2026 (8) TMI 543

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....e Income Tax Act, 1961 (in short "the Act"), dated 25.12.2025, in pursuant to the order of the Learned Transfer Pricing Officer (in short "Ld. TPO") under section 92CA(3) of the Act and the directions of the Learned Dispute Resolution Panel-1, Bangalore (in short "DRP") dated 27.11.2025, and pertains to the A.Y. 2022-23. 2. The brief facts of the case are that the assessee is engaged in the business of manufacturing flip off seals for the pharmaceutical industry. It is also engaged in rendering marketing support services and Information Technology (IT) support services to its Associated Enterprises ("AEs"). The assessee had filed its return of income for A.Y. 2022-23 on 29.11.2022, declaring a total income of Rs. 26,71,52,417/-. During t....

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.... TP adjustment on interest on trade receivables and directed the Ld. TPO to compute interest by applying the LIBOR rate plus 450 basis points, as against the SBI short-term deposit rate considered by the Ld. TPO. Pursuant to the directions of the Ld. DRP, the A.O. passed the final assessment order under section 143(3) r.w.s. 144C(13) of the Act, on 25.12.2025 and determined the total income at Rs. 27,16,63,757/- by making an addition of Rs. 45,11,340/- in respect of interest on trade receivables from AEs. 4. Aggrieved by the final assessment order, the assessee is now in appeal before the Tribunal. 5. The learned counsel for the assessee, Shri Sharath Rao, C.A., referring to various grounds of appeal filed by the assessee, submitted t....

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....ware Development Services (India) Private Limited Vs. DCIT reported in [TS-436-ITAT-2026 (HYD)-TP]. 7. The learned CIT-DR, Shri Waseem UR Rehman, on the other hand, supporting the order of the Ld. DRP, submitted that the Ld. DRP has considered the objections filed by the assessee with regard to interest on trade receivables and held that even though the transactions of the assessee are benchmarked under the TNMM method, still separate benchmarking is required to be carried out in respect of trade receivables. Further, after considering the relevant facts, the Ld. DRP has rightly directed the Ld. TPO to adopt LIBOR plus 450 basis points for the purpose of benchmarking the trade receivables from the AEs. Therefore, he submitted that the or....

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....convinced with the first argument of the assessee that no separate adjustment is required in respect of trade receivables when the assessee's transactions with its AEs have been accepted to be at arm's length under the TNMM method, but going by the details submitted by the assessee in respect of the working capital adjustment on the comparables selected by the Ld. TPO, we find that, even after providing the working capital adjustment, the margin of the 14 comparables selected by the Ld. TPO worked out to 14%, as against the assessee's margin from its transactions with AEs at 15%. Since the Ld. TPO has considered the opportunity cost of interest on the longer credit period provided to the AEs and held that the assessee has lost t....