AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 1105
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....The grievances raised by the assessee read as under: "On the facts and circumstances of the case and in law, the Hon'ble DRP vide its directions dated 28 March 2019 grossly erred in upholding addition pertaining to interest on outstanding receivables made by the Learned AO to returned income of the Appellant vide draft assessment order dated 21 December 2018 passed under section 143(3) of the Act. Each of the ground is referred to separately, which may kindly be considered independent of each other and without prejudice to each other. That on the facts and circumstances of the case and in law, 1. The Learned AO/ TPO/ DRP have erred in making an addition of INR 21,231,519 to the total income of the Appella....
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....d DRP/ TPO, should be considered to establish arm's length interest. While computing the tax demand, a TDS credit of INR 24,114,498/- has been given to the applicant instead of INR 24,258,487 as claimed in the return of income and appearing in Form 26AS for the year under consideration. 5. The Learned AO has grossly erred both in facts and in law in proposing to charge interest under section 234A, 234B and 234C of the Act. 6. The Learned AO has erred in initiating penalty under section 271(1)(c) of the Act. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. The Appellant prays for ap....
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....ecured loan advances to AEs and determining the ALP without giving due consideration to the price charged under uncontrolled scenario. 7. It was further objected for application of SBI base rate plus 300 basis points for computing interest on receivables instead of using LIBOR as the bench-mark interest rate. 8. Objections of the assessee were dismissed by the DRP. 9. Before us, the ld. counsel for the assessee, at the very outset, requested for admission of additional evidences. It is the say of the ld. counsel for the assessee that the assessee is engaged in the business of providing software consulting, systems design, enterprise application and computer programming services to its customers in India and outside India. 10. It....
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....ow qua the issue. We find force in the contention of the ld. counsel for the assessee. Since the assessee has provided similar services to unrelated parties and claims that no interest was charged with respect to outstanding receivables from unrelated parties, in all fairness, this contention cannot be brushed aside lightly, though needs due verification by lower authorities. 15. We, therefore, restore this issue to the file of the TPO/Assessing Officer. The assessee is directed to furnish necessary documentary evidences to demonstrate that on outstanding receivables from unrelated parties, no interest was charged on similar transactions as that with AEs and the Assessing Officer/TPO is directed to examine the same and decide the issue a....
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....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 constitutes an international transaction by itself." 48. In light of the aforementioned findings of the Hon'ble High Court, the contention of the assessee that no interest has been charged from non-AEs on similar delay cannot be brushed aside lightly. In fact, in the case of Aura OI SAS, delay was of 81 days and in the case of Sabi Foods, delay was of 52 days and no interest was charged by the assessee. 49. We have elsewhere mentioned the operating profit margin of the assessee vis a vis comparable companies from where it can be seen that the operating profi....