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TMI Blog2024 (12) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer had made adjustment in hands of assessee-company on account of interest on outstanding receivables, since assessee-company was a debt free company and no interest was paid to creditor/supplier nor any interest had been earned from unrelated party, question of receiving any interest on receivables did not arise. DRP had directed the Learned TPO to grant working capital adjustment on the provision of services segment, which was not given by TPO, which results in violation of provisions of section 144C(10) of the Act. In any event, once the same is granted, there is no need to separately impute interest on outstanding receivables as it would get subsumed in the working capital adjustment itself. This proposition has been accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BALAGANESH, A. M.: 1. The appeal in ITA No.1468/Del/2022 for AY 2018-19, arises out of the order of the Assessing Officer, New Delhi [hereinafter referred to as ld. AO , in short] in Appeal No. ITBA/AST/S/143(3)/2022- 23/1042877904(1) dated 27/04/2022. 2. The Ground No. 1 raised by the assessee is general in nature and does not require any specific adjudication. 3. The Ground No. 2 raised by the assessee is challenging the transfer pricing adjustment of Rs 10,34,642/- made on account of interest on outstanding receivables from the Associated Enterprises (AEs). 4. We have heard the rival submissions and perused the materials available on record. The assessee is engaged in rendering design engineering services in the areas of buildings, tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nel (DRP). The Learned DRP vide its directions dated 9-3-22 upheld the action of the Learned TPO in principle, but directed the Learned TPO to calculate interest on outstanding receivables for delays beyond 60 days. The Learned TPO gave effect to the directions of the Learned DRP vide order dated 22-4-22, thereby reducing the impugned transfer pricing adjustment to Rs. 10,34,642/- after considering the delay in receivables beyond 60 days from the AEs. 6. The Learned AR before us made a preliminary argument that interest on outstanding receivables per se could not be construed independently as a separate international transaction and hence no adjustment under chapter X of the Act could be made for the same. This argument of the Learned AR is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 765 / 2016 dated 25-04-2017 in support of this proposition. Further, he also submitted that assessee is a debt free company and had not paid any interest either to its AEs or to third parties. Accordingly, there is no requirement for the assessee to even charge interest on delayed receivables either from the AEs or from outsiders. In support of this proposition, he placed reliance on the decision of Hon ble Jurisdictional High Court in the case of PCIT vs Boeing India Pvt limited reported in 457 ITR 84 (Del). Per Contra, the Learned DR vehemently relied on the order of the Learned TPO and the elaborate workings adopted by him for charging the interest invoice wise after allowing credit period of 90 days on delayed receivables from AEs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tstanding receivables separately in the peculiar facts and circumstances of the case of the assessee company herein. Accordingly, the Ground Nos. 1 2 raised by the assessee are allowed. 9. The Ground No. 3 raised by the assessee is challenging the rejection of claim made by the assessee towards deduction of expenditure under section 35DD of the Act based on the assessment order for Assessment Year 2017-18. 10. We have heard the rival submissions and peruse the materials available on record. The assessee vide letter dated 2-8-2021 filed for an additional claim for deduction under section 35DD of the Act of Rs 62,39,102/- being the 1/5th share of Rs 3,11,95,508/-, being the second year of deduction under section 35DD of the Act based on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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