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2020 (7) TMI 620 - AT - Income TaxTP Adjustment - adjustment of arm’s-length price with respect to the outstanding debtors - HELD THAT:- It is apparent that associated enterprise is only paying assessee the amount which is enough for defraying expenditure to keep it afloat and keeping all other sums in the form of outstanding trade receivable. In view of above peculiar facts, where total shareholders funds are available with its associated enterprise as an interest free trade receivable clearly shows that outstanding receivable from the associated enterprise is not at all the transaction of sale of goods/services to the assessee. In view of this, agreeing with the view of the coordinate bench in assessee’s own case in earlier year, order of the learned transfer pricing officer cannot be found fault with in considering the overdue outstanding receivable from its associated enterprise as a separate international transaction. AR argument that if a working capital adjustment has been given to the assessee then there cannot be any addition/adjustment with respect to the outstanding receivable from its associated enterprise is devoid of any merit for the peculiar facts in this case wherein total shareholders funds are enjoyed by the associated enterprise as outstanding receivable. No document whereby the assessee has made any request before the learned transfer pricing officer or before the learned dispute resolution panel with respect to granting of working capital adjustment. Even in the transfer pricing study report submitted by the assessee which is placed the learned authorised representative could not show us that assessee himself has claimed any working capital adjustment while preparing its comparability analysis. In transfer pricing study report the assessee has stated what kind of assets it has employed and it has not stated that any working capital has been employed by the assessee. Even otherwise the assessee could not show us what is the difference in working capital of the assessee compared with comparable companies. Thus the adjustment of working capital was not at all there in case of assessee for this year. In view of this, we reject this argument. - Decided against assessee.
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