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2019 (11) TMI 1550 - AT - Income TaxTP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee is engaged in the business of Software Development services - since the assessee company is primarily engaged in custom-built mobile platform, applications and software support and maintenance related services to M/s. Kony Group of Companies, we are of the view companies functionally dissimilar with that of assessee need to be deselected. Interest on outstanding receivables - As submitted that if interest was to be charged on receivables, then the advance received from the AEs should be first adjusted towards the receivables on FIFO basis and thereafter, interest may be charged on the balance receivables - HELD THAT:- As amendment to section 92B covers interest on outstanding receivables as international transaction and hence, we do not find merits in the argument advanced by the ld. AR that interest on outstanding receivables is not an international transaction as per section 92B of the Act. In respect of the application of FIFO method on realization of outstanding receivables with advance received towards certain other transaction with AE, we agree with the Ld. AR’s argument that primarily the advance received has to be adjusted against any advance received and thereafter, the interest has to be charged on the outstanding receivables. This methodology shall result in the exact outstanding invoices against which payment is not received. Accordingly, we remit the issue back to the file of Ld. TPO to consider the issue afresh in the light of the observations made by us hereinabove.
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