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2016 (6) TMI 1275 - AT - Income TaxTPA - determination of ALP - allowing a credit period on receivable from AE - independent international transaction - Held that:- Kusum Healthcare Pvt. Ltd. Vs. ACIT [2015 (4) TMI 180 - ITAT DELHI] has taken this view that allowing the credit period over and above normal credit period prevailing in the industry is certainly relevant and part of the main international transaction of sale or purchase between the assessee and the AE. However, it was held that it cannot be treated as an independent international transaction de horse the main international transaction between the parties We set aside this issue to the record of the A.O./TPO with the direction to redo the exercise of determination of ALP by considering the proper working capital adjustment in the comparable prices in respect of transaction of software development services provider to the AE - If after giving the necessary adjustment the international transaction of the assessee is found at arm's length then there is no question of any separate adjustment on account of allowing the credit period on the receivable from AE - the normal credit period allowed for the receivable from the AE shall be the credit period prevailing in the industry and therefore we are of the view that two months credit period should be taken as a normal business practice in the industry. Also consider the benchmark interest rate as LIBOR/PLR in the light of various precedents on this issue.
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