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| The Tax Publishers2020 TaxPub(DT) 4755 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C Section 92B
When assessee adopted uniform policy for non charging of interest on export receivable from AE and non-AE, there could not be any occasion to make ALP adjustment, for notional interest, on delay in realisation of trade debts from AEs.
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Transfer pricing - Determination of ALP - Notional interest on delay in export receivable from AE - Applicability of Explanation to section 92B--No interest charged from non-AEs
Assessee exported goods to its AE abroad. TPO considered delay in realisation of export receivable from AEs as separate international transaction and suggested TP adjustment on account of notional interest on such receivables.Held: Explanation to section 92B as inserted vide Finance Act, 2012 is prospective and, therefore, not applicable for the year under consideration. Further, there was average delay in receivable from AE of 39 days and in case of non-AEs it was 44 days. However, assessee was not charging interest from non-AE on such export receivable and when assessee adopted uniform policy for non-charging of interest on export receivable from AE and non-AE, there could not be any occasion to make ALP adjustment, for notional interest, on delay in realisation of trade debts from AEs.
Relied:Asstt.CIT v. Gitanjali Exports Corporation Ltd. (2016) 81 Taxmann.com 452 (Mum)(Mag) : 2016 TaxPub(DT) 3225 (Mum-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 37(1)
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