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TMI Blog2022 (10) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... H COURT] has no application to the present case as the ITAT has returned a finding that the real employer of the seconded employees continues to be the Indian entity and not the overseas entity. Consequently, this Court is of the view that the issues of receivables as well as disallowance under Section 40(a)(ia) of the Act are essentially questions of fact, which give rise to no substantial questions of law especially when the findings of the ITAT are not perverse. Draft order framed u/s 144(c)(1) of the Act is in the name of a non-existent company - Question No.1 is left open to be agitated in an appropriate matter. - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Appellant Through: Mr. Sanjay Kumar, Sr.Standing Counsel for the Revenue. Respondent Through: Ms.Sachit Jolly with Mr. Rohit Garg, Ms. Disha Jham and Mr. Sphum Dua, Advocates. J U D G M E N T MANMOHAN, J (Oral): C.M.No.15980/2022 Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of. ITA No.71/2022 1. Present appeal has been filed challenging the order dated 17th August, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act of the expression receivables does not mean that dehors the context every time of receivables appearing in the accounts of an entity, which may have dealings with foreign associated enterprises would automatically be characterized as in 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 capital of the assessee will have to be studied. In other words, there has to be a proper inquiry by the Transfer Pricing Officer by analyzing the statistics over a period of time to discern a pattern which would indicate that vis- vis the receivables for the supplies made to an associated enterprise, the arrangement reflects an international transaction intended to benefit the associated enterprise in some way. 5. Leraned counsel for the appellant also states that the ITAT has erred in deleting the additions of Rs.56,58,19,799/- made by the Assessing Officer under Section 40(a)(ia) read with Section 195 of the Act without appreciating that the assessee was clearly liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the High Court that as far as Question-B concerning adjustment for interest on receivabales is concerned, the Tribunal has returned a finding of fact. Consequently, no substantial question of law therefore, arises, on the facts of this case. The special leave petition is dismissed. 10. Even the judgment of this Court in Principal Commissioner of Income Tax vs. Kusum Healthcare Pvt. Ltd. (supra) is not in favour of the appellant. The Division Bench while dismissing the appeal of the revenue observed as under:- 12. The court finds that the entire focus of the Assessing Officer was on just one assessment year and the figure of receivables in relation to that assessment year can hardly reflect a pattern that would justify a Transfer Pricing Officer 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-a-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and recharacterised the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi II vs. Karl Storz Endoscopy India (P) Ltd., ITA No.13/2008 decided on 13th September, 2010 has held as under:- 1. This appeal pertains to the Assessment Year 2001-02. The issue relates to the treatment which is to be given to the amount of Rs.6,59,416 paid by the assessee to its parent foreign company, i.e., Karl Storz Vertriebs GMBH Company. The assessee had claimed that he parent company had deputed one of the employees, viz., Mr. Peter Laser to the Indian Company/assessee and the aforesaid amount represented reimbursement of the salary, which was payable to Mr.Peter Laser. The Assessing Officer (AO), however, was of the opinion that since no agreement between the assessee and the parent company was produced and even the agreement between the parent company and its employees. Mr. Peter Lazer on the basis of which he was purportedly deputed to the Indian Company was produced, this amount should be treated as payment towards technical fee. xxx xxx xxx 3. Learned counsel for the respondent-assessee has pointed out that this was not the first year in which such a claim was made. He stated that the Indian Company was incorporated during the Assessment year 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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