The Tax Publishers2020 TaxPub(DT) 5206 (Hyd-Trib)

INCOME TAX ACT, 1961

Section 92C

TPO was not required to make separate adjustment by way of imputation of interest on outstanding receivables as working capital adjustments had been granted by TPO, on which fact there was absolutely no dispute, the outstanding receivables thereon gets subsumed thereon.

Transfer pricing - Computation of ALP - Adjustment of imputation of interest on outstanding receivables -

Assessee filed appeal against the order of TPO making TP adjustment by way of imputation of interest on outstanding receivables relating to sales of services to associate enterprises. Held: Outstanding receivable is a separate international transaction and requires to be benchmarked post-amendment in clause (c) of Explanation to section 92B by the Finance Act, 2012. However, since in the instant case, the working capital adjustments had been granted by the TPO, on which fact there is absolutely no dispute, the outstanding receivables thereon gets subsumed thereon. Hence, there was no need to make separate adjustment towards outstanding receivables by imputation of interest on the same.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2013-14



IN THE ITAT, HYDERABAD BENCH

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