2018 (8) TMI 2094

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....order of the ITAT, 'C' Bench, Bangalore, dated 26.10.2017 passed in IT(TP)A No.681/Bang/2017 for the A.Y.2012-13. 2. The proposed substantial question of law framed in the Memorandum of appeal by the Appellants-Revenue is quoted below for ready reference:- "Whether, on the facts and circumstances of the case, and in law, the Tribunal was right in law holding that extra credit allowed can be considered as an independent international transaction and the same be compared with the internal CUP being average cost of the total funds available to the assessee, directed the TPO to find out the cost of the total funds available to the assessee and same should be adopted as internal CUP for benchmarking of this independent international ....

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....party with that of the comparables and therefore, if the profit of the tested party is equal or above the profit of comparables, even after taking into account the effect of working capital adjustment and the ALP is less that the price charged by the tested party, it cannot be said that the extra credit allowed is not an independent international transaction and not required to be separately benchmarked. In our considered opinion, the first requirement is this that it has to be first decided that whether it is an independent international transaction or not and if it is found that it is not so, then obviously, no separate benchmarking is required but if it is found that it is an independent international transaction then separate bench maki....

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....ion and the same be compared with internal CUP being average cost of the total funds available to the assessee. Respectfully following this tribunal order, we direct the A.O. to find out the cost of the total funds available to the assessee and the same should be adopted as internal CUP for benchmarking of this independent international transaction i.e. allowing extra credit in addition to agreed credit period of 30 days". 4. However, this Court in a recent judgment in ITA No.536/2015 C/w ITA No.537/2015 delivered on 25.06.2018 (Prl. Commissioner of Income Tax & Anr. Vs. M/s. Softbrands India Pvt. Ltd.,) has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is est....