TMI Blog2023 (9) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... e functions performed, assets employed, and the risks assumed by the assessee from the same as in the assessment year 2009-10 [ 2017 (12) TMI 1867 - ITAT HYDERABAD] - Since the facts of this year are identical to the facts involved in the year 2009-10, while respectfully following the view taken by the Co-ordinate Bench for the assessment year 2009-10, where it this issue to the file of the AO/learned TPO with a direction to consider only the operating profit/operating cost of the transactions and also to consider internal TNMM where the services rendered by the assessee are similar to both AEs and non-AEs. Grounds relating to the issue are answered accordingly. TP adjustment in respect of the interest on trade receivables - In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of IT enabled Services (ITeS) and other one is related to the Transfer Pricing adjustment in respect of the interest on trade receivables. Briefly stated relevant facts are that the assessee is into the business of providing computer-aided design and computer aided engineering solutions to automotive parts using commercially available software tools like Catia V5, Unigraphics, Hypermesh, Nastran etc. During the relevant assessment year the assessee provided engineering services such as product design, to design and computer aided engineering simulation services to automotive industry across the Globe. Assessee reported international transaction in respect of ITeS stating that the assessee has been providing such services to both As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gix Micro Systems Ltd., in ITA No. 423/Bang/2019 by order dated 07/10/2010. 5. Assessee is therefore, before us in this appeal, contending that when the assessee is rendering ITeS services to both AE segment and non-AEs segment, the comparison of those segments affords very reliable results than adopting the PLI taken from the external comparables. Learned AR submitted that for the assessment year 2009-10, a similar issue had arisen in assessee s own case before the Tribunal in ITA No.1464 /Hyd/ 2014 and by order dated 29/12/2017, a Co-ordinate Bench of the Tribunal directed the learned AO/learned TPO to consider only the operating profit/operating cost of a transactions and also to consider internal TNMM where the services rendered by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 2009-10, a Co-ordinate Bench of this Tribunal held that:- 10. Having regard to the rival contentions and the material on record, we find that where the assessee has both the AE as well as non-AE transactions, the operating profit and operating cost relating to the AE transactions alone ought to be considered for arriving at the ALP and thereafter the fixed cost attributable to both the transactions ought to be apportioned. When the TPO has adopted the TNMM as the most appropriate method and the assessee has rendered similar services to both the AEs and non- AEs, and the non-AE transaction satisfy the internal TNMM. The AO, therefore, ought to have considered them for arriving at the ALP. Therefore, we deem it fit and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed. In view of the fact that this issue is no longer res integra and in assessee s own case, a view is taken that the interest on trade receivables is an international transaction, and has to be benchmarked separately and after considering the relevant factors pleaded by the assessee for such assessment year, took the view that 6% per annum is the appropriate rate of interest, we do not find any reason to deviate from this view or to distribute such view. Since no change of circumstances is brought to our notice, we follow the said view and direct the learned AO/learned TPO to consider interest rate on outstanding receivable at the year end @6% and recompute the transfer pricing adjustment. Grounds relating to this issue are answered accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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