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TMI Blog2023 (2) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs. 9,21,217/-, being interest imputed by the Transfer Pricing Officer (for short TPO) on outstanding receivables from the Associated Enterprises (AE). 3. Briefly the facts relating to this issue are, the assessee is a non resident corporate entity engaged in the business of providing consultancy and advisory services (including project construction and execution thereof) in the field of water management industry. In the year under dispute, the assessee entered into various international transactions with its overseas Associated Enterprises (AE's). The assessee suo-motu undertook benchmarking of international transactions and reported the price charged for such transactions to be at arm's length. After verifying the TP study report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceivable cannot be a separate adjustment as the entity level results have already been accepted. Thus, ultimately the TPO proceeded to determine the arm's length rate of interest on outstanding receivables by applying six month's LIBOR plus 400 basis points and accordingly suggested an adjustment of Rs.9,21,270/-. The adjustment so proposed was added to the income of the assessee in the draft assessment order. Against the draft assessment order the assessee raised objections before DRP. However, Learned DRP upheld the adjustment. 5. Before us, the Ld. Counsel appearing for the assessee, firstly, submitted that once the TPO had accepted the ALP of the international transactions with AE, he cannot consider the outstanding receivables on stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.20 (AY 2015-16) 4. Global Logic India Ltd. Vs. DCIT (ITAT Del) ITA No.7621/Del/2017 DOJ 07.09.20 (AY 2013-14) 5. Sony Ericsson Mobile Communication India P. Ltd. - Delhi HC ITA No.16/2014; DOJ 16.03.2015 6. The Ld. Departmental Representative strongly relied upon the observations of the Assessing Officer and learned Commissioner (Appeals). 7. We have considered rival submissions in the light of the decisions relied upon and perused the material available on record. Undisputedly, as per the facts and material available on record, in respect of two AE's the assessee has received the outstanding amount against invoices raised beyond the agreed credit period of 30 days. The issue which arises for consideration is, whether the delay i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has allowed the AE to reap financial benefit at the cost of assessee, as, the assessee is incurring interest cost. Therefore, interest cost has to be imputed on delay in receiving outstanding invoice amounts. Having held so, we must observe, we find merit in the alternative submissions made by the assessee as regards non charging of interest beyond 31.03.2013 and charging interest after allowing normal credit period of 60 days. This is so because, the assessee has demonstrated before us that it has allowed credit period of 60 days to non AE's and other customers. 8. Before us, the assessee has furnished the computation of interest charged for delays relating to the period 01.04.2010 to 31.03.2013 considering normal credit period of 60 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her words, the Assessing officer estimated the budgeted contract cost in an indirect manner by adopting gross margin of 6.9% with regard to all activities of the assessee including all contracts. While deciding the objections on the issue Ld. DRP directed the Assessing Officer to adopt the budgeted contract costs by reducing from the contract the gross profit based on the gross margin of 6.9% alongwith other operating expenses. 10. Before us, it is a common point between the parties that the issue is squarely covered by the decision of the Tribunal in assessee's own case in assessment year 2011-12. Having considered rival submissions we find, while deciding identical issue in assessee's case in assessment year 2011-12 the Tribunal vide ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coordinate Bench on the issue, we direct the Assessing Officer to delete the addition. 12. In the result, ground No.3 is allowed. 13. In ground No.4, the assessee has challenged the disallowance of Rs.15,61,108/- under section 43B of the Act representing leave encashment benefit paid to employees during the previous year relevant to assessment year under dispute. 14. Before us, Ld. Counsel appearing for the assessee submitted that the deduction was not claimed by the assessee in the return of income. He submitted, in course of assessment proceedings the assessee had claimed the deduction, which was not accepted by Assessing Officer as it was not claimed through revised return under section 139 (5) of the Act. He submitted, the reasoning ..... X X X X Extracts X X X X X X X X Extracts X X X X
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