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2021 (6) TMI 164 - AT - Income TaxTP Adjustment - ALP adjustment qua receipt of management services - HELD THAT:- Case law CIT vs. Cushman and Wakefiled (India) Pvt.Ltd. [2014 (5) TMI 897 - DELHI HIGH COURT] and CIT vs. EKL Appliances Ltd [2012 (4) TMI 346 - DELHI HIGH COURT] holds that it is not within the domain of the “TPO” to determine the actual benefits derived from the International transactions in issue which needs to be seen from assessee’s view point going by common business prudence only. We make it clear that the assessee has already filed its detailed paper book in the nature of supportive evidence indicating receipt of management services in day to day functioning from its overseas Associated Enterprises. There is no rebuttal coming from Revenue’s side that all the said details lack genuineness which could be taken as the benchmark for arriving at nil ‘ALP’ thereof. We thus hold that the learned lower authorities action making impugned ALP adjustment is not sustainable. The same is directed to be deleted. The assessee succeeds in its first substantive grievance therefore. Interest on receivables addition qua the overdue credit period regarding international transactions between the assessee and its overseas Associated Enterprise - CIT DR fails to rebut the clinching fact that the TPO as well as the CIT(A) have adopted prime lending rate of 14.5% as issued by the SBI which has no relevance to international transactions forming subject matter of ALP determination mechanism before us. All the learned lower authorities have failed to adopt even the most appropriate method ‘MAM’ before adopting SBI lending than LIBOR rate as the interest on receivables benchmark. There is hardly any dispute that chapter X of the Act is a special provision wherein each and every adjustment qua an assessee’s international transaction could be made only after adopting the ‘MAM’ followed by selection of comparables in the very segment only. We thus direct the TPO to delete the impugned latter adjustment on interest on receivables as well. The assessee succeeds in both of its substantive grievances.
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