TMI Blog2021 (2) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of ITAT wherein the Tribunal had held that when the assessee is debt free company the question of receivable does not arise. Revenue had relied on the decision of Hon ble Delhi High Court in the case of Cotton Natural [ 2015 (3) TMI 1031 - DELHI HIGH COURT] . We find that the facts in the case of Cotton Natural are different and the question before the Hon ble High Court was different and in such a situation, we are of the view that the ratio of the aforesaid decision in the case of Cotton Natural (supra) will not be applicable to the case of the assessee in the present case. - Decided in favour of assessee. - ITA No.6602/Del/2017 - - - Dated:- 17-2-2021 - Sh. Anil Chaturvedi, Accountant Member And Sh. K. Narasimha Chary, Judicial Member For the Assessee : Ms. Ananya Kapoor, Adv. For the Revenue : Sh. Sunil Kumar, CIT-DR ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the assessee is directed against the order dated 11.07.2017 of the Additional Commissioner of Income Tax, Special Range-9, New Delhi ( AO ) passed u/s 143(3) r.w.s 144C(13) for Assessment Year 2013-14. 2. The relevant facts as culled from the material on records are as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Dispute Resolution Panel ( Hon ble DRP ) under Section 143(3) read with section 144C of the Act in the appeal filed by the Appellant against the draft assessment order dated 29 December 2016 issued by the Learned AO, in accordance with the order of the Deputy Commissioner of Income Tax, Transfer Pricing Officer - (3)(3)(2), New Delhi- ( Learned TPO ). That the order of the Learned AO pursuant to the DRP directions, to the extent upholding the additions/ disallowances made in the draft assessment order issued by the Learned AO, is erroneous and bad in law. 1. The learned TPO/AO/Hon ble DRP have erred, in law and on facts and circumstances of the case, in making an adjustment of INR 51,15,652 to the total income of the Appellant in respect of interest on the outstanding receivables. The assessment order and the addition made is illegal, bad in law and without jurisdiction. 2. The learned TPO/AO/Hon ble DRP have erred, in law and in facts, by not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Act read with Income Tax Rules, 1962 ( the Rules ), and accordingly, determining of the ALP of the impugned internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of 90 days as prescribed under Section 92CE of the Ac. read with Rule 10CB of the Rules. The above grounds of appeal are mutually exclusive and without prejudice to each other. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. The Appellant prays for appropriate relief based on the said grounds of appeal and the facts and circumstances of the case. 6. Before us, at the outset, Learned AR submitted that though the assessee has raised various grounds but the solitary grievance of the assessee is with respect to the addition of ₹ 51,15,652/-. 7. The TPO has noted that on examination of the Balance Sheet it was revealed that assessee had receivables which according to him implied that the payment for the invoices raised by the assessee had not been received within the stipulated time as provided in the service agreement with the AE. The TPO show-caused the assessee and asked to furnish the details and also show-caused as to why the delayed payment not be treated as unsecured loan advanced to AE s and the interest be computed on such unse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this reason also, no addition can be made on account of interest on receivables and for this proposition she relied on the decision of Hon ble Delhi High Court in the case of PCIT vs. Bechtel India Pvt. Ltd. in ITA No.379/2016 dated 21.07.2016. She further submitted that the SLP filed by the Revenue against the order of Hon ble Delhi High Court in the case of Bechtel India Pvt. Ltd. (supra) was dismissed by Hon ble Apex Court in SLP (C) CC No.4965/2017. She pointed to the relevant copy of the order placed in the paper book. She thereafter submitted that the Hon ble DRP had relied on the decision of Delhi High Court in the case of Cotton Natural. She submitted that the decision of Hon ble Delhi High Court in the case of Cotton Naturals (supra) is not applicable to the case of the assessee for the reason that the issue involved in that case was pertaining to interest of loan and not interest on receivables. She further pointed that in the case of Cotton Natural (supra), the issue was whether SBI rate is applicable or LIBOR rate. She therefore, submitted that since the issue involved in the case of Cotton Naturals (supra) is different from that in the case of assessee, the ratio of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 92B of the Act included payments or deferred payment or receivable or any other debt arising during the course of business , and therefore, the outstanding receivables could by themselves constitute an international transaction. He further referred to the OCED Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Paras 3.48 3.49 under Chapter III para A.6.1 of the said Guidelines titled Different types of comparability adjustments spoke of the need to eliminate differences that may arise from different accounting practices between controlled and uncontrolled transactions. In particular, it was noted under para 3.49 that a significantly different level of relative working capital between the controlled and uncontrolled parties may result in further investigation of the comparability characteristics of the potential comparable. Mr. Singh submitted that the ITAT erred in disagreeing with the TPO, who had characterised the outstanding receivables as an international transaction by itself which required benchmarking. 10. The Court is unable to agree with the above submissions. The inclusion in the Explanation to Section 92B of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
