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2022 (12) TMI 920 - ITAT DELHITP Adjustment - adjustment on account of interest on receivables - HELD THAT:- The assessee entered into various international transactions with its AEs resulting in outstanding receivables as per the payment terms stipulated in the inter company policy entered into with the AEs. The assessee being a captive unit has received advances from some of its AEs for services to be provided in future. As relying on case of Mckinsey [2021 (10) TMI 751 - DELHI HIGH COURT] we are of the view that the Ld. AO/TPO is not justified in charging interest on receivables without factoring in the payables to the AEs. Working capital adjustment in the international transaction of rendering services - Hon’ble Delhi ITAT in Kusum Health Care Pvt. Ltd. [2015 (4) TMI 180 - ITAT DELHI] held that in case the differential impact of working capital of the assessee vis a vis its comparables has already been factored in the pricing/ profitability of the assessee, further adjustment to the margin of the assessee on the pretext of outstanding receivable is unwarranted and wholly unjustified. In case of Ameriprise India P. Ltd. [2015 (8) TMI 652 - ITAT DELHI] considered the decision of Coordinate Bench in the case of Kusum Health Care and held that allowing working capital adjustment in the international transaction of rendering services have no impact on the determination of ALP of the international transaction of interest on receivables from AEs. Having regard to the legal position set out above, we hold that the Ld. AO was not justified in making adjustment on account of interest on receivables in the facts and circumstances of the assessee’s case. Accordingly, the assessee succeeds.
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