TaxTMI 
TaxTMI 
2022 (1) TMI 1320
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....for the assessment year 2013-14 for the quantum of assessment under Section 143(3)/144C of the Income Tax Act, 1961 (the Act). 2. In both the appeals, common grounds are involved arising out of identical set of facts and issues, therefore, both the appeals are being disposed of, by this consolidated order. 3. In both the appeals the assessee has challenged the Transfer Pricing assessment on account of notional interest on outstanding payments of receivables from associated enterprises (AE). In assessment year 2012-13, adjustment of Rs.46,07,661/- was made by the TPO, whereas in assessment year 2013-14 the said adjustment was worked out at Rs.23,98,532/-. 4. The facts in brief are that Assessee Company is wholly own subsidiary and strateg....
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....lternative contention has been raised vide ground No. 8 in assessment year 2012-13; and ground No. 4 in assessment year 2013-14, that working capital adjustment irons out the credit period extended to AEs and non AEs and hence no adjustment is called for on the facts of the case. It was submitted that the working capital adjustment based on the net margin profit of the comparables has been arrived at 4.50% as against the net profit margin earned by the assessee of 9.26% for the assessment year 2012- 13 which is significantly higher than the adjustment margin earned by the comparable companies for which detail computation has been filed at page 178 of the Paper book for the assessment year 2012-13. Similarly, at page 124 of the paper book fo....
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....he ld. DR strongly relied upon the order of the CIT (Appeals) and the order of the ITAT in assessment year 2011- 12. On the issue of computation of working capital adjustment he submitted that the matter should be restored back to the TPO with computation submitted by the assessee as the same has not been examined by the AO / TPO. 8. We have heard the rival submissions and also perused the impugned orders as well as the material placed before us. Here in this case, admittedly no adjustments have been proposed by the TPO on the principal international transactions, with regard to man-power equipment related, employee related transactions, reimbursement of cost etc. The reason being the net operating margin of the assessee from various servi....
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....under:- "Aggrieved by the said order, the Assessee filed an appeal before the ITAT. By the impugned order dated 31th March 2015, the ITAT set aside the assessment order. The ITAT noted that the Assessee had undertaken working capital adjustment for the comparable companies selected in its transfer pricing report. It was further noted that "the differential impact of working capital of the Assessee vis-à-vis its comparables had already been factored in the pricing/profitability" which was more than the working capital adjusted margin of the comparables and, therefore, "any further adjustment to the margins of the Assessee on the pretext of outstanding receivables is unwarranted and wholly unjustified." 10. The Court is unable to ....
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.... separately. If the working capital adjustment is accepted, then the differential impact of working capital of the Assessee vis-à-vis the comparables stands already factored in the pricing/profitability, which herein this appears to have been done and it has been stated that the working capital adjusted margin of the comparables is around 4% whereas assessee's margin is around 9% and thus, no further adjustment is required. Before the Assessing Officer the assessee has up-dated the comparable companies and has filed the working capital adjustment margin which was in response to the show cause notice. From the perusal of the working it is seen that, in assessment year 2012-13 the working capital adjusted on the comparable company was ....