INCOME TAX ACT, 1961

Section 92C

Transfer Pricing - Computation of ALP - TP adjustment of interest on delayed realization of receivables from AEs -

AO made an adjustment of interest @12% as ALP on delayed realization of receivables from AEs. Assessee contended that AO erred in making impugned ALP adjustment without benchmarking it with the corresponding comparables and also that such receivables did not form international transactions within the meaning of section 92B. Held: It was clear from perusal of the assessment findings that the ALP adjustment of interest @12% was based on the assessee's details produced in its letter as the said letter contained the request to adopt the interest rate @12% than @14.75% taken by the TPO. Thus, it was difficult to assume as to how the assessee could be taken as an aggrieved party once the impugned adjustment was based on its own computation submitted during the course of assessment. Further, it is settled proposition of law that interest on delayed realization on receivables is an international transaction in itself. Therefore, the AO was justified in making an adjustment of interest @12% as ALP on delayed realization of receivables.

Followed:Asstt. CIT v. Vireet Investment (P.) Ltd. (2017) 165 ITD 267 (Del-Trib) : 2017 TaxPub(DT) 1760 (Del-Trib).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 143

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