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TMI Blog2020 (7) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... ustment was warranted against the assessee - Decided in favour of assessee. - IT (TP) A No.7002/Mum/2016 - - - Dated:- 29-6-2020 - Shri Pawan Singh, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Appellant : Shri Amod Prabhudesai (AR) For the Respondent : Shri Akhtar H. Ansari (DR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the assessment order dated 30.09.2019 passed in pursuance of directions of dispute resolution penal (DRP) dated 12.07.2016 for assessment year (AY) 2012-13. The assessee has raised following grounds of appeal: 1. On the facts and circumstances of the case and in law, the Learned Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as may meet the ends of justice should be granted. 2. The assessee vide application dated 10.06.2020, raised following additional grounds of appeal; On the facts and circumstances of the case and in law, the Ld. AO/TPO and/ or Hon. DRP ought to have held that- since weighted average delay in realization of sales made to AEs of 138 days is lower as compared to weighted average delay of 146 days from Non-AEs and no interest is charged to Non-AEs, adjustment on account of notional interest for delay in realization of sales made to AEs of ₹ 39,75,839/- is not warranted and accordingly same should be deleted in its entirety. 3. Brief facts of the case are that the assessee-company is and engaged in the business of manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by TPO. The assessee exercised its option for filing objections before dispute resolution penal (DRP). The DPR after hearing the objections of the assessee directed the AO to apply LIBOR rate plus 3% as APL for interest on loan borrowed by AEs. The TPO while giving effect to the direction of DRP re-computed the working of TP adjustment and revised the adjustment on account of notional interest to ₹ 39,75,839/- as against ₹ 38,23,702/- as suggested initially by TPO in its directions dated 15.01.2016. On receipt of directions of the DRP, the AO passed the final assessment order by making the additions of Rs, ₹ 39,75,839/- on account of notional interest for delay in realising the debts from AEs. Thus, further aggrieved the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar delay in realising the amount from the AEs the TPO made similar additions and on objections before DRP, the adjustment on account notional interest was deleted. On further appeal by revenue before the Tribunal the appeal of the revenue was dismissed vide order dated 29.07.2016. The relevant part of the order is extracted below; 6. We have heard the rival contentions, perused the findings of the authorities below as well as material available on record. The ld. Counsel for the assessee has placed reliance on the judgment of the Hon'ble Bombay High Court in the case of CIT-9 vs. Indo American Jewellery Ltd.. The said head note is extracted below: Section 92C of the Income-tax Act, 1961- Transfer Pricing- Computation of arm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in some of the cases, it has gone beyond 1200 days whereas in the case of Non-AE, the maximum delay is of 203 days. In view of the above, the order of the Tribunal in the case of the assessee for the A.Y. 2008-09 is not applicable to the issue at hand for the A.Y. 2009-10. 6.3 Let us now examine the facts in the present case. In a case like this the proper method is to take a simple average. If we take a simple average then there has been a delay of 132 days in the case of AE and 130 days in the case of Non- AEs in realization of the export proceeds. Thus there is uniformity in the act of the assessee in not charging interest from both AE and Non-AE debtors for delayed realization of export proceeds. 7. Respectfully following the j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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