since the assessee has already paid advance tax on its income which was declared return regular return filed u/s 139 of the Act (original as well as revised). The additional tax liability on 12 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT additional income computed because of enhanced margins as per APA entered with CBDT could not be foreseen when the estimation of income was made for the purpose of advance tax. Since, it is not possible for the assessee to file modify the return through e-filing portal unless the additional amount of interest u/s 234B and 234C was paid which was computed in accordance with utility provided by the official website of the Department, therefore, assessee was left with no alternate but to deposit the interest u/s 234CB and 234C so computed. Therefore, the claim of the assessee for refund of such excess payment of interest/s 234B and 234C of the Act is a genuine claim. The Co-ordinate Bench of the Tribunal in case of Colte Technology Services India Pvt. Ltd. (supra) has also of the view that any additional income on account of APA between assessee and CBDT should not be lead to additional interest liability of 234B and 234C of the Act. The observations of the Co- ordinate Bench in the case of Colte Technology Services India Pvt. Ltd. are as under: “35. We have heard the Ld. AR and also Ld. DR on the issue in dispute, we are agreeing with the argument of the Ld. AR 36. In the case of Prime Securities Ltd. Vs. Assistant Commissioner of Income Tax (Investigation), [2012] 20 taxmann.com 757 (Bombay), the Hon'ble High Court of Karnataka, while dealing with the issue of levying interest u/s sections 234A, 234B and 234C for non/short payment of advance tax installment and delay in payment of income tax held as under:- \"9 Perusal of the above provisions shows that liability to pay interest arises on failure of the assessee to pay advance tax under section 208 or advance tax payable under section 210 is paid less than 90 per cent. Perusal of the provisions of sections 208 and 209 shows that for the purpose of payment of advance tax the assessee has to estimate his current income and then he has to calculate income-tax on that income at the rate in force in the financial year. Thus, the amount of advance tax is to be decided by the assessee after estimating his current income and then applying law in force for deciding the amount of tax. It is an admitted position in the present case that the date on which the appellant paid the advance tax it had estimated its income and liability for payment of advance tax in accordance with law that was in force. Therefore, it is obvious that there was no failure on the part of the appellant to pay advance tax in accordance with the provisions of sections 208 and 209. So far as the judgment of the Supreme Court in the case of Ghaswala (20011 252 ITR 1 is concerned, the Supreme Court was concerned with the powers of the Settlement Commission in granting waiver of interest and for that purpose the Supreme Court considered the provisions of sections 234A, 234B and 234C. The Supreme Court in no uncertain terms held that the interest is compensatory in nature. The court read the provisions of sections 234A, 234B and 234C as mandatory in character holding that after the amendment in the provisions in the Finance Act, 1987, that with the use of the expression \"shall\" therein the Legislature clearly indicated that its intention to make the collection of statutory interest mandatory. It is for this purpose that the court proceeded to decide that 13 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT even the Settlement Commission which was vested with the vast power had no power to waive the interest payable under these provisions. Going by this interpretation of sections 234A, 234B and 234C as given by the Constitution Bench of the Supreme Court, it is clear that the interest is payable in case the advance tax is not paid in consonance with the law in force at the time when the advance tax is paid and there is a default. Therefore, for charging interest under section 234B, committing of default in payment of advance tax is condition precedent. Perusal of the judgment of the Delhi High Court, which is relied on by the learned counsel appearing for the respondent, shows that in that case also the Delhi High Court has held that for charging of interest establishment of default in payment of advance tax is necessary. In the present case, it is nobody's case that the appellant at the time of payment of advance tax has committed any default or that payment of advance tax made by the appellant was not in consonance with law. The Division Bench of this court in its judgment in the case of the appellant, referred to above, has held that the return filed by the appellant was in consonance with law and there was only a formal defect and the moment that defect was cured, the return related back to the original date. In our opinion, when the Supreme Court in Ghaswala's case (2001) 252 ITR 1 says that charging of interest under section 234B is mandatory, what it realty means is that once the assessee is found liable to pay interest, then recovery of interest is mandatory and recovery of that interest cannot be waived for any reason But for charging interest under that section, it has to be established that the assessee has committed default in payment of advance tax. In our opinion, as in the present case it is nobody's case that the appellant has committed a default in payment of advance tax when it actually paid it, the appellant cannot be held liable to pay interest under section 234B. In so far as the observations in the order of the Tribunal, that the appellant should have anticipated the events that took place in March, 1992 are concerned, in our opinion, they have no substance. In our opinion, it is rightly submitted that it was not possible for the appellant to anticipate the events that were to take place in the next financial year and pay advance tax on the basis of those anticipated events.\" 36.1. The similar views have been taken by the Hon'ble Delhi High Court in the case of Escorts Ltd. Vs. CIT [2003]127 Taxman 574 (Delhi), City Union Bank Ltd. Vs. Assistant Commissioner of Income Tax [2020] 116 taxmann.com 139 (Madras), CIT, Meerut Vs. Prem Kumar [2008] 169 Таxman 351 (Allahabad) and CIT Vs. Akbar Ali Dhala [2014] 226 Taxman 254 (Mad). 37. By following the ratio laid down in the judgment mentioned supra, we hold that, the levy of interest u/s 234B and 234C of the Income Tax Act on additional income agreed as per advance pricing agreement entered between appellant and the CBDT is illegal. Ergo, we allow the additional grounds of appeal.” 18. Since, the ratio laid down by the Co-ordinate Bench in the case of Colte Technology Services India Pvt. Ltd. (supra) squarely applicable to the facts of the present, thus, by respectfully following the same, we direct the AO/TPO to charge the interest u/s 234B and 234C on the final income determined ignoring the additional income offered by the assessee in the modified return filed based on the APA with CBDT. With these directions, the Grounds of appeal No.4to 4.1 of the assessee are allowed. 14 IT No.1948/Del/2021 Fil India Business & Research Pvt.Ltd. vs. DCIT 19. Ground No.5 is with regard to the non-granting of due credits of prepaid taxes. The AO is directed to allow the credit of all prepaid taxes after making necessary verification. 20. Ground No.6 is with respect to initiation penalty proceedings u/s 270A which is pre-matured at this stage and, thus, dismissed. 21. In the result, the appeal of the assesse is partly allowed. Order pronounced on 25.06.2025. Sd/- Sd/- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25.06.2025. PK/Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "