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2018 (10) TMI 1180 - AT - Income TaxTPA - receivables forming a part of international transaction - international transaction - ALP determination - receivables beyond 180 days - Held that:- As relying on case of Kusum Healthcare Pvt. Ltd. Vs. ACIT [2017 (4) TMI 1254 - DELHI HIGH COURT], there has to be a proper inquiry by the TPO by analysing the statistics over a period of time to discern a pattern which would indicate that vis-à-vis the receivables for the supplies made to an AE, the arrangement reflects an international transaction intended to benefit the AE in some way. The Court finds that the entire focus of the AO was on just one AY and the figure of receivables in relation to that AY can hardly reflect a pattern that would justify a TPO concluding that the figure of receivables beyond 180 days constitutes an international transaction by itself. With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-à-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterised the transaction. This was clearly impermissible in law as explained by this Court in CIT v. EKL Appliances Ltd. (2012 (4) TMI 346 - DELHI HIGH COURT). - Decided in favour of assessee.
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