TMI Blog2017 (9) TMI 1578X X X X Extracts X X X X X X X X Extracts X X X X ..... e raised by the assessee in the grounds of appeal is accordingly allowed. Dividend distribution tax - taking the surcharge @ 10% instead of 7.5% on final dividend declared in June 2010 - Held that:- The issue is restored to the file of the Assessing Officer with the direction to apply correct surcharge as per law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The additional ground raised by the assessee is allowed for statistical purposes. - ITA No.7068/Del/2014 - - - Dated:- 25-9-2017 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The Appellant : Shri Pradeep Dinodia, Adv. For The Respondent : Shri H. K. Choudhary, CIT-DR ORDER PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons have been accepted by the TPO as arm s length price and no adjustment was made by the TPO in any of the reported international transactions. 4. The TPO, however, observed that the assessee has outstanding debts of ₹ 2,42,46,942/- as on 31st March, 2010 which he considered for charging interest in the subsequent year. In addition to the above amount, he noted that there are amounts receivable as on 31.03.2009 of ₹ 2,02,73,906/- as outstanding from its AEs. The TPO computed the interest at the rate of 14.88% on the receivables and proposed adjustment of ₹ 10,69,759/- being the interest that should have been charged by the assessee on the amounts outstanding. 5. The Assessing Officer passed the draft assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Teradata India Pvt. Ltd. vs. ACIT vide ITA No.87/Del/2017 order dated 08.08.2017 for assessment year 2012-13, he submitted that the Tribunal in the said decision has held that interest on the outstanding receivables cannot be taken into account for adjustment of ALP. Referring to the decision of the Hon ble Delhi High Court in the case of CIT vs. M/s Indo American Jewellery Ltd. vide Income Tax Appeal (L) No.1053 of 2012 order dated 08.01.2013, he submitted that the Hon'ble High Court in the said decision has dismissed the appeal filed by the Revenue against the decision of the Tribunal in deleting the notional interest on outstanding amount of export proceeds realized belatedly. He accordingly submitted that this issue b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AE. It is the submission of the ld. counsel for the assessee that in view of the decision of the Hon ble Delhi High Court in the case of Bechtel India Pvt. Ltd. (supra) and in the case of Kusum Healthcare Pvt. Ltd. (supra), no adjustment is required on account of notional interest on receivables. We find merit in the above argument of the ld. counsel for the assessee. We find the Hon ble Delhi High Court in the case of Bechtel India Pvt. Ltd. (supra) has held that where the assessee is a debt free company the question of receiving any interest on receivables did not arise. Consequently, no adjustment for interest on receivables is required. The decision of the Hon ble High Court was challenged by the Revenue and the SLP was dismissed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction by itself. With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis- -vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and recharacterised the transaction. This was clearly impermissible in law as explained by this Court in CIT v. EKL Appliances Ltd. (2012) 345 ITR 241 (Delhi). 12. Consequently, the Court is unable to find any error in the impugned order of the ITAT giving rise to any substantial question of law for determination. The appeal is, accordingly, dismissed. 11. Similar view has been taken by the Co-ordinate Bench of the Tribunal in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of National Thermal Power Co. Ltd. (supra), the additional ground raised by the assessee is admitted for adjudication. 14. Ld. counsel for the assessee at the outset submitted that the Assessing Officer has wrongly charged surcharge at the rate of 10% instead of 7.5% on final dividend declared in June, 2010. He submitted that the matter may be restored to the file of the Assessing Officer with a direction to compute correct surcharge. Ld. DR on the other hand has no objection for the same. Accordingly, the issue is restored to the file of the Assessing Officer with the direction to apply correct surcharge as per law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The additional gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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