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2023 (1) TMI 89 - ITAT MUMBAITP adjustment - Arms’ length price of international transaction of overdue export proceeds - HELD THAT:- In the present case on the bills/ invoices itself assessee has mentioned the credit period on export receivable of AE and Non AE. In case of independent third parties on similar transaction with similar credit period of similar goods no interest is charged. This fact is proved by the assessee for this year by producing the bills of AE as well as Non AEs - we find that non-charging of interest on advances being overdue export proceeds from Associated Enterprises as a comparable internal CUP as for similar time on similar conditions, for almost similar period no interest is charged from Non Associated Enterprises. In view of this, we find that Arms Length Price of overdue Export proceeds and receivable from Associated Enterprises is ₹ Nil. Assessee has failed to show any evidence that there exists a trade practice of not charging interest on overdue advances of export proceeds. Even common sense defies such an argument. Assessee has also failed to show any evidence that due to recession the interest was not charged. Evidence were not laid down that , there was recession in the business of the assessee in this year or when there was boom , assessee was charging interest on such advances. We reverse the orders of the lower authorities; direct the learned Transfer Pricing Officer/ Assessing Officer to delete the above adjustment. Accordingly, ground no.1 of the appeal is allowed. Assessee has given advances - HELD THAT:- As assessee has the share capital of ₹ 9.80 crores and reserves and surplus of ₹117 crores which is much more than the amount advanced for fixed assets. It is the claim of the assessee that it has not incurred any interest expenditure which is covered by the Provision of Section 36(1) (iii) of the Act. We find that assessee has interest free funds available which were more than the amount of advance for capital asset. Therefore, the issue is squarely covered by the decision of Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT]. In view of this, we direct the learned Assessing Officer to delete the disallowance and accordingly, we reverse the orders of the lower authorities. Ground no. 1.1 of the appeal is allowed.
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