The Tax Publishers2020 TaxPub(DT) 4045 (Del-Trib)

INCOME TAX ACT, 1961

Section 92C

When undisputedly impact of working capital of tested party vis-a-vis comparables had been factored in profitability of assessee while benchmarking international transaction qua ITES segments and same had been held to be at arm's length, then there was no need to impute interest on outstanding receivables from AE as further adjustment would distort the entire picture.

Transfer pricing - Determination of ALP - Interest on delayed receivables from AE - Working capital adjustment already granted to assessee

Assessee rendered IT-enabled services to its AE abroad. TPO sggested ALP adjustment on account of notional interest on delayed payment of outstanding receivables from AE. Held: When undisputedly impact of working capital of tested party vis-a-vis comparables had been factored in profitability of assessee while benchmarking international transaction qua ITES segments and same had been held to be at arm's length, then there was no need to impute interest on outstanding receivables from AE as further adjustment would distort the entire picture.

Relied: M/s. Target Sourcing Services India Pvt. Ltd. v. ACIT ITA No. 4132/Del/2017 : 2020 TaxPub(DT) 0184 (Del-Trib), Pr. CIT v. Kusum Health Care Pvt. Ltd. in ITA No. 765/2016 Order, dated 25-4-2017 : 2017 TaxPub(DT) 4367 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14


INCOME TAX ACT, 1961

Section 10AA

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