TaxTMI 
TaxTMI 
2021 (9) TMI 1422
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....d "Ld. DRP") for the assessment year 2016-17. 2. Brief facts of the case are that the assessee is a company and was engaged in the business of consulting in the field of an environmental, health and safety, social land and natural resources management. For the assessment year 2016-17, they have filed a return of income on 30/11/2016 declaring an income of Rs.10,02,95,050/-. Noting that the assessee company made international transactions with the Associated Enterprises ("AEs"), the determination of arm's-length price was referred to the Ld. Transfer Pricing Officer ("Ld. TPO"). By order dated 28/10/2019, Ld. TPO suggested to enhance the income of the assessee by Rs.2,10,22,69/-on account of interest on receivables from the AEs. After hea....
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....hmarking of the interest on receivables could be resorted to. 4. By order dated 17/11/2020 Ld. DRP held that the decision in Kusum Healthcare Private Limited (supra) cannot be followed in view of the amendment brought about by Finance Act, 2012 whereby a new Explanation was inserted with retrospective effect from 01.04.2002 and Explanation (i) (c) of section 92B of the Act created a deeming fiction treating the payments or deferred payments of receivables or any other debt arising during the course of business as a separate international transaction. Ld. DRP also referred to the deletion of the Hon'ble Bombay High Court in the case of CIT vs. Patni Computer Systems Ltd (2013) 215 Taxman 108 (Bom) and also the decision of the Tribunal in ....
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.... with retrospective effect from 1/4/2002 and inception of Explanation (i) (c) of section 92B of the Act creating a deeming fiction treating the payments or deferred payment of receivables or any other debt arising during the course of business as a separate international transaction, provides a complete answer to the question involved in this matter and therefore, the decision of the Hon'ble Bombay High Court in the case of Patni Computer Systems Ltd (supra) and Bechtel India Private Limited (supra) rightly followed by the Ld. DRP. According to him no interference with the impugned order is warranted in this matter. 7. We have gone through the record in the light of the submissions made on either side.Ld. DRP, did not follow the decision....
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.... on account of interest income short charged/uncharged. Hon'ble High Court, however, by the order dated 07.02.2018, on the question with respect to the notional interest attributed to the assessee and for which adjustment was made by the Transfer Pricing Officer (TPO), opined that having regard to the considered view in the case of Pr. CIT v. Kusum Health Care (P.) Ltd. [2017] 398 ITR 66 (Delhi), the matter requires further examination/scrutiny; the reasons for the credit or delay in payment needs to be examined and on that ground remanded the matter. 9. Order dated 07.02.2018 in ITA 461/2017 & ITA 526/2017reads thus: The other question urged with respect to the notional interest attributed to the assessee and for which adjustme....
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....variety of factors which will have to be investigated on a case to case basis. Importantly, the impact this would have on the working capital of the Assessee will have to be studied. In other words, there has to be a proper inquiry by the TPO by analysing the statistics over a period of time to discern a pattern which would indicate that vis-à-vis the receivables for the supplies made to an AE, the arrangement reflects an international transaction intended to benefit the AE in some way. 11. The Court finds that the entire focus of the AO was on just one AY and the figure of receivables in relation to that AY can hardly reflect a pattern that would justify a TPO concluding that the figure of receivables beyond 180 days consti....