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2022 (5) TMI 1517 - AT - Income TaxTP Adjustment - notional interest adjustment with respect to outstanding receivables of the assessee computed at 6 months LIBOR + 450 basis points i.e., effective rate of 5.875% by the revenue authorities - assessee is a subsidiary of Maxim Integrated Products Sales Ltd. Dublin, Ireland as primarily engaged in marketing of integrated circuits for semi-conductors and software in the domain to cater to the needs of its AE under which the company will provide marketing services on commission basis - HELD THAT:- In our opinion, the impugned issue is covered by the decision of the coordinate Bench of the Tribunal in the case of Swiss Re Global Business Solutions India Pvt. Ltd. [2022 (1) TMI 1275 - ITAT BANGALORE] and the judgment of the Hon’ble High Court of Karnataka in the case of AMD (India) Pvt. Ltd [2018 (8) TMI 2094 - KARNATAKA HIGH COURT] we hold that the treatment of interest on deferred receivables is rightly considered as an independent international transaction and benchmarked separately by the revenue authorities. However, we direct that the interest rate to be adopted is LIBOR rate + 2%, taking a consistent view as held in the aforesaid order of the Tribunal, following the judgment of the Bombay High Court in the case of CIT v. Aurionpro Solutions Ltd [2017 (6) TMI 1087 - BOMBAY HIGH COURT] Ordered accordingly. Correct calculation of number of days of delay - TPO himself in his order has mentioned that the number of days of delay in realizing the receivables shall be limited to the year under consideration i.e., upto 31.3.2017. It is noticed that from the chart showing the details of the column under the head ‘Delay in number of days upto FY16-17’ furnished by the assessee, the TPO has taken into consideration the delay upto the actual date of realization, and not upto 31.3.2017. We therefore direct the TPO to consider the period of delay upto 31.3.2017 while recomputing the interest in accordance with the directions given in this order. It is ordered accordingly.
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