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2019 (4) TMI 672 - AT - Income TaxClaim of deduction u/s 10AA - computation of deduction - HELD THAT:- As relying on assessee's own case [2017 (12) TMI 862 - ITAT HYDERABAD] we direct AO that since the telecommunication charges are excluded from export turnover, the said charges should also be excluded from the total turnover for the purpose of computing deduction u/s 10AA of the Act. Accordingly, this ground is allowed. Adjustment on account of outstanding trade receivables - delay in payment either from AE or non-AE- scope of amendment to section 92B - Held that:- As the definition of Section 92B is amended to bring in the nature of financing by way of allowing the AEs to retain the trade receivables beyond reasonable period. In our view, the outstanding trade receivables beyond reasonable period will come under international transactions as per Amended Section 92B. Accordingly, the assessee as well as TPO have to determine what is the reasonable period of outstanding which they can allow to the AEs. It may be as per the bilateral agreement or trade practice in the industry or historical average collection period of the assessee or reference can be drawn from statutory limits fixed by the legislature in the similar enactment. Therefore, we direct the TPO to determine the industry average or average of collection period adopted by the comparable companies selected for the TP study and calculate average collection period of the assessee during this assessment year. TPO has selected only 9 transactions which have crossed one month to determine the adjustment of TP whereas assessee has transacted total 31 transactions during this year. TPO has to calculate the average collection period for this year. Whether the average collection period is within industrial average or not has to be determined. Since we do not know the industry average, we remit this issue back to the file of TPO to determine the industrial average as directed above i.e. calculate the average collection period of the comparable companies selected for the TP study and average collection period of the assessee for the whole year. The collection during the year which are within the industry average should be allowed and only the collection period beyond industrial average alone should be charged with the interest based on the rate of LIBOR since it is international transaction. -Decided in favour of assessee for statistical purposes.
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