ITAT allowed the appeal and set aside the transfer pricing...

ITAT allowed the appeal and set aside the transfer pricing adjustment imputing notional interest on intercompany receivables. The Tribunal held the receivable balances arise from integrated commercial transactions and cannot be treated as independent standalone loans; after excluding imputed interest the taxpayer's net margin exceeded the comparable mean, negating any adverse TP adjustment. The Tribunal noted uniform non-charging of interest, the appellant's debt-free status and absence of actual interest expense, and that working-capital adjustments in comparables already account for receivable effects. The use of an inflated LIBOR-plus mark-up to compute interest on short-period receivables was held unjustified, and the grounds of appeal were allowed.