TaxTMI 
TaxTMI 
2019 (8) TMI 1749
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....] passed u/s 143(3) rws 144C of The Income tax Act [The Act] in pursuance to Direction of The Dispute Resolution Panel - 1, New Delhi [ The ld DRP] passed u/s 144C (5) of the Act on 29/03/2019 issued on objection filed by the Assessee against draft order of assessment passed by the ld AO on 30/11/2018 where in transfer pricing adjustment u/s 92CA (3) of the act proposed by the Additional Commissioner of Income tax , Transfer Pricing Officer -1 92), New Delhi [ The Ld TPO] per order dated 28/9/2018 were incorporated. 2. The assessee has raised the following grounds of appeal:- "1. That, the final assessment order framed by the learned Deputy Commissioner of Income- tax, Circle - 6(2), New Delhi (hereinafter referred to as "the Ld. AO")....
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....s erred in not appreciating the fact that since the weighted average period of realization of inter-company invoices of 36.12 days is less than the credit period of 60 days as stipulated in the intercompany agreement, no TP adjustment in respect of notional interest on outstanding receivables is warranted. 2.4 That on the facts of the case and in law, the Ld. AO/ Ld. TPO/ Hon'ble DRP has erred in making TP adjustment on notional interest on outstanding receivables from AEs even though no interest was charged for delayed realisation from third party customers as well. 2.5 That on the facts of the case and in law, the Ld. AO/ Ld. TPO/Hon'ble DRP has erred in not considering the period of 90 days, as provided under section 92CE of the In....
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....ervices from associated enterprises 979542202/- 3 Receipt of legal and professional charges from associated enterprise 498230/- 4 Reimbursement of expenses paid to associated enterprise 26018514/- 5 Reimbursement of expenses from associated enterprises 71799201/- 4. Assessee also entered into certain specified domestic transactions. In the transfer pricing documentation all the international transactions and specified domestic transactions were aggregated and Transactional Net Margin Method [ TNMM] was used as the Most Appropriate Method [ MAM] adopting the profit level indicator [PLI] of operating profit to operating cost (OP/OC) which was calculated of the assessee at 14.13 % whereas the profit level indic....
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....ssessed at INR 147,82,17,210/- against the returned income of INR 147,51,34,650/-. The assessee aggrieved with the order of the learned assessing officer has preferred this appeal before us. 7. The only dispute in this appeal is adjustment to the international transaction of the assessee on account of the arm‟s-length price with respect to the interest on overdue receivable of INR 3082559/-. 8. The learned authorised representative submitted that the working capital adjustment has been granted by the learned transfer pricing officer himself while computing the arm‟s length price of the provision of ITES services to associated enterprises and further the working also considered in the learned transfer pricing officer‟....
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....rking capital adjustment worked out. Thus, if the adjustment proposed by the learned transfer pricing officer and approved by the learned dispute resolution panel accepted working capital adjustment, then it will amount to double addition in the hands of the assessee. Further the issue is also squarely covered by the decision of the honourable Delhi High Court in case of PRINCIPAL COMMISSIONER OF INCOME TAX VS KUSUM HEALTHCARE PRIVATE LIMITED wherein para number 11 of the decision the honourable High Court has accepted the reasoning that with the assessee having already factored in the impact of the receivable on the working capital and thereby on its pricing/profitability and that of its comparables, any further adjustments only on the bas....