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2022 (12) TMI 1431 - AT - Income TaxTP adjustment - comparable selection - HELD THAT:- Exclude Infosys BPO Company from the list of comparable as company has diversified functions, top global brand and huge turnover of Rs.1831.36 Crores. M/s. Eclerx Services Ltd. is not comparable since it is functionally different. Since there are no segmental details, expenditure incurred on outsourcing, we are of the opinion that the CIT (Appeals) is justified in excluding this company as comparable. Admittedly, the functions of the assessee as well as e-Clerx have not change for the last two years i.e., from 2010-11 and 201213. AO in these two years had not considered e-Clerx as a comparable. No reason to grant any relief to the Revenue. Accordingly, we uphold the order passed by the ld.CIT(A) excluding the e-Clerx from the list of comparable. Remit the issue of comparability in respect of these three companies i.e. M/s. Jindal Intellicom Pvt. Ltd., M/s. Informed Technologies Limited and M/s. Ace BPO Services Pvt. Ltd. to examine and decide as per law. Interest rate charged on the trade receivable - AR had submitted that the Tribunal had allowed the credit period of 120 days as held in OSI Systems Pvt Ltd, Hyderabad [2020 (12) TMI 294 - ITAT HYDERABAD] and trade payables are required to be setoff against the trade receivables and the interest should be restricted to LIBOR plus 100 - CIT(A) has restricted the charging of interest at LIBOR +200 basis points allowing the credit period of 60 days - HELD THAT:- Though, the ld.AR cited the decision in the case of OSI System Pvt. Ltd.[Supra] but, the said decision is not applicable to the facts of the case as the Tribunal in the said case had held applicability of LIBOR +200 basis points to be applied on the trade receivables. Similarly, the Tribunal without assigning any reason has held that 120 days credit period is reasonable period. In our view, no documentary evidence has been brought on record before us so that we can infer that 120 days credit period is a reasonable period. CIT(A) after relying upon the decision of OSI Systems (supra) for the reasons best known to him, had arbitrarily reduced the credit period from 120 days to 60 days. The approach of ld.CIT(A) is without any basis. Hence, we direct the TPO/Assessing Officer to charge interest at LIBOR + 200 points. We direct AO / TPO to allow the credit period and charge interest over and above the outstanding period of 120 days.
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