https://www.taxtmi.com/caselaws?id=756118 The Delhi HC ruled against the revenue in a transfer pricing case involving two key issues. First, regarding outstanding receivables from associated enterprises beyond 180 days, the court held that recharacterizing these as unsecured loans was impermissible since the assessee had already factored receivables' impact on working capital in its pricing analysis. Any further adjustment would distort the transaction picture. Second, concerning management fee payments for intra-group services, the court upheld that the Transfer Pricing Officer cannot disallow expenditure on commercial expediency grounds if incurred for business purposes. The TPO must examine actual transactions and cannot restructure them unless economic substance differs from form or arrangements differ from what independent enterprises would adopt commercially. en-us Thu, 11 Jul 2024 00:00:00 +0530 Fri, 26 Jul 2024 14:48:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=756118 The Delhi HC ruled against the revenue in a transfer pricing case involving two key issues. First, regarding outstanding receivables from associated enterprises beyond 180 days, the court held that recharacterizing these as unsecured loans was impermissible since the assessee had already factored receivables' impact on working capital in its pricing analysis. Any further adjustment would distort the transaction picture. Second, concerning management fee payments for intra-group services, the court upheld that the Transfer Pricing Officer cannot disallow expenditure on commercial expediency grounds if incurred for business purposes. The TPO must examine actual transactions and cannot restructure them unless economic substance differs from form or arrangements differ from what independent enterprises would adopt commercially. Case-Laws Income Tax Thu, 11 Jul 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=756118