2026 (6) TMI 462

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....f appeal, the assessee has raised 04 grounds and sub grounds of appeal challenging the transfer pricing adjustment and corporate tax adjustment, which we for the sake of brevity are not inclined to reproduced here. 3. At the outset, we note that ground No. 1 along with sub-grounds 1 and 2 and ground No. 5 along with sub-grounds 1 to 3 are general in nature and does not call for any fresh adjudication. Hence, the same are dismissed as general. 4. Ground Nos. 2 and 3 raised by assessee are interconnected and pertains to notional interest on trade receivables. 5. The brief facts of the case on hand are that the assessee, a public limited company, is engaged in the business of process management. The assessee filed its return of income....

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....tion from non-AE is 66 days. The assessee also submitted that the TPO erred in not netting off the opening and closing deferred payables to the non-resident AEs, in computing the notional interest. Further, the assessee submitted that the AO/TPO erred in re-characterization of delayed realization of trade receivables as a loan transaction. The assessee also relied on various judicial precedents in this regard. Hence, prayed that the same should be deleted. However, the Ld. DRP, upheld the action of the ld. TPO. 8. Aggrieved by the actions of the Ld. DRP, the assessee preferred an appeal before us. 9. The Ld. AR before us has filed a paper book running from page Nos. 1 to 503 and a compilation of case laws. Among various contentions, o....

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.... interest thereon by adopting the SBI PLR Rate i.e. 12.26%. Regarding the contention being debt-free company, no notional interest can be imputed on delayed receivables from its AEs, we find merit in this contention. The Hon'ble Delhi High Court in the case of Principal Commissioner of Income-tax vs. Inductis India (P.) Ltd. [2023] 157 taxmann.com 87 (Delhi) dated 04-12-2023 has held that where the assessee is a debt-free company, the question of charging notional interest on receivables does not arise and such TP adjustment is liable to be deleted. The said view has attained finality, as the SLP filed by the Revenue has been dismissed by the Hon'ble Supreme Court in Pr. Commissioner of Income-tax Delhi vs. Inductis India (P.) Ltd. reported....