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TMI Blog2023 (4) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has raised various grounds of appeal. However, the Ld.Counsel for the assessee (in brevity the AR) has pressed only the grounds 1.17, 1.18 and 1.19. The all other grounds are kept open and without commenting on anything on merits on those grounds. 3. Tersely, we advert the facts of the case that the assessee is registered under Companies Act, 1956 and is a subsidiary of Sabre International B.V., a holding company which holds 95% equity share capital of the assessee. Assessee is engaged in providing software development and related services to its Associated Enterprises (AE). The functions, asset and risk analysis (FAR analysis) as per the TP study of the appellant, the following issues are agitated. For A.Y. 2017-18, the appellant r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, no borrowed funds are used to pass on any presumed benefit to AE. The appellant also does not pay any interest to its customers or suppliers on delayed payments. Since, it is debt free company; no adjustment can be made towards notional interest on receivables. The AR invited our attention in the order of the DRP in page no. 28 para no. 13.14 which is extracted as below. "13.14 It was similarly held in BT e-Sery (India) Pvt. Ltd. v. ITO, Ward- 5(2) 2017(60) ITR(Trib)618(Delhi) as follows: - 22...The argument that assessee is an interest free entity and does not pay any interest and therefore no interest shall be imputed in the outstanding invoices is also devoid of merit because it is not a case of allowance of interest expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly treated the delayed payments as loan facility advanced to the AE's. The ld.TPO charged 14.88% interest for the delayed period, beyond a period of 30 days. The ld. DRP upheld the adjustments made by the ld.TPO. 14.1. The ld.AR submitted that during the financial year, the assessee had entered into international transactions pertaining to provision of support services to its AE's. In this regards, the details of the invoices raised and the payment received with dated were submitted before the TPO/DRP. The ld.AR has submitted that thought there was no credit period that was specified in the service agreement, however the assessee had agreed a credit period of 60 days with its AE's. The ld.AR submits that it has sufficient cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of Kusum Healthcare Pvt.Ltd., reported in TS-129-ITAT-2015(Del)-TP. 14.4. The ld. DR relied on the orders of the authorities below. 15. From the submissions of both the parties we observe as under; 15.1. It is brought to our notice that the assessee is a debt free company. In such circumstances it is not justifiable to presume that, borrowed funds have been utilized to pass on the facility to its AE's. The revenue has also not brought on record that the assessee has been found paying interest to its creditors or suppliers on delayed payments. 16. In lieu of the discussions and the ratio laid down in the case of Kusum Healthcare Pvt. Ltd., we direct that no separate adjustment for interest on receivables are warrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the price for immediate payment plus 60 days of interest on immediate payment price. For making working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparable for which is the work out the adjustment on account of working capital adjustment. As the issue is first time agitated before the ITAT, we remit back the issue to the AO/TPO for further adjudication and to grant actual working capital adjustment after duly examining it. Accordingly, this ground is remitted back to the file of AO/TPO for reconsideration. 5.2. Regarding adjudication of Ground no. 1.19 with regard to exclusion of comparables, the assessee has filed a chart containing the argument of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent the AR placed that this comparable is functionally dissimilar due to diversified activities & has no segmental details. The AR relied on the order IT(TP)A No. 240/Bang/2022, AY 2017-18, supra. We direct to exclude the comparable from TP study. e) Infosys Ltd. In submission the assessee placed that this comparablecompany functionally dissimilar, no segmental details, containing licensing of software products, presence of intangibles, presence of brand & continuing the R&D activities. The reliance is placed in the order of the Coordinate Bench of ITAT-Bangalore in case of LG Soft India Pvt Ltd. AY 2015-16, IT(TP)A No. 2412/Bang/2019. In our considered view, the comparable company, Infosys Ltd is excluded from TP study. f) Cybage ..... X X X X Extracts X X X X X X X X Extracts X X X X
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