9911796707
TMI Blog2017 (4) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... l, under Section 260A of the Income Tax Act, 1961 ('the Act'), by the Revenue is directed against the order dated 31st March, 2015 passed by the Income Tax Appellate Tribunal, Delhi Bench '1', New Delhi ('ITAT') in ITA No. 6814/DEL/2014 for the Assessment Year ('AY') 2010-11. 4. The facts in brief are that the Assessee is engaged in the business of exporting pharmaceutical products to its overseas Associated Enterprises ('AEs') as well as to third parties. The Assessee filed its return for the AY in question on 13th October, 2010 declaring a total income of Rs. 2,06,64,960/- The return was picked up for scrutiny and notices under section 143(2)/142(1) of the Act were issued by the Assessing Officer ('AO'). Since the Assessee had, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent/Assessee filed its objections to the said draft assessment order, before the Disputes Resolution Panel ('DRP') which, by the order dated 24th September 2014, rejected the objections. The TPO gave effect to the aforementioned directions of DRP on 13th November, 2014. On 14th November, 2014 the AOpassed the final assessment order by making an addition of Rs. 93,69,275/- to the income of the Assessee. 8. 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 "th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reeing 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 Act of the expression 'receivables' does not mean that de hors the context every item of 'receivables' appearing in the accounts of an entity, which may have dealings with foreign AEs would automatically be characterised as an international transaction. There may be a delay in collection of monies for supplies made, even beyond the agreed limit, due to a variety of factors which will have to be investigated on a case to case basis. Importantly, the impact this would have on the working ..... X X X X Extracts X X X X X X X X Extracts X X X X
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