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TMI Blog2015 (9) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... port made by AEs beyond 180 days. 2. Brief facts qua the issue are that, assessee is in the business of manufacturing of diamond studded jewellery whereby it imports rough diamonds from its Associates Enterprises (AE) and exports polished diamonds as well as diamond studded jewelleries back to its AE. During the year, the assessee had undertaken following international transaction with its AE : S.No. Transaction FY 02-03 Method 1 Import of Rough Diamonds 12,05,31,932 TNMM 2 Export Polished Diamonds 19,34,81,398 TNMM Total 31,40,13,330 3. Transfer Pricing Officer observed that there was delay in realization of debts from the AE on which no interest has been charged, which in a third party situation such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 208 100.00% Ld. CIT(A), however, confirmed the said adjustment after observing that such a delayed payment receivable or any other such debt arising during the course of business is an international transaction and therefore not of charging of interest on the delayed payment is unjustified in a related party transaction. 5. Before us, Ld. Counsel after reiterating the entire facts, submitted that, first of all, no interest should be charged on such a minor delay in few transactions, which is evident from the fact that out of 33 transactions, in 25 transactions the payments were received within 180 days and in other 6 transition delay was 30 days. Thus, on these facts no adjustment is required to be made. Without prejudice, he submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, neither the TPO nor the assessee has given any comparable instance as to whether in such a situation or condition an unrelated party would have charged interest. If in the majority transaction there no delay then for few transactions interest cannot be imputed, unless it is benchmarked with the transactions with some unrelated parties. However, no such comparable instance has been filed or sown before us. Therefore, we feel that in the 8 transactions where there is a delay beyond the period of 180 days, the interest if at all, should be levied. Then same should be on the basis of LIBOR + 150 points (i.e. 1.5%) as held by the Tribunal in the case of. Accordingly, we direct the TPO/AO to apply the interest rate of LIBOR + 1.5% and work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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