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TMI Blog2016 (7) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... ue read as under :- "Whether on the facts and in the circumstances of the case and in law, the Hon'ble DRP was correct in deleting the addition of Rs. 33,90,931 on account of notional interest due to delayed recovery of trade debts from AE by accepting the assessee's contention without verifying factual accuracy of the same. Whether on the facts and in the circumstances of the case and in law, the Hon'ble DRP was correct in deleting the addition of Rs. 33,90,931 on account of notional interest due to delayed recovery of trade debts from AE without appreciating the fact that the assessee by its own admission dated 22.12.2013 (Annexure-1 is made part of this authorization), has mentioned that in the case of non-AE if two cases of huge del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile the apparent relationship might be that of a trade creditor and debtor, in practice, the assessee is allowing its AE to access to interest-free funds without corresponding compensation to itself. A trade transaction cannot be permitted to be utilized as a funding opportunity especially when no compensation is being received for the same. In the facts of the case therefore we find that the TPO is correct in identifying the interest receivable by the assessee and making an adjustment on this count. However, the similar credit period, in case of non-AE exceeds the credit period of the AE and similar interest is not charged from the non-AE. Therefore, considering the facts as demonstrated, it is hereby held that no interest is chargeable f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e act of not charging interest on delayed debt from AE as well as Non-AEs meets with the principle of arm's length by applying the CUP Method. In support of her contention, she relied upon the decision of the Hon'ble Jurisdictional High Court in the case of Indo American Jewellery Ltd. vs. CIT 44 taxmann.com 310 (Bombay). 6. We have heard the rival contentions, perused the findings of the authorities below as well as material available on record. The ld. Counsel for the assessee has placed reliance on the judgment of the Hon'ble Bombay High Court in the case of CIT-9 vs. Indo American Jewellery Ltd.. The said head note is extracted below: "Section 92C of the Income-tax Act, 1961- Transfer Pricing-Computation of arm's length price [Compar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 days whereas in the case of Non-AE, the maximum delay is of 203 days. In view of the above, the order of the Tribunal in the case of the assessee for the A.Y. 2008-09 is not applicable to the issue at hand for the A.Y. 2009-10. 6.3 Let us now examine the facts in the present case. In a case like this the proper method is to take a simple average. If we take a simple average then there has been a delay of 132 days in the case of AE and 130 days in the case of Non-AEs in realization of the export proceeds. Thus there is uniformity in the act of the assessee in not charging interest from both AE and Non-AE debtors for delayed realization of export proceeds. 7. Respectfully following the judgment of Hon'ble Bombay High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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