TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 2142
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.... facts and circumstances of the case and in law, the Ld. Commissioner of Incometax (Appeals) ["CIT(A)") erred in confirming the transfer pricing adjustment on account of interest on outstanding receivables from Associated Enterprise ('AE'). 2. The on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in not appreciating the fact that such outstanding receivables cannot be equated to 'capital financing' under the amended definition of international transaction u/s 92B. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the notional adjustment made by the Ld. AO / Ld. TPO towards interest on receivables by completely ignoring the Jurisdictional Tribunal ru....
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.... adjustment with regard to interest on receivables. Brief facts relating to the above grounds of appeal are, assessee is engaged in the business of promotion and availability of good quality therapeutic products filed its return of income for the AY 2013-14 on 29/11/2013 admitting income of Rs. 6,52,37,970/-. The return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS. Accordingly, notices u/s 143(2) and 142(1) were issued and served on the assessee. 2.1 During the year under consideration, assessee has entered into international transactions and accordingly, the case was referred to Transfer Pricing Officer (TPO) for determining ALP. Assessee has entered into following internationa....
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....ording to him, once receivables are international transactions, then, its ALP has to be determined. In such situation, any independent party would like to receive its funds within the credit period allowed and, if not, would normally charge interest. He relied on the case of Logix Micro Systems Ltd., 42 SOT 525, in which, Tribunal held that a reasonable period should be provided as 'interest-free' period and no interest should be calculated for such period. Accordingly, TPO has calculated ALP adjustment as per the below table after 30 days grace period and charged interest @ 14.45%.: Invoice No Date of raising invoice (MM/DD/YYYY) Amount Received date (MM/DD/YYYY) Delay in No of days Delay after 30 days credit period Interest adjus....
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....3 202 172 10972 389 2/27/2013 120305 9/17/2013 202 172 8192 390 2/27/2013 64070 9/17/2013 202 172 4363 391 2/27/2013 217837 9/17/2013 202 172 14833 415 3/14/2013 123533 9/17/2013 187 157 7678 416 3/14/2013 175154 9/17/2013 187 157 10887 417 3/14/2013 131541 9/17/2013 187 157 8176 418 3/19/2013 83824 9/17/2013 182 157 5044 419 3/22/2013 94013 9/17/2013 179 149 5546 420 3/22/2013 253162 9/17/2013 179 149 14933 428 3/29/2013 69130 9/17/2013 172 142 3886 429 3/29/2013 104483 9/17/2013 172 142 5874 398 2/28/2013 2456090 4 5/6/2013 67 37 359767 399 2/28/2013 3317682 3 5/6/2013 67 37 485972 437 3/29/2013 3041282 3 6/14/2013 77 47 565887 438 3/29/....
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....he rate of interest on domestic term deposit of SBI instead of 14.45% with a clear cut direction to restrict the interest up to the end of the year vide paras 5.12 and 5.13 of his order. 6. Aggrieved with the order of CIT(A), the assessee preferred an appeal before us making similar submissions as was made before the ld. CIT(A) and also brought to our notice the decision of the coordinate bench of this Tribunal in the case of GSS Infotech Ltd., in ITA No. 497/Hyd/2015, order dated 29/04/2016, a copy of which has been filed on record. 7. Ld. DR, on the other hand, relied on the order of CIT(A). 8. Considered the rival submissions and perused the material on record. In the case of GSS Infotech Ltd. (supra), the coordinate bench on similar ....