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2024 (1) TMI 421 - AT - Income TaxTP Adjustment - Interest on delayed payments from its AE’s - proposed to benchmark the outstanding receivable from associate enterprises as separate transaction in the light of s. 92E and directed the AO for appropriate transfer pricing adjustment towards interest on delayed payments from its AE’s consistent with arm’s length principles - HELD THAT:- We find merit in the plea of the assessee that the assessee being a foreign entity, the overdue receivables do not act detrimental to the Indian Transfer Pricing regulations and determination of ALP in the instant case. The delay in payment of such receivables if any, do not appear to operate to the prejudice of the revenue. Secondly, the issue is also covered in favour of the assessee by the observations in Kusum Healthcare (2017 (4) TMI 1254 - DELHI HIGH COURT) that once the working capital adjustment is given on account dues receivables, it ordinarily subsumes the interest on receivables and no separate benchmarking for it is needed. We thus direct the Assessing Officer to reverse and cancel the adjustment in question. Appeal of assessee allowed.
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