2022 (8) TMI 1364

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.... a private limited company engaged in the business of providing software development services to its AE. The assessee filed return of income on 30.11.2017 declaring total income of Rs.19,73,96,620. The case was selected for scrutiny under CASS and notice u/s. 143(2) was served on the assessee. A reference u/s. 92CA of the Act for computation of the ALP in relation to the international transaction was made to the Transfer Pricing Officer (TPO). The TPO made an adjustment of Rs.9,07,71,600 in the software development services segment and also made an adjustment towards interest on delayed receivables for an amount of Rs.47,86,977. Aggrieved, the assessee filed its objections before the DRP. 3. The assessee submitted before the DRP that payab....

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....he course of hearing and therefore dismissed as not pressed. Ground Nos.15 to 18 are consequential. The effective grounds considered for adjudication are as follows - (i) No Benchmarking analysis was done and an arbitrary interest rate of 6 months LIBOR plus 400 points (4.485%) was adopted without any basis - Gr. No. 14 (ii) No adjustment for interest on receivables if the company is debt free company - Gr. No 11 (iii) No adjustment for interest on receivables from AE if the assessee has not charged such interest on receivables from third party - Gr. No. 12 (iv) The TPO has not considered the fact that the appellant has Payables due to the AEs, which are substantially higher than the Receivables due from the AEs and no interest h....

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....uting interest on delayed receivable and has wrongly considered the weighted average period of receipt of payments as 256 whereas the actual is 51 days. The ld AR further submitted that the assessee has filed a petition u/s. 154 [pg. 496 & 497 of PB] for rectification these mistakes apparent on record but the AO has not still passed any order in this regard. The ld. AR submitted that the TPO ignored the fact that the assessee did not charge interest on delayed receivables from non-AEs. The assessee has receivables as on 31st March for an amount of Rs.24.35 crores whereas the receivable is Rs.14.96 crores and if the same are netted off, it would result in a negative receivables position, thereby not warranting levy of any interest on delayed....