TMI Blog2019 (11) TMI 1817X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest receivables Therefore, Ground of assessee is allowed. - SH. R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER For the Appellant by Sh. Ajit Korde, Adv. For the Respondent by Ms. Nidhi Sharma, Sr. DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed against the order dated 27.08.2019 passed u/s 144C(1) of the Income Tax Act, 1961 passed by ACIT, Circle 4(1), Gurgaon for assessment year 2015-16. 2. The grounds of appeal are as under : 1 That on facts and in law, the order passed by the Additional Commissioner of Income Tax - Transfer Pricing Officer - 1(3), New Delhi ( the learned TPO ), the draft assessment order and the final assessment order passed by the Assistant Commissioner of Income Tax, Circle-4( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount receivables arising from an international transaction are closely linked to the main transaction and should be benchmarked, using a combined transaction approach, by making a working capital adjustment. vi. by disregarding the order passed by the Hon ble ITAT in Appellant s own case for AY 2012-13, AY 2013-14 and AY 2014-15. vii. by disregarding the fact that the Hon ble ITAT had placed reliance on the order passed in case of Kusum Health Care Private Limited (ITA No. 765/2016) by the Hon ble High Court of Delhi. 5. That, without prejudice to the above, once working capital adjustment is granted no separate adjustment on account of outstanding receivables is maintainable. Part II- Consequential grounds of appeal 6. That the learned AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consulting Centre ( GCC ) 'wherein services in the nature of IT enabled are provided to other non-Indian Teradata Associated Entities (*AEs ).For the distribution segment, Teradata India is assured of a targeted return by its AEs and for the software services and GCC services segment, the Assessee is remunerated on cost-plus basis where all costs incurred by the Assessee are recovered along with a mark-up from the AEs. Accordingly, the Assessee operates in a risk- mitigated environment in respect of each of the said services. For the relevant assessment year the Assessee filed its return of income on 30.11.2015 declaring a total income of Rs. 41,09,17,230. The return was processed u/s 143(1) of the Income Tax Act, 1961. The case was sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Assessment Order. 7. We have heard both the parties and perused all the relevant material available on record. Ground nos. 1, 2, 3 are general in nature hence, dismissed. As regards to ground no. 4, the Tribunal in assessment year 2014-15 held as under :- 4.2 We have heard the rival submission of the parties and perused the relevant material on record. We find that the learned DRP directed to give working capital adjustment and re-compute the interest chargeable on outstanding net receivables by applying LIBOR + 400 bps. We also note that the Tribunal in ITA No. 87/Del/2017 for assessment year 2012-13 in case of assessee, following the decision of the Hon ble Jurisdiction High Court in the case of Principal Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an AE, the arrangement reflects an international transaction intended to benefit the AE in some way. 11. The Court finds that the entire focus of the AO was on just on AY and the figure of receivables in relation to that AY can hardly reflect a pattern that would justify a TPO concluding that the figure of receivables beyond 180 days constitutes an international transaction by itself. With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis- -vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterized the transaction. This was clearly impermissible in law as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court, is not a ground to take a contrary view against the assessee unless the order of the Tribunal have been set aside or stayed by the Hon ble jurisdictional Delhi High Court. In this view of the matter, we set aside the orders of the authorities below and delete the entire addition. In the result, ground Nos. 3 to 6 of the assessee are allowed. 4.4 In view of the above, following the decision of the Tribunal in assessment years 2012-13 and 2013-14, we set aside the finding of the learned DRP complied by the Assessing Officer in the impugned order and delete the adjustment on account of the interest receivables. In the result, the grounds No. 3 to 5 of the appeal of the assessee are allowed. From the perusal of the order passed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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