TaxTMI 
TaxTMI 
2023 (11) TMI 47
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....d on behalf of the appellant/revenue seeking condonation of delay in filing the appeal. 2.1 According to the appellant/revenue, there is a delay of 79 days. 3. Ms Ananya Kapoor, who appears on behalf of the respondent/assessee, says that she would have no objection if the prayer made in the application is allowed. 3.1 It is ordered accordingly. 4. Consequently, the delay is condoned. The application is disposed of, in the aforesaid terms. ITA 586/2023 5. This appeal concerns Assessment Year (AY) 2014-15. 6. Via the instant appeal, the appellant/revenue seeks to assail the order dated 19.01.2023 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"]. 7. The appeal is confined to the exclusion of three comparables. The thr....
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....assessee and Infobeans, the said comparable was rejected. 11. As regards Cybercom, the findings of fact recorded by the Tribunal are that it is into diversified activities which includes provision of software services. It is indicated that segmental details concerning various segments are not available in public domain. 11.1. Importantly, the Tribunal highlighted that, unlike the respondent/assessee, Cybercom is the business of providing technical services. Based on this finding, the Tribunal has excluded Cybercom as a comparable. 12. This brings us to the third comparable i.e., Infosys. The Tribunal has discarded this comparable not on the ground of functional dissimilarity, but on the ground of risk-bearing capacity. 12.1. Insofar as ....
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....he arguments of the TPO. 2.5.2 Working capital adjustments is utilized when a tested party exhibits different working capital intensities relative lo a set of comparables. This is illustrated through two key areas of working capital adjustments: i. Inventory and accounts receivable adjustments; and ii. Accounts payable adjustments In brief, the profit of the comparable is to be adjusted as under depending on trade receivables/debtors, trade payables/creditors and inventories. Interest cost will be high if the trade receivables/debtors time cycle is large. Interest cost will be low if the company can pay its liabilities after a larger period of gap then pay it in a shorter period. Holding of inventory as also interest costs. 2.5.3 ....
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....noted the assertions made on behalf of the respondent/assessee that it permitted a ninety (90) days credit period. On behalf of the appellant/assessee, it had been emphasized that once the credit period exceeded ninety (90) days, interest had to be charged. It is on this account that adjustment was ordered with regard to the receivables. 19. The Tribunal, as indicated above, has relied upon its decision dated 01.11.2021 for AY 2015-16 and concluded that the said issue needed to be restored to the Assessing Officer (AO) for verifying the respondent/assessee's claim, keeping in view its aforementioned decision, albeit, after providing reasonable opportunity of hearing to the respondent/assessee. 20. In our view, on this score as well, no in....
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....of the comparables and, therefore, "any further adjustment to the margins of the Assessee on the pretext of outstanding receivables is unwarranted and wholly unjustified. xxx xxx xxx 10. The Court is unable to agree with the above submissions. The inclusion in the Explanation to Section 92B of the Act of the expression 'receivables' does not mean that de hors the context every item of 'receivables' appearing in the accounts of an entity, which may have dealings with foreign AEs would automatically be characterised as an international transaction. There may be a delay in collection of monies for supplies made, even beyond the agreed limit, due to a variety of factors which will have to be investigated on a case to case basis. Importantly....