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TMI Blog2023 (6) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... side lightly, though needs due verification by lower authorities. We, therefore, restore this issue to the file of the TPO/AO. Assessee is directed to furnish necessary documentary evidences to demonstrate that on outstanding receivables from unrelated parties, no interest was charged on similar transactions as that with AEs and the Assessing Officer/TPO is directed to examine the same and decide the issue afresh as per provisions of law. - ITA No. 931/Del./2021 - - - Dated:- 20-6-2023 - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Nageswar Rao, Advocate, Ms. Deepika Aggarwal, Advocate For the Revenue : Shri Anshuman Patnaik, CIT DR ORDER PER SHAMIM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. Imputing interest on outstanding receivable to its AEs ignoring the fact that the Appellant is a debt-free company; iv. Without prejudice to the Ground No.3(i), 3(ii) and 3(iii) 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO/TPO rejected the economic analysis undertaken by assessee and imputed interest at the rate of 4.609 % (6 Month LIBOR rate plus 400 basis points) on the inter-company receivables outstanding beyond 30 days period by treating it as advancing of unsecured loan to the Associated Enterprises ( AEs ). Accordingly, the AO/ TPO determined transfer pricing adjustment of INR 5,54,066 in the draft assessment order dated 19th December 2019. 3.1 Aggrieved by the draft assessment order dated 19th December, 2019, the assessee filed its objections before the DRP on 16th January 2020. Subsequently, TPO suo moto issued rectified order dated 28th February 2020 in which the adjustment amount was increased to INR 1,20,74,056 as interest on outstandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the assessee has provided similar services to unrelated parties and claims that no interest was charged with respect to outstanding receivables from unrelated parties, in all fairness, this contention cannot be brushed aside lightly, though needs due verification by lower authorities. 15. We, therefore, restore this issue to the file of the TPO/Assessing Officer. The assessee is directed to furnish necessary documentary evidences to demonstrate that on outstanding receivables from unrelated parties, no interest was charged on similar transactions as that with AEs and the Assessing Officer/TPO is directed to examine the same and decide the issue afresh as per provisions of law. 8. We find that the facts in the aforesaid order ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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