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2020 (6) TMI 774 - AT - Income TaxTP Adjustment - adjustment on account of purchase of medical equipments - Onus on the part of the tax payer to establish the cost of goods in the hands of the AE which exported it to the tax payer - HELD THAT:- Since the assessee in the instant case has not filed the purchase bills of these assets in the hands of its AE and as to whether the AE has sold these assets to the assessee at the same price at which they were purchased by the AE or with any mark up value, therefore, we are of the considered opinion that the contention of the assessee that the purchase of medical equipments are at ALP cannot be accepted - considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO / TPO with a direction to give one more opportunity to the assessee to substantiate its case by filing some basic evidence regarding purchase cost in the hands of the AE or copy of the valuer’s report etc regarding purchase of the assets from the AE’s. Needless to say the AO/ TPO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The first issue raised by the assessee in the grounds of appeal is accordingly allowed for statistical purpose. Interest on outstanding receivables - HELD THAT:- Working capital adjustment has been provided by the DRP for the services segment which already takes into account the impact of the outstanding receivables. Further in the impugned assessment year the outstandings payable are more than the outstandings receivable and average payment period to its AE is 176 days whereas the average collection period from its AE is only 19.55 days which is evident from page 331 of the paper book. Therefore, in our opinion, no adverse inference is warranted on account of receivables from the AE. No interest has been charged from third parties by the assessee on account of delay in payment. Under these circumstances and in the light of the decision of Hon’ble Delhi High Court in the case of Kusum Health Care (P) Ltd.[2017 (4) TMI 1254 - DELHI HIGH COURT] we are of the considered opinion that no adjustment on account of interest on receivables is called for. The AO is directed to delete the addition. We hold and direct accordingly. The second issue raised by the assessee in the grounds of appeal is accordingly allowed.
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