TMI Blog2022 (12) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... of Global Logic India Ltd.[ 2021 (11) TMI 1090 - ITAT DELHI] , [ 2020 (6) TMI 712 - ITAT DELHI] , [ 2020 (9) TMI 572 - ITAT DELHI] and [ 2017 (12) TMI 1052 - ITAT DELHI] Hence, keeping in view, the established position, we hereby deleted the addition made by the Assessing Officer. Appeals of the assessee are allowed - ITA No. 1098/Del/2021 ITA No. 1099/Del/2021 : AND SA No. 252/Del/2021 - - - Dated:- 10-5-2022 - Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member Assessee by : Sh. Ravi Sharma, Adv. Revenue by : Sh. Mahesh Shah, CIT DR ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals and Stay Application have been fi led by the assessee against the orders passed by the National e- Assessment Centre, Delhi dated 30.03.2021 u/s 143(3) r.w.s. 254 of the Income Tax Act, 1961. 2. In ITA No. 1098/Del/2021, following grounds have been raised by the assessee: 1. On the facts and circumstances of the case and in law, the Ld. Assessing Officer ( AO ) erred in not passing the final assessment order u/s 143(3) of the Act dated 30th November 2016 in the original proceedings, in conformity with the bindi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pricing Officer ( TPO ) and treating the receivables outstanding beyond 60 days from associated enterprises as deemed loan and charging notional interest on i t. 3. On the facts and in circumstances of the case and in law, the Ld. AO/ DRP/ TPO erred in inadvertently considering 30 days instead of 60 days while computing the notional interest on outstanding receivables. 4. The Ld. AO/ NFAC has grossly erred in computing interest under section 234B of the Act; 5. The Ld. AO/ NFAC has grossly erred in initiating penalty under section 271(1)(c) of the Act mechanical ly and without recording any satisfaction for its initiation. 4. Orange Business Services India Solutions Private Limited (formerly known as Equant Solutions India Private Limited) ('OBSISPL'/ the Assessee'), a Company incorporated under the laws of India, is a subsidiary of EGN BV, Netherlands. 5. OBSISPL is primarily engaged in providing Information Technology ('IT') enabled network management / technical support and other back-office support services ('ITES') to its Group Company in Ireland, Equant Network Services International Limited ('ENSIL'). It also prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PO returned a finding that the outstanding receivables in the case of the assessee constitute an international transaction which is liable to be benchmarked separately. The Panel, therefore, rejected the contention of the assessee that the TPO did not follow the directions of the Tribunal. 9. Another argument was advanced on behalf of the assessee was that the outstanding receivables arising from intercompany services transactions (included in the definition of ' international transaction' vide Finance Act 2012) was duly benchmarked by the assessee by undertaking working capital adjustment during assessment proceedings and the same is subsumed in the working capital adjustment. The ld. DRP held that this argument was specifically negatived by the ITAT in Bechtel India cited supra, following its decisions in Ameriprise India (P) Ltd. and Mckinsey Knowledge Centre (P) Ltd. cited supra in the following words: 20. The Tribunal also explained that i f an invoice is raised during the year and the proceeds are realized within the year, but, beyond the stipulated period of agreement, their, the same will not come within the working capital adjustment because working capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the meanwhile, the Hon ble Delhi High Court, vide order dated 25.04.2017 in the case of Kusum Healthcare, dismissed the appeal of the revenue against the decision of Hon ble Tribunal and that (i) The inclusion in the Explanation to Section 92B of the Act of the expression receivables does not mean that de hors the context every item of receivables appearing in the accounts of an entity, which may have dealings with foreign AEs would automatically be characterized as an international transaction and (ii) With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-a-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterized the transaction. 16. In the appeal fi led by the assessee in the case of Mckinsey Knowledge, the Hon ble High Court vide order dated 07.02.2018, while admitting the appeal on the other issue, remitted the issue of interest charged on outstanding receivables to ITAT, following their decision in the case of Kusum Healthcare. 17. However, vide order dated 09.08.2018, the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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