TaxTMI 
TaxTMI 
2023 (4) TMI 672
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....ed company engaged in the business of providing contract software development services to its Associated Enterprises (AEs) outside India. For the assessment year 2018-2019, the return of income was filed on 30.11.2018 declaring total income of Rs.16,24,48,710. The return was processed u/s 143(1) of the I.T. Act vide order dated 01.10.2019 by the CPC. The following adjustment was made to the total income by the CPC :- Particulars Amount as per ITR Amount as per 3CD Adjustment in intimation Disallowance u/s 43B of the I.T. Act 2,53,608 72,77,987 70,24,379 ESI/PF amount not remitted before due date -- 1,440 1,440 3. The CPC accordingly determined the income of the assessee at Rs.16,94,74,527 as against the income of Rs.16,24,48,71....
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....74,530 Add : TP adjustment on delayed receivables 23,28,370 Assessed income 17,18,02,900 5. Aggrieved by the impugned final assessment order dated 25.07.2022, the assessee has filed the present appeal before the Tribunal. The assessee had raised 15 grounds. However, during the course of hearing, the learned AR has confined his submission to grounds 7 and 8 with regard to TP adjustment on interest on outstanding receivables and ground No.10 with regard to disallowance u/s 43B of the I.T. Act (adjustment made in the intimation u/s 143(1) of the I.T. Act). We shall adjudicate the grounds pressed, as under: Grounds 7 and 8 (TP Adjustment) Interest on outstanding receivables. 6. The brief facts in relation to the above grounds are as fo....
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....tors or suppliers on delayed payments. The learned AR by placing reliance on the order of the Delhi Bench of the Tribunal in case of Bechtel India Pvt. Ltd. v. DCIT in ITA No.1478/Del/2015 (order dated 21.12.2015), submitted that since the assessee is a debt free company, no adjustment can be made towards notional interest on receivables. Further, the learned AR submitted that the assessee has trade receivables is Rs.10.57 crore as on 31.03.2018 and AE trade payable is Rs.12.54 crore. It was stated that if the same are netted of, it would result in negative receivable position and thereby would not warrant levy of any interest on delayed receivables. Finally, the learned AR by relying on the Bangalore Bench order of the Tribunal in assessee....
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....mputational errors where he has taken the payable figure taken as receivable for computing 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 ....
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....nity of being heard. The assessee is free to raise all the contentions before the AO/TPO." 11. Since the facts are identical for the relevant assessment year with that of the assessment year considered by the Tribunal for assessment year 2017-2018 (supra), by following the co-ordinate Bench order of the Tribunal in assessee's own case, we restore the grounds 7 and 8 with regard to the TP adjustment on interest on outstanding receivables to the files of the AO / TPO. The AO / TPO is directed to follow the directions of the ITAT in assessee's own case for assessment year 2017-2018. It is ordered accordingly. 12. In the result, grounds 7 and 8 are allowed for statistical purposes. Ground 10 : Disallowance u/s 43B of the I.T. Act. 13. We ....