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| The Tax Publishers2019 TaxPub(DT) 4890 (Del-Trib) INCOME TAX ACT, 1961
Section 92C
Since impact of delayed receivables had already been factored in working capital adjustment, therefore, any further adjustment on account of outstanding receivables was not called for, especially when assessee being a debt free company was also not charging interest on overdue debts from third parties.
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Transfer pricing - Determination of ALP - Interest on outstanding receivables from AE -
TPO suggested ALP adjustment as regards interest on outstanding receivables from assessee's AE based at abroad.Held: Assessee was not charging interest on overdue debts from third parties and also assessee was a debt free company not paying any interest on funds utilized in business. Credit period of the comparable companies had been found to be 147 days as against credit period allowed by assessee of 30 days. Also assessee had a margin of 23.3% as compared to margin of 11.42% of comparable companies and impact of the delayed receivables had already been factored in working capital adjustment and, therefore, any further adjustment on account of outstanding receivables was not required separately.
Relied:CIT v. Ekl Appliances Ltd. (2012) 345 ITR 241 (Del) : 2012 TaxPub(DT) 2071 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
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