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TMI Blog2020 (7) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and in law, the Learned Assessing Officer (AO) and the Hon'ble Members of Dispute Resolution Panel (DRP) respectively, erred in passing the impugned assessment order U/s. 143(3) r.w.s. 92CA and 144C(5) of the Income Tax Act, 1961 (the Act), which is illegal and bad in law. 2. On the facts and circumstances of the case and in law, the Ld. AO and DRP respectively, ought to have held thatIT 2.1 adjustment of Rs. 39,75,839/- U/s. 92CA of the Act being notional interest on account of delay in realization of debts from Associated Enterprises (AEs), should be imputed in computing the operating margin of the appellant and not as an independent international transaction. Consequent to which, since the margin (9.03%) ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of manufacturing of Gold and Silver and also export of studded jewellery, filed its return of income for AY 2012-13 on 23.11.0212. The assessee while filing return of income reported international transaction with its associated enterprises (AE) and furnished report under Form 3CED. The assessee reported the following international transactions with its AEs; Sr No. Nature of transaction Amount ( Rs.) 1 Sale of studded jewelry to Jewel America Inc USA 37,70,79,824/- 2 Sale of studded jewelry to Barjon Jewellery Inc USA 11,45,801/- 3 Purchase of jewelry for remaking from Jewel America Inc USA 2,68,494/- 37,84,94,119/- 4. Consequent upon reporting of international transaction, the assessing officer (AO) ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lower authorities. At the outset of hearing the ld. AR for the assessee submits that the grounds of appeal raised by the assessee are covered in favour of the decision of Tribunal in assessee's own case for AY 2009-10 in ITA No. 802/Mum/2016 dated 29.07.2016 and again for AY 2010-11 in ITA No. 7635/Mum/2014 dated 03.01.2018. The ld. AR for the assessee further submits that there was average delay of 138 days for recovery money of sales from AEs during the years. Similarly there was delay in recovery of similar receivable from non AEs of 146 days. The assessee has adopted uniformity in not charging interest for AEs or non AEs for delay in realization of money of sales. As the assessee has not charges any interest from non AEs, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utstanding for more than year and, thus, taking rate of interest at 10 per cent, Transfer Pricing Officer determined interest receivable at Rs. 87.66 lakhs and added same to international transaction cost - Tribunal noted that there was complete uniformity in act of assessee in not charging interest from both Associated Enterprises and non- Associated Enterprises debtors for delay in realization of export proceeds - Tribunal thus deleted addition of notional interest on outstanding amount of export proceeds realized belatedly whether on facts, no substantial question of law arose from Tribunal's order - Held, yes [Para5] [ In favour of assessee] 6.1 The above decision squarely applies to the present case. This is the only decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled objection before DRP, wherein the assessee was allowed partial relief. However on further appeal to the Tribunal, the entire adjustment/ addition on account notional interests for delay in realization of sales was deleted vide order dated 03.01.2018 in ITA No. 7635/Mum/2014. In appeal for AY 2010-11, the Tribunal followed the order for AY 2009-10. 9. From the details furnished by ld. AR for the assessee about the delay in realizing the money of sales from AEs and non AEs, we have observed that on the working of delay of credit period for AE and non AEs as138 days and for non AEs are 146 days; the ld. has not disputed the factual matrix. Considering the decision of Tribunal in assessee's own case for AY 2009-10 and 2010-11, we find m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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