The appellant relied on the Delhi High Court's judgment in Kusum ...

Receivables Interest Imputation Debated: Court Directs TPO to Examine Bills, Adhere to Kusum Healthcare Precedent.

Case Laws     Income Tax

September 2, 2024

The appellant relied on the Delhi High Court's judgment in Kusum Health Care Pvt. Ltd., which held that once working capital adjustment is granted, there is no need to impute interest on outstanding receivables at year-end as it gets subsumed in the working capital adjustment. The Tribunal agreed with this proposition but directed the TPO to examine the bills and ascertain whether interest should be imputed on bills realized after the credit period of 70 days. The High Court modified the order, directing the TPO to look into the entire aspect in light of the Kusum Health Care judgment and pass orders accordingly, without imputing interest on the bills.

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