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2020 (2) TMI 1611 - AT - Income TaxTP Adjustment - interest on receivables - treating the receivables outstanding beyond 60 days from associated enterprises (AEs) as deemed loan and charging notional interest on the basis of LIBOR plus 300 basis points - HELD THAT:- DRP, first of all, has given direction to the TPO to give working capital adjustment by taking average opening and closing balance of the inventories and receivable/ payables credit, debtors and creditors for the relevant year and the issue of adjustment on account of outstanding receivables. DRP on the basis of direction in A.Y. 2014- 15, held that the TPO has rightly allowed 60 days credit period and but has wrongly applied SBI PLR rate plus 300 basis point. The TPO should apply LIBOR plus basis points for making the adjustment on account of interest. Since in assessee’s own case, the Tribunal has held that once working capital adjustment has been made, then no separate adjustment is called for on interest of receivables. The Tribunal has followed the judgment of Hon’ble Delhi High Court in the case of PCIT vs. Kusum Healthcare Pvt. Ltd [2017 (4) TMI 1254 - DELHI HIGH COURT] As already direction for working capital adjustment has been given by DRP, therefore, we hold that no Transfer Pricing Adjustment on account of interest on payment of receivables can be made separately. Thus, the Transfer Pricing Adjustment on account of interest on receivable is deleted. - Decided in favour of assessee.
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