TP Adjustment - Interest on extended credit to AE - assessee ...

Court Reviews Transfer Pricing Adjustment for Interest on Extended Credit to Associated Enterprise Under Arm's Length Principle.

April 23, 2022

Case Laws     Income Tax     AT

TP Adjustment - Interest on extended credit to AE - assessee granted extended credit periods to non-AEs without charging any interest on delayed payments - CIT(A) has rightly pointed out that Transfer Pricing regime normally judges the transfer pricing of the tax payer based on the results rather than on the intent to shift income from one side to another. In the normal ALP an element of implied interest would always have been there so as to compensate for the opportunity cost and notional financial cost associated with account receivable/ adjustments so called for. - AT

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