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TMI Blog2024 (10) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... y the name of the company being changed. We hold that the assessee would be entitled for deduction of expenditure in respect of contribution made to Employees Gratuity Fund. TP Adjustment - international transaction of interest on outstanding receivables from the Associated Enterprises (AEs) - HELD THAT:- We find that the ratio laid down by the Delhi Tribunal in the aforesaid case squarely applies to the facts of the instant case before us. Tribunal in the case of Bechtel India Pvt. Ltd. [ 2015 (12) TMI 1560 - ITAT DELHI ] it was pleaded that assessee is a debt free company and hence, there is no question of charging interest on outstanding receivables from AEs. But on perusal of the orders of the lower authorities, we find that no such finding is given in the orders to this effect. No submission was even made by the assessee before the lower authorities to this effect. Hence, we refrain to consider this argument in this order. Assessee s margin is much much higher than the comparables margin, the transfer pricing adjustment on interest on outstanding receivables would have no legs to stand in the peculiar facts and circumstances of the instant case. The other legal arguments advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x and that the original approval was granted to the assessee in the name of GKN Driveshafts (India) Ltd. and thereafter, the name of the assessee company has been changed to GKN Driveline (India) Ltd. Accordingly, it was pleaded that the approval granted to the assessee in its erstwhile name shall apply with all force for the changed name of the assessee also. It was also pointed out to the learned DRP that similar proposal for making disallowance was initiated by the learned AO in A.Y. 2018-19 wherein it was brought to the notice of the learned AO that name of the company has changed and the approval granted in its old name was also placed on record. The learned AO after due explanation of the same was pleased to grant deduction for the similar contribution made to LIC Gratuity Fund in A.Y. 2018-19. Based on these submissions of the assessee, the learned DRP directed the learned AO to verify these facts from the records and also ensured whether all the conditions prescribed under Section 36(1)(v) of the Act was specified by the AO. 4. The learned AO in the giving effect proceedings to learned DRP directions observed that the copy of the letter of approval of the CIT dated 16.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re accepted by the learned TPO to be at Arm s Length Price (ALP). The learned TPO called for details of outstanding receivables from AEs invoice wise. These details were duly furnished by the assessee. The learned TPO considered the outstanding receivables from AEs as a separate international transaction in view of the amendment to Section 92B of the Act, proceeded to determine the ALP of the said international transaction by imputing interest @ LIBOR of 1.426% + 3% thereby applying the total interest rate of 4.426%. The learned TPO accepted the credit period to be allowed to the AEs at 60 days and wherever invoices were realized by the assessee from its AEs beyond this stipulated credit period of 60 days, interest was imputed by learned TPO @ 4.426% and Transfer Pricing Adjustment of Rs. 2,43,237/- was made by him. The workings for arriving of the said figure are enclosed in Page Nos. 17 to 68 of the order of the learned TPO. 8. This action of the learned TPO was upheld by the learned DRP. Accordingly, the final assessment order stood passed by the learned AO by repeating the Transfer Pricing addition of Rs. 2,43,237/- on account of interest on outstanding receivables from AEs. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w have treated the delayed payment beyond 30 days as loans. In fact, no loan have been extended by the assessee. It was the amount 'due' against the A.Es. as well as non-A.E. on which interest have been charged by considering the deemed loans. Therefore, the decision of ITAT, Delhi Bench in the case of M/s. Kusum Healthcare Pvt. Ltd., (supra), squarely apply in the case of the assessee, since the assessee earned significantly higher margin than the comparable companies, which have been accepted by the TPO, therefore, there was no justification to charge interest on outstandings. The decision of Hon'ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Kusum Healthcare Pvt. Ltd., (supra), squarely apply to the facts and circumstances of the case. The assessee also explained that there are similar delays in collection of outstanding receivables from both A.Es and non-A.Es which is due to business and commercial reasons. Therefore, there is uniformity in act of assessee in not charging interest from A.Es and non-A.Es. Therefore, the decision of the Hon'ble Bombay High Court in the case of CIT vs. Indo American Jewellery Ltd., (supra), squarely apply to the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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