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TMI Blog2023 (2) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, no interest was charged on similar transactions as that with AEs and the AO/TPO is directed to examine the same and decide the issue afresh as per provisions of law. In light of the above, if the AO/TPO, after verification, finds that no interest was charged from receivables from non-AEs on similar transactions, then no adjustment is warranted. Appeal of the assessee is allowed for statistical purposes. - ITA No. 5956/DEL/2019 - - - Dated:- 11-10-2022 - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For the Assessee : Shri Nageshwar Rao, Adv Shri Shatanik Chakraborty, Adv Shri Akshay Uppal, Adv For the Department : Shri Bhaskar Goswami, CIT- DR ORDER PER N.K. BILL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outstanding receivables as a separate international transaction by ignoring the fact that account receivables arising from an international transaction are closely linked to the main transaction and should be benchmarked, using a combined transaction approach and carrying out working capital adjustment; ii. By re-characterizing the nature of outstanding receivables as unsecured loan advanced to AEs; iii. Without prejudice to the Ground No. 3i and 3ii above, the Learned TPO/ AO/ DRP have failed to appreciate that: (a) the Appellant does not charge any interest from unrelated parties; and (b) the AEs do not charge any interest from the Appellant on outstanding payables towards the AEs iv. Without prejudice to Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the assessee has made international transaction with AE, a reference in this regard was made to the TPO. The TPO, vide order dated 29.10.2018, proposed an upward adjustment on account of interest receivables as under: Sl No. Interest on receivables classification Amount 1 Fujitsu Technology FZE (as per para. 8.1) 1,850,418 2 Abu Dhabi Computer Centre (as per para 8.2) 8,982,913 3 On transaction where the date of payment received by the assessee was not provided by the assesseefas per para 9) 2,408,893 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the assessee during the relevant year by treating it as closely linked to the main service transactions. 11. The ld. counsel for the assessee further stated that both the Assessing Officer and the TPO did not agree with the economic analysis undertaken by the assessee and imputed interest @ 13 % on the intercompany receivables outstanding beyond the stipulated period by treating it as advancing of unsecured loan to the AEs. 12. The ld. counsel for the assessee vehemently stated that if the outstanding receivables were to be treated as an international transaction, then due consideration should be given to the price charged under uncontrolled scenario as the assessee has provided similar services to unrelated parties and no intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully considered the rival submissions. The Hon ble Jurisdictional High Court of Delhi in the case of Kusum Healthcare Pvt Ltd [Supra] has held as under: 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 imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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