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2023 (4) TMI 794 - ITAT BANGALORETP Adjustment - Interest on outstanding receivables - assessee submits that the TPO had not provided the working of the adjustment determined in respect of interest on outstanding receivables - As stated since, it is debt free company; no adjustment can be made towards notional interest on receivables - HELD THAT:- TPO during the study had not considered this issue in light that the assessee is a debt free company. So the adjustment of interest cannot be warranted in respect of the assessee. The assessee-company is not in other hard paying any interest to the creditor. Normally the assessee allowed credit to debtors for 60 days on the other hand they are enjoying the credit on same days against creditors. We find the issue was not properly adjudicated by the AO/TPO in the order. The DR had not made any strong objection on this issue. We remand back this issue to the TPO for further adjudication in light of our observations above. Grant of working capital adjustment - Trade terms of payment of debtor is 60 days. So, the price of goods should equate to the price for immediate payment plus 60 days of interest on immediate payment price. For making working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparable for which is the work out the adjustment on account of working capital adjustment. As the issue is first time agitated before the ITAT, we remit back the issue to the AO/TPO for further adjudication and to grant actual working capital adjustment after duly examining it. Accordingly, this ground is remitted back to the file of AO/TPO for reconsideration. Selection of comparables - Exclusion of companies as functionally dissimilar with that of assessee characterised as the “contract service provider”.
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