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2021 (3) TMI 828 - AT - Income TaxTP Adjustment - notional interest on outstanding receivables - HELD THAT:- AR fairly conceded that outstanding amount on account of sales/services billed to AE akin to loan advanced by assessee is an international transaction. As held in the case of Avenue Asia Business Advisors (P.) Ltd. v. DCIT [2017 (9) TMI 1295 - DELHI HIGH COURT], there should be TP adjustment on this count after making proper TP study by the TPO after considering the period of credit enjoyed by the comparables and also applicable LIBOR rate in the place of AEs for benchmarking the rate of interest to arrive at the ALP. With these observations, we remit the issue in dispute to the file of AO/TPO to benchmark the interest rate in the light of the decisions cited by ld. DR. Further, we make it clear that the TPO should compute the interest only for the relevant assessment year after going through the relevant agreements entered by the assessee with AEs while computing the ALP. Assessee’s appeal is partly allowed for statistical purposes.
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