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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD
Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU
Assessment Year: 2013-14 DST Worldwide Services Assistant Commissioner of India Private Limited, Vs Income Tax, HYDERABAD Circle-17(1), [PAN: AAACI7097L] HYDERABAD (Appellant) (Respondent) For Assessee : Shri Kiresh Shivkar, AR For Revenue : Shri Y.V.S.T.Sai, CIT-DR Date of Hearing : 28-09-2021 Date of Pronouncement : 16-11-2021 O R D E R PER S.S.GODARA, J.M. : This assessee’s appeal for AY.2013-14 arises against the ACIT, Circle-17(1), Hyderabad’s assessment, dated 28-09-2017 framed in furtherance to the Dispute Resolution Panel (‘DRP’)- 1, Bengaluru’s directions dt.22-08-2017 in F.No.291/DRP-1/ BNG/2016-17, involving proceedings u/s.143(3) r.w.s.92CA(3) and 144C(13) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.
It transpires at the outset that the assessee’s instant appeal suffers from four days’ delay stated to be attributable to the reason(s) beyond his control as per condonation petition/affidavit. No rebuttal has come from the departmental side. The impugned delay is condoned therefore.
We notice at the outset that there is hardly any need for us to delve much deeper so far as the assessee’s sole substantive grievance challenging Arm’s Length Price (ALP) adjustment pertaining to interest on receivables of Rs.16,82,292/-; is concerned. We make it clear first of all that such interest on receivables indeed forms an international transaction as per Section 92B explanation (c) of the Act inserted by the Finance Act, 2012 with retrospective effect from 01-04-2002. The fact however remains that the Transfer Pricing Officer’s (TPO’s) order herein dt.30-09-2016 in para 7.5 page 4 has proposed impugned adjustment as per the assessee’s service agreements with its Associated Enterprise (AE) only stipulating thirty days credit period from the date of invoice. It is therefore clear that the learned lower authorities have adopted the assessee’s AE’s only as a benchmarking comparable(s) which is not sustainable in law as per Tehnimont ICB Pvt. Ltd. Vs. Addl.CIT (2012) 138 ITD 33 (Mum) (TM) and Sabic Innovative Plastics India Pvt. Ltd. Vs. DCIT (2013) 59 SOT 138 (Ahd) holding that such an arrangement lacks uncontrolled transaction. We therefore direct the Assessing Officer to delete the impugned ALP adjustment of Rs.16,82,292/- for this precise reason alone. All other arguments on merits are rendered infructuous.
This assessee’s appeal is allowed in above terms.