Appeal Dismissed: ITAT Decision on Intra-Group Services Payment Upheld, No Substantial Question of Law Found.

PR. COMMISSIONER OF INCOME TAX-1 Versus AVERY DENNISION (I) PVT. LTD.

PR. COMMISSIONER OF INCOME TAX-1 Versus AVERY DENNISION (I) PVT. LTD. - TMI Issues:
1. Challenge to the ITAT order regarding addition made by the Transfer Pricing Officer (TPO) for intra-group services payment.
2. Consideration of interest on outstanding receivables as an international transaction.
3. Application of previous judgment on infra group services from the Court dated 28th July, 2016.
4. Justification for not charging interest on delayed payments by AEs and non-AEs.

Analysis:

1. The appellant challenged the ITAT order regarding the addition made by the TPO for intra-group services payment. The counsel argued that the ITAT erred in deleting the addition and in holding that the payment for intra-group services was for commercial expediency. The ITAT was accused of not considering interest on outstanding receivables as an international transaction, as required by the Income Tax Act. The Court referred to a previous judgment from 2016 in the assessee's own case, where it was held that the TPO cannot split the agreement between the assessee and its associated enterprise for determining arm's length services. The Court found the ITAT's view plausible and did not interfere.

2. The Appellate Authorities accepted the assessee's contention regarding interest on delayed payments by AEs and non-AEs. It was justified that the assessee did not charge interest on delayed payments by AEs and did not levy interest on delayed payments made by non-AEs, as the debtor days given to non-AEs were more than those given to AEs. The ITAT noted that sometimes 120 days were given to non-AE entities for payment from the billing date. Additionally, it was accepted that during the Financial Year 2008-09, the assessee had a net monthly balance payable to AEs, contrary to the Assessing Officer's claim of monthly balance receivable from AEs. Given the concurrent findings of facts by the Appellate Authorities, no substantial question of law arose for consideration, leading to the dismissal of the appeal.

In conclusion, the judgment addressed various issues related to transfer pricing, international transactions, application of previous judgments, and justification for not levying interest on delayed payments. The Court's decision was based on a thorough analysis of the facts and legal principles involved in the case, leading to the dismissal of the appeal based on the established findings and conclusions by the lower authorities.