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TMI Blog2023 (4) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... owance u/s 43B - Adjustment made in the intimation u/s 143(1) - HELD THAT:- The present appeal of the assessee arises out of the final assessment order (final assessment order, which has considered the issues which are adjudicated by the TPO, the draft assessment order and the DRP s directions). Therefore, the issue of adjustment made in the intimation u/s 143(1) cannot be raised in the present appeal before the Tribunal. However, we notice that the assessee has filed rectification application as against the intimation u/s 143(1) of the I.T. Act. The assessee shall pursue rectification application u/s 154 . - IT(TP)A No.907/Bang/2022 - - - Dated:- 23-11-2022 - Shri George George K, JM Shri Laxmi Prasad Sahu, AM For the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 23.09.2019 and duly served on the assessee. During the course of assessment proceedings, the Assessing Officer referred the matter to the Transfer Pricing Officer (TPO) to determine the Arm s Length Price (ALP) of the international transactions undertaken by the assessee with its AEs. The TPO passed orders u/s 92CA of the I.T. Act on 30.07.2021 by making the following TP adjustments:- Software development segment Rs.3,53,16,441 Interest on delayed receivables Rs.23,28,370 Total Rs.3,76,44,811 4. Pursuant to the TPO s order, draft assessment order was passed on 22.09.2021 incorporating the TP adjustment made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds pressed, as under: Grounds 7 and 8 (TP Adjustment) Interest on outstanding receivables. 6. The brief facts in relation to the above grounds are as follows: The TPO made adjustment on interest on delayed receivables from AEs. The TPO treated the delayed receivable as international transaction and imputed interest making an adjustment of Rs.23,28,370 (page 78 of the TPO s order). The TPO applied SBI short term deposit interest rate for the relevant assessment year as the ALP interest rate (refer page 76 of the TPO s order). The TPO, however, had observed that the credit period of 45 days is allowable as per the agreement and adjustment is computed on amounts outstanding beyond 45 days. 7. The DRP vide its directions date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and thereby would not warrant levy of any interest on delayed receivables. Finally, the learned AR by relying on the Bangalore Bench order of the Tribunal in assessee s own case for assessment year 2017- 2018 in ITA No.297/Bang/2022 (order dated 24.08.2022), submitted that the matter may be remanded to the TPO for determining the ALP with regard to the interest on delayed receivables by following the Rules with a proper benchmarking study. The learned AR prayed for a similar direction in the present appeal also. 9. The learned Departmental Representative supported the orders of the TPO and the DRP. 10. We have heard rival submissions and perused the material on record. On identical facts, the Tribunal in assessee s own case for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The assessee has receivables as on 31st March for an amount of Rs.24.35 crores whereas the receivable is Rs.14.96 crores and if the same are netted off, it would result in a negative receivables position, thereby not warranting levy of any interest on delayed receivables. The ld AR also brought to our attention that the assessee is a debt-free company and it is a settled principle that no adjustment for interest on delayed receivables is warranted for debt free companies since such companies are not required to pay any interest on borrowings. The ld AR relied on the decision of the Delhi Tribunal in the case of Bechtel India Pvt Ltd (ITA No.1478/Del/2015) and this order of the Tribunal is accepted by the Hon ble Delhi High Court and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2017-2018. It is ordered accordingly. 12. In the result, grounds 7 and 8 are allowed for statistical purposes. Ground 10 : Disallowance u/s 43B of the I.T. Act. 13. We find this issue arises out of adjustment made in the intimation u/s 143(1) of the I.T. Act. The above issue of disallowance u/s 43B of the I.T. Act was not subject matter of adjudication in the draft assessment order nor before the DRP. The present appeal of the assessee arises out of the final assessment order (final assessment order, which has considered the issues which are adjudicated by the TPO, the draft assessment order and the DRP s directions). Therefore, the issue of adjustment made in the intimation u/s 143(1) of the I.T. Act cannot be rais ..... X X X X Extracts X X X X X X X X Extracts X X X X
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