2020 (12) TMI 391

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....s of the ld. Dispute Resolution Panel (DRP in short) u/s. 144C(5) of the Act dated 21/08/2017 for the A.Y. 2013-14. 2. Though the assessee has raised several issues vide ground Nos. 1 & 2 in its appeal, we find that the effective issue to be decided in the instant appeal are as under:- (a) Whether outstanding receivables could be considered as a separate international transaction and imputation of interest thereon could be made? (b) Whether separate adjustment to arm's length price of outstanding receivables could be made, if working capital adjustment is granted to the assessee? 3. We have heard rival submissions and perused the materials available on record. Hexagon Capability Center India Private Limited ("Hexagon India" or "th....

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...., the ld. TPO rejected the contentions of the Assessee and proposed to charge interest @ 14.45% pa towards the interest on the receivables for the delayed period to arrive at the arm's length price amounting to INR 5,48,42,358. 3.4. Before the Ld. DRP, the assessee filed the following objections: Making TP adjustment by imputing interest on outstanding receivables as on March 31st 2013 relating to sales of services to AE's: * Not appreciating the fact that under TNMM, the impact of outstanding receivables on the working capital adjustments have already been taken into account in determining the arm's length margin hence there is no need of imputing interest on outstanding receivables again; * Not appreciating the fact that ....

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....utstanding receivables, Ld. AO passed the final assessment order after considering the short term deposit rates. The revised transfer pricing adjustment was computed at Rs. 2,36,29,848. 4. Aggrieved by the above directions, the assessee has preferred an appeal before us. 5. We find at the outset that the ld. AR submitted that this issue is covered by the order of this Tribunal dated 08/06/2018 for A.Yrs. 2011-12 and 2012-13 in ITA No. 251/Hyd/2016 and 84/Hyd/2017 respectively. 5.1. Per contra, the ld. DR submitted that the assessee had not submitted working capital adjustment workings before the ld. TPO. In defence, the ld. AR submitted that the ld. TPO had substituted his fresh set of comparables and in turn had granted working capital ....

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....r, the differential impact of working capital of the assessee vis-à-vis its comparables has already been factored in the pricing/profitability of the assessee and therefore, any further adjustment to the margins of the assessee on the pretext of outstanding receivables is unwarranted and wholly unjustified." 12. We find that the Hon'ble High Court of Delhi has confirmed the decision of the ITAT and the SLP filed by the Revenue is pending before the Hon'ble Supreme Court. We find that in the case of EPAM Systems India Pvt. Ltd. in ITA No. 192/Hyd/2017 dated 24.10.2017, Coordinate Bench of this Tribunal has followed the decision of the Hon'ble Delhi High Court in the case of Kusum Healthcare Pvt. Ltd., to hold that workin....