https://www.taxtmi.com/caselaws?id=343227 The ITAT Delhi held that interest on delayed payment of receivables from associated enterprises constitutes a separate international transaction requiring independent arm's length price determination, distinct from working capital adjustments. The tribunal rejected the assessee's contention that such interest gets subsumed in working capital adjustments, following precedents in Ameriprise India and McKinsey Knowledge Centre cases. The court clarified that working capital adjustments apply only to service rendering transactions and cannot impact the separate benchmarking requirement for interest on overdue receivables. The tribunal also dismissed the argument that being debt-free exempts the company from interest attribution on delayed realizations, emphasizing that this represents a distinct international transaction. The ITAT upheld the Dispute Resolution Panel's direction to compute adjustments using six-month LIBOR plus 400 basis points for USD receivables, consistent with Cotton Naturals HC precedent regarding current year interest rate determination. en-us Tue, 16 May 2017 00:00:00 +0530 Fri, 12 Jun 2026 12:02:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=343227 The ITAT Delhi held that interest on delayed payment of receivables from associated enterprises constitutes a separate international transaction requiring independent arm's length price determination, distinct from working capital adjustments. The tribunal rejected the assessee's contention that such interest gets subsumed in working capital adjustments, following precedents in Ameriprise India and McKinsey Knowledge Centre cases. The court clarified that working capital adjustments apply only to service rendering transactions and cannot impact the separate benchmarking requirement for interest on overdue receivables. The tribunal also dismissed the argument that being debt-free exempts the company from interest attribution on delayed realizations, emphasizing that this represents a distinct international transaction. The ITAT upheld the Dispute Resolution Panel's direction to compute adjustments using six-month LIBOR plus 400 basis points for USD receivables, consistent with Cotton Naturals HC precedent regarding current year interest rate determination. Case-Laws Income Tax Tue, 16 May 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=343227