2018 (4) TMI 926

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.... assessee in various grounds of appeal relates to Transfer Pricing Adjustment of Rs. 79,89,255/- on account of re-characterizing of the outstanding receivables from overseas AEs as loan facility and thereby imputing interest at the rate equal to annual average yield of 5 year 'BB' rated bond by considering all the receivables to be outstanding for over 365 days. 3. The assessee is a wholly owned subsidiary of 'Genpact India Holdings, Mauritius', which in turn is held by 'Genpact Ltd. Bermuda'. The assessee is engaged in the business of providing risk consulting, advisory and risk assurance solutions. The company's services are in the nature of risk assurance, business improvement, business risk assessment, corporate governance, business ....

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....of 'BB' rated bond for five year should be applied; and accordingly, made the adjustment after detailed calculation which worked out to Rs. 79,89,255/-. The DRP has confirmed the said action of the TPO. 5. Before us, the ld. counsel for the assessee, at the outset, submitted that the assessee has rendered similar services to non AEs/ unrelated parties and from unrelated parties it has also not charged any interest from the receivables and thus, there is an internal CUP for benchmarking the transactions, i.e., both for the controlled and uncontrolled transactions assessee has not been charging interest, and therefore, no adjustment should be made. In support, he has given the following tabulation showing that no interest has been charged ....

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.... be applied in view of the settled proposition laid down by the Hon'ble Jurisdictional High Court in Cotton Naturals and in many other cases. 8. After considering the rival submissions and on perusal of the relevant findings and material placed on record, the only dispute before us is with regard to the adjustment by way of imputing interest @ 17.22% by the TPO on account of receivables from the AE. Here in this case, it is an undisputed fact that the assessee has also rendered similar services to non AEs/unrelated parties and on receivables from the non AEs also, there have been delays on receivables on which no interest has been charged by the assessee. Before us, invoice wise details have been furnished highlighting the details of....