TaxTMI 
TaxTMI 
2025 (12) TMI 1851
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....f the Income Tax Act, 1961 [the Act] dated 26.7.2024 by the Assessment Unit Wing, the returned income of the assessee of Rs.376,97,67,880 is assessed at Rs.411,40,53,437. 2. The ld. AO made a disallowance of Rs.3,75,70,351 u/s. 80G of the Act, disallowed Rs.84,92,596 u/s. 14A of the Act and further disallowed deduction of health cess of Rs.3,64,87,901. 3. The only issue with respect to Transfer Pricing (TP) adjustment is the determination of arm's length price of interest on overdue receivable from its AEs determined as separate international transaction of capital financing of Rs.16,61,21,349. 4. Before us, the assessee has placed ground No.5 of the appeal. As per ground No.5.3, the only contention raised before us is that if ....
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....nchmarked separately. Based on this, he computed the interest on overdue receivable amounting to Rs.16,61,21,349 adopting 6 months LIBOR rate + 450 Basis Points and treating it as a Comparable Uncontrollable Price (CUP) adopting benchmarking rate of interest at 6.81%. 7. When the assessee filed objections before the DRP, vide para 4.12 assessee submitted that working capital adjustment if granted to the assessee would take into account the difference in the level of account of receivables. The ld. DRP held that assessee has not filed any factual information as to the extended credit period and its impact on the profitability or pricing of the transaction and therefore it rejected the plea of the assessee that working capital adjustment w....
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....5,63,244. However, this adjustment was deleted by the DRP. However, the adjustment with respect to interest on overdue receivable from AEs remains. Therefore if the adjustment is granted to the assessee of working capital adjustment, then the separate adjustment with respect to interest on overdue receivable would not sustain. The ld. TPO has rejected the same because taxpayer has failed to demonstrate that working capital differences has made any impact on the margin of the assessee as well as the comparables. We find that before us also no such computation was furnished. However, we find that as per para 16, the TPO has proposed 10 comparable companies and computed the adjustment with respect to manufacturing and distribution segment of t....
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....ties. In case revenue authorities are not satisfied with the ALP and the supporting documents/information furnished by the taxpayer, the authorities have ample power to determine the same and make suitable adjustments. In such a situation, as rightly admitted in the ground of appeal by the revenue, this responsibility of determination of ALP is shifted to the revenue authorities who are to determine the same in accordance with statutory regulations." Thus the revenue authorities cannot now shift the onus on the assessee to prove that it must be allowed working capital adjustments, when Revenue has selected the comparable and determined ALP of International Transaction. 13. Therefore, the unnecessary onus put by the ld. TPO on the asse....