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TMI Blog2022 (12) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... been raised by the assessee: "1. On the facts and circumstances of the case and in law, the Ld. Assessing Officer ('AO') erred in not passing the final assessment order u/s 143(3) of the Act dated 30th November 2016 in the original proceedings, in conformity with the binding directions of the Ld. Dispute Resolution Panel ('DRP') dated 16th November 2016 issued u/s 1440(5) of the Act and hence, the same has been passed in violation of the mandatory provisions of section 1440(10) read with 1440(13) of the Act. Accordingly, the assessment order is bad in law and void, and therefore, the entire assessment proceedings is liable to be quashed. 2. On the facts and circumstances of the case and in law, the Ld. DRP has erred in confirming the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee: "1. On the facts and circumstances of the case and in law, the Ld. Dispute Resolution Panel ('DRP') has erred in confirming the draft assessment order passed by the Ld. AO and enhancing the income of the Appel lant by INR 8,05,59,981. 2. On the facts and in circumstances of the case and in law, the Ld. DRP erred in confirming the order passed by the Ld. Transfer Pricing Officer ('TPO') and treating the receivables outstanding beyond 60 days from associated enterprises as deemed loan and charging notional interest on i t. 3. On the facts and in circumstances of the case and in law, the Ld. AO/ DRP/ TPO erred in inadvertently considering 30 days instead of 60 days while computing the notional interest on outstanding rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ld. DRP has considered the submission and upheld the order of the TPO, holding that the TPO has considered the judgments of the Hon'ble Delhi High Court in the case of PCIT Vs. Kusum Healthcare 398 ITR 66, at page 6 of the order dated 25.10.2019 and give categorical finding of distinguishable facts emerging in this case. It was held that the TPO has noted the study of the bi l l wise and payment wise analysis of the receivables in the case of assessee reveals that this is not a case involving this issue for a year or two and, in fact there exists a consistent presence of outstanding receivables for almost every year in which interest free credit period ranges from 14 to 148 days. It was further, held the impact of this continued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benchmarked by the assessee by undertaking working capital adjustment during assessment proceedings and the same is subsumed in the working capital adjustment. The ld. DRP held that this argument was specifically negatived by the ITAT in Bechtel India cited supra, following its decisions in Ameriprise India (P) Ltd. and Mckinsey Knowledge Centre (P) Ltd. cited supra in the following words: "20. The Tribunal also explained that i f an invoice is raised during the year and the proceeds are realized within the year, but, beyond the stipulated period of agreement, their, the same will not come within the working capital adjustment because working capital adjustment is made with reference to the opening and closing balances as on 1s t April an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account impact of outstanding receivables and no further adjustment required if the margin of the assessee is higher than working capital adjusted margin of comparable. 13. The Hon'ble Delhi Tribunal in case of Ameriprise India P. Ltd. vs. ACIT (ITA No. 2010/Del/2014) [order dated 14.08.2015] considered the decision of coordinate bench in the case of Kusum Healthcare and held that the al lowing working capital adjustment in the international transaction of rendering services can have no impact on the determination of ALP of the international transaction of interest on receivables from AEs. 14. The Delhi Tribunal in the case of McKinsey Knowledge Centre Pvt. Ltd. Vs. DCIT [ITA No. 154/Del/2016] (order dated 15.12.2016) followed their findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est charged on outstanding receivable and concluded that the assessee's contention that the ITAT erred in concluding that charging of interest on delayed receipt, of receivables is a separate international transaction which requires to be benchmarked independently, is incorrect." 18. Aggrieved, the taxpayer (Mckinsey Knowledge) filed Review Petition before the Hon'ble High Court against the order dated 09.08.2018 and the Hon'ble High Court, vide order dated 16.04.2019 in Review Pet. No. 360/2018, was pleased to recall/correct their order dated 09.08.2018, holding as under: "9. As far as the first argument by the review petitioner, i .e., the answer to the question of bringing to tax the interest amounts goes, this Court is of the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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