2022 (3) TMI 1459

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....ee though filed a circular issued by the parent company of the assessee but did not place any reliance on that. Thus, the grounds No. 6 to 11 of the above appeal are required to be adjudicated. 3. These grounds of appeal are as under:- "Adjustment on account of payment of interest on trade credits of INR 29,79,359/- On facts and circumstances of the case, the learned CIT(A): 6. erred in confirming the action of TPO/AO in making transfer pricing adjustment on the international transaction of payment of interest on trade credits to its AE and computing the ALP at NIL by adopting Internal CUP method; 7. erred in ignoring the contractual terms of the Appellant with its AE in respect of charge of interest post availing interest perio....

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....It is claim of the assessee that neither the assessee nor the Associated Enterprises performed any significance function or carried any significance risk. Before LD TPO, assessee explained that benchmarking as stated above. The learned Transfer Pricing Officer noted that assessee has paid interest to Associated Enterprises but has not paid any interest to non Associated Enterprises on outstanding balances. The assessee could not submit any document in support of the claim that the credit allowed to non Associated Enterprises was less than the credit period allowed to associated enterprises. He further noted that the charts submitted by the assessee with respect to the interest paid shows the period of credit of less than 30 days. He further....

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....essment Years 2010-11 to 2013-14 on identical basis. He also referred to invoices placed in the paper book where the specific terms of payments were mentioned of 90 days due with respect to associated enterprises. He therefore submitted that up to 90 days the credit was allowed by associated enterprises. He similarly referred to paper book submitted on 20 January 2022, wherein the invoices with associated enterprises were placed showing that there is credit period of 90 days. He further referred to some invoices with non-associated enterprises where the terms of payments are 30 days. The learned Authorised Representative therefore stated that the learned Transfer Pricing Officer has erroneously held that there is an internal CUP available d....

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.... material from its AE and Non AE. NON-AEs allow payment credit to assessee of 30 days whereas the credit period allowed by AE is 90 days. Assessee pays interest @ 5.50 % p.a. that assessee is paying interest to its Associated Enterprises for payment beyond 90 days of the invoices value at the rate of 5.5% p.a. The above international transaction amounting to Rs.29 lacs was aggregate with other transactions and benchmarked adopting the Transactional Net Margin Method as the most appropriate method and found that the profit level of the assessee which was better than comparable companies it was held to be at arm's length. The learned Transfer Pricing Officer hold that assessee has not paid any interest to non Associated Enterprises, therefore....