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2023 (9) TMI 202 - AT - Income TaxDisallowance of employees contribution to PF - HELD THAT:- Issue covered against the assessee in the case of Checkmate Services P. Ltd. [2022 (10) TMI 617 - SUPREME COURT]. TP Adjustment - notional interest on the excess credit period allowed to outstanding receivables of associate enterprise (AE) - whether any upward adjustment of interest on outstanding receivables of AE’s exceeding their credit period is warranted in terms of section 92C? - HELD THAT:- As what can be derived from the above is that in view of Hon’ble Delhi High Court decision in the case of Kusum Health P. Ltd. [2017 (4) TMI 1254 - DELHI HIGH COURT] the position of law on the issue is that where working capital adjustment takes into account the impact of outstanding receivables no further adjustment is required of interest on outstanding receivables of AE’s beyond the agreed credit period if the margin of the assessee is comparable to that of external comparables. In the present case, the Ld.CIT(A) has dismissed this plea of the assessee relying on the decision of Ameriprise India P. Ld. [2015 (8) TMI 652 - ITAT DELHI] which as we have noted above, has been held to be not good law by the Hon’ble Delhi High Court in its consistent decision in Kusum Health P. Ltd. (supra) and Mckinsey Knowledge Centre P. Ltd. [2018 (8) TMI 592 - DELHI HIGH COURT] In the facts and circumstances of the present case, as we have noted above, since the assessee has demonstrated that its profit margin calculated after working capital adjustment are within ± 5% range as compared to adjusted profits of the comparables, we hold that adjustment made on account of interest on outstanding receivables is unwarranted and unjustified. The same is, therefore, directed to be deleted.
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