Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 1459 - AT - Income TaxTP Adjustment - Payment of interest on trade credits - Arms length price of international transaction of payment of interest on trade credits to its AE - ALP determined by ld TPO at Rs Nil - HELD THAT:- We find that the transaction of outstanding payable by the assessee to non- AE is a separate international transaction in terms of provisions of explanation [1] [c] of section 92 B - There are no reasons to hold that above transaction is interlinked with other transactions and therefore should be aggregated - LD TPO holding so found that there is an internal CUP available as for capital-financing assessee is paying interest to AE and not paying any interest to NON AE. Mostly, Internal CUP would provide highly accurate results. In this case, the difference in credit period is a differentiating factor only for the purposes of purchase transaction. For capital financing , the moment the credit period is over, both the outstanding of AE as well as NON AE stands at Par. We note that assessee has submitted before the learned CIT (A) that the facts noted by the learned TPO that in past also the assessee has not paid any interest is incorrect. Submission made before him clearly shows that for Assessment Year 2010-11, the assessee has paid ₹1,92,146/-, for Assessment Year 2011-12 ₹15,02,059/- for Assessment Year 2012-13 ₹29,79,359/- and for Assessment Year 2013-14 ₹27,82,845/-. However, that does not make any difference in benchmarking international transaction of current AY. Benchmarking of Payment of interest on outstanding beyond credit period to AE is also not impacted by the margins earned by the assessee or consideration of working capital adjustment. In view of the above facts, we uphold benchmarking made by Transfer Pricing Officer of the above payment interest at Rs. Nil. Accordingly, the grounds of the appeal assessee are dismissed.
|