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Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI
Before: SHRI PRAKASH CHAND YADAV & SHRI MANISH AGARWAL
(ASSESSMENT YEAR: 2020-21) Assistant/Deputy Calsonic KanseiMotherson Auto Commissioner of Income Products Private Limited, Vs. Tax, New Delhi. F-7, Block B-1, 2nd Floor, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi-110044, India. PAN-AADCC1932F (Appellant) (Respondent) Assessee by Shri K.M. Gupta, Adv. & Ms. Shruti Khimta, AR& Ms. Kashish Gupta, CA Department by Shri S. K. Jadhav, CIT-DR Date of Hearing 22/07/2025 Date of Pronouncement 31/07/2025 ORDER
PER PRAKASH CHAND YADAV, JM:
1. The present appeal of the assessee is arising out from the order of Ld. Assessing Officer date13th July, 2024 having DIN No. ITBA/AST/S/143(3)/2024-25/1067139099(1) and relates to Assessment Year 2020-21.
Brief facts of the case as coming out form the orders of authorities below are that assessee is a company and engaged in the manufacturing of compressor and HVAC requirements of customers in India with technological back up from CKC Japan. The company is manufacturing a wide range of modules such as HAVC Systems for controlling and regulating temperature for the impugned assessment year. It has filed its return of income on 21st January, 2021 declaring total income of Rs.37,44,93,220/-. Thereafter, the Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT assessee filed revised return declaring the same income as was declared originally. Thereafter, the case of the assessee was selected for scrutiny. As the instant case was having international transactions with its AE. The Assessing Officer made a reference to the TPO in accordance with TP provisions. Thereafter, the Ld. TPO computed the Arm’s Length Price (ALP) o the international transactions entered into by the assessee. After the receipt of TPO order, the Ld. Assessing Officer framed the draft assessment order against which the assessee filed objections before the DRP and the Ld. DRP vide its order dated 25th June 2024 restored the issue of computation of ALP to the file of TPO with certain directions. Thereafter, the Ld. TPO while giving effect to the directions of Ld. DRP passed a fresh TP order on 28th July, 2024. However, the Ld. TPO has reiterated the same order, thereafter, the Assessing Officer framed the final assessment order, which is impugned before us.
3. The assessee has raised the following grounds of appeal:
1. On the facts and circumstances of the case and in law, the impugned final assessment order dated July 30, 2024 framed by the Ld. AO is bad in law and barred by limitation. Transfer Pricing Grounds Manufacturing and related services
2. On the facts and circumstances of the case and in law, the Ld. AO grossly erred in confirming the Transfer Pricing addition of INR 2,68,44.735 to the income of the Appellant proposed by the Ld. TPO, pertaining to manufacturing and related services rendered to its Associated Enterprises (AES), does not satisfy the arm's length principle under the Income Tax Act, 1961 ('the Act'). In doing so, the Hon'ble DRP/Ld. AO grossly erred in upholding the Id. TPO's action of: 2.1. not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Act read with the Income Tax Rules, 1962 ("the Rules") and modified the economic analysis undertaken by the Appellant for the determination of the ALP of impugned transaction and holding that they are not at arm's length; 2.2. applying additional filters in order to determine the companies comparable to the Appellant in spite of the fact that such additional filters are inappropriate and should not be applied for selecting the comparable companies; 2.3. rejecting the comparables identified by the Appellant in its TP documentation for benchmarking its international transactions, without providing any cogent Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT reasons for the same which are comparable to the Appellant in terms of functions performed, assets employed, and risks assumed; 2.4. including companies in the final set that are not comparable to the Appellant in terms of functions performed, assets employed, and risks assumed; 2.5. not providing the search strategy of the fresh benchmarking as conducted by the Ld. TPO and cherry-picking high profit making comparables; 2.6. rejecting the Appellant's claim for adjustment on account of difference in working capital employed by the Assessee vis-a-vis the comparable companies; 2.7. arbitrarily excluding "Other income in operating revenue for the purpose of making TP adjustment of Rs. 4,66,30,609; 2.8. Computing the value of international transactions with AEs at INR 31,01,23,499 as against INR 30,79,57,418 while making a TP adjustment to manufacturing and related services provided by the Appellant to its AES, Intra-group services 3. On the facts and in the circumstances of the case and in law, the Ld. AO/TPO/DRP erred in proposing an adjustment to the transfer price of the Appellant in respect of the payment of Technical Assistance fee of INR 26,18,009 to AE, holding that by holding that it does not satisfy the arm's length price ('ALP') envisaged under the Act and in doing so have grossly erred in: 3.1. Rejecting of the Transfer pricing study and comparability analysis maintained by the Appellant without providing any cogent reason to disregard the Appellant's approach; 3.2. Inappropriately questioning the commercial wisdom of the Appellant for payment towards availing these services, thereby ignoring the principal that it is not the domain of learned TPO to question the rendition of service and benefit arising therefrom; 3.3. Not appreciating the evidence placed on record and concluding that the evidence does not demonstrate the rendition of service and benefit derived; 3.4. Determining arm's length price of international transaction of payment for technical assistance fee as 'NIL' by applying Other Method, even though the Ld. AO/TPO/DRP considered the value of the aforesaid transaction while making adjustment to the value of international transactions for benchmarking the management and related services fee. This results in double disallowance of the same transaction. Interest on outstanding receivables 4. On the facts and circumstances of the case and in law, the Ld. AO/TPO/DRP erred in making a TP adjustment amounting to INR 27,40,528 on account of outstanding receivables by: 4.1. treating outstanding receivables from AEs as a separate international transaction and re-characterizing outstanding receivables from AEs as a loan advanced to AEs; 4.2. Applying ad-hoc credit period of 60 days for computing interest on outstanding receivables without taking into consideration the actual payment terms of the invoices/purchase orders; 4.3. without prejudice to the above, disregarding that outstanding payables to AEs should be taken into consideration while computing the interest income of receivables.
On the facts and circumstances of the case & in law, the Ld. A.O./DRP grossly erred in initiating penalty proceedings under section 270A of the Act. The Appellant craves leave to add, alter, amend, modify, or withdraw all or any of the aforesaid grounds of appeal
as may be considered necessary at any time before or at the time of hearing of the appeal. The above grounds are without prejudice to each another.”
4. With respect to ground No.2 to 2.6, Counsel for the assessee contended that the Ld. TPO has chosen certain comparables which are not similar to the profile of the assessee company. Counsel for the assessee in nutshell argued that the TPO has failed to apply FAR test, while selecting the comparables for determining the ALP of the international transaction. Drawing attention of the Bench towards the set off final comparables, Ld. Counsel for the assessee pointed out that the assessee wish to include certain comparables and as exclude certain comparables from the final list of the comparables.
5. The Ld. DR appearing on behalf of the Revenue relied upon the orders of authorities below.
:-Finding of the Bench :- 6. We have heard the rival submissions and perused the materials available on record. We hereby observe that the assessee has duly submitted the FAR test analysis before the Ld. TPO. However, Ld. TPO discarded the analysis without any cogent reason.
In our view the following comparables given by the assessee are functionally similar to the assessee and has been accepted by the TPO in previous or subsequent years. For the sake of convenience, we would like to reproduce the chart given by the assessee hereunder.
Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT Sr. No. Company Name Appellant’s Contentions 1. Gajjar Compressors Functionally comparable- Private Limited GajjarComressors Private Limited is Refer DRP Directions Page engaged in manufacturing and supply of No.48 of the Appeal Set) high-performance Air Compressor, Screw Air Compressor, Oil Free Dental (refer DRP submission Compressor, Single and Two Stage Dry Page No. 89 to 93 of the Vacuum Pump, Air Dryer and Air Appeal Set) Receiver Tank (non-core auto parts) on (refer TP order Page No. par with global standards under the 190 of the Appeal Set) brand name, Air marshal. (Refer page No. 223-226 of the Paper book) The Appellant is involved in the manufacturing of non-core auto parts such as HVAC Systems for controlling and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 2 of ARC) 2. Passes all other relevant filter applied by the Ld. TPO.
3. Accepted as a comparable by Ld. TPO for AY 2018-19. Swan Pneumatics Pvt. Ltd.
1. Functionally comparable -Swam (refer DRP Directions Page Pneumatics is engaged in manufacturing No. 48 of the Appeal Set) and sale of air compressors, centrifugal fans & blowers, mechanical vacuum (refer DRP submission boosters, dry screw vacuum pumps, Page No. 93 to 96 of the liquid ring vacuum pumps, vacuum Appeal Set) system and packages and condenser exhausters which are non-core auto (refer TP order Page No. products. The Appellant is also involved 190-191 of the Appeal Set) in the manufacturing of non-core auto parts such as HVAC Systems for (refer Page No. 226-229 of controlling and regulating temperature, the Paperbook) Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 5 of ARC) 2. Passes all other relevant filter applied by the Id. TPO 3. Accepted as a comparable by Li. TPO for AY 2018-19
3. Advance Cooling Systems 1. Functionally comparable: Advance Private Limited ("Advance Cooling Systems Private Limited is Cooling) engaged in manufacturing of panel air conditioner, compressed air dryer, (refer DRP Directions Page chilllers, air to air heat exchanger etc.
Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT No. 48-49 of the Appeal and the Appellant is involved in the Set) manufacturing of non-core auto parts such as HVAC Systems for controlling (refer DRP submission and regulating temperature, Engine Page No. 96 to 100 of the Cooling Module, Exhaust System. Appeal Set) Hence, the company is functionally comparable to the Appellant. (refer Page (refer TP order Page No. No. 8 of ARC) 191 of the Appeal Set) 2. Passes all other relevant filter applied (refer Page No. 229-231 of by the Ld. TPO. the Paperbook. 4 Emerson Climate 1. Functionally comparable: Emerson Technologies (India) Climate Technologies (India) Limited is Limited Emerson Climate") engaged in manufacturing and trading of hermetically sealed compressor which (refer DRP Directions Page are used in HVAC systems, refrigeration No. 49 of the Appeal Set) units, and heat pumps while the Appellant is involved in the (refer DRP submission manufacturing of non-core auto parts Page No. 100 to 103 of the such as HVAC Systems for controlling Appeal Set) and regulating temperature, Engine Cooling Module, Exhaust System. (refer TP order Page Hence, the company is functionally No.191 of the Appeal Set) comparable to the Appellant. (refer Page No. 11 of ARC) (refer Page No.232-234 of 2. Passes all other relevant filter applied the Paperbook) by the Ld. TΡΟ.
3. Accepted as a comparable by Ld. TPO for AY 2018-19 5 Frick India Limited (“Frick 1. Functionally comparable: India”) Frick India Limited is engaged (refer DRP Directions Page in manufacturing of No.49 of the Appeal set) compressors, condensers, heat exchange and pressure vessels, packaged chillers etc .which are non-core auto products while the Appellant is involved in the manufacturing of non-core auto parts such as HVAC Systems for controlling and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 16-17 of ARC) 2. Accepted by Ld. TPO in Appellant’s own case of AY 2021-22.
3. Passes all other relevant filter Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT applied by the Ld.TPO. 6 NHK Spring India Ltd.
Functionally comparable: NHK (“NHK Spring) Spring is engaged in the manufacturing of coil spring, leaf spring, stabilizer bar NHK Spring India Ltd and seats for motor vehicles. (refer Page ("NHK Spring") No. 20-21 of ARC).
2. Accepted by Ld. TPO in Appellant’s (refer remand report at own case of AY 2021-22. Page No. 407 paperbook) 3. Passes all other relevant filter applied 408 of the by the Ld. TPO (refer additional grounds- filed before Ld. DRP at Page 3 No. 349 351 of the Paperbook)
7. Action Springs (India) 1. Functionally comparable: Action Private Ltd. (“Action Springs is engaged in in the business of Springs”) manufacturers, assemblers and (refer remand report at distributors of laminated leaf springs, U- Page No.408-409 of the bolts, pins, shackles, automobile parts & paper book) cast-iron products, steel products, electrical equipment and other articles (refer additional grounds used in the manufacture, assembling, filed before Ld. DRP at maintenance and working of the Page No.351-353 of the automobile vehicles which are non-core Paperbook) auto products. The Appellant is involved in the manufacturing of non-core auto parts such as HVAC Systems for controlling and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 24 of ARC) 2. Accepted by Ld. TPO in Appellant’s own case of AY 2021-22. 3. Passes all other relevant filter applied by the Ld. TPO
8. Ankit Air Systems Private 1. Functionally comparable: Auto Pins Limited India is engaged in the manufacturing (refer remand report at loose leaf springs-iron and steel used in Page No.410 of the automobiles which are non-core auto paperbook) parts. The Appellant is involved in the manufacturing of non-core auto parts (refer additional grounds such as HVAC Systems for controlling field before Ld. DRP at and regulating temperature, Engine Page No.353-355 of the Cooling Module, Exhaust System. Paperbook) Hence, the company is functionally comparable to the Appellant. (refer Page No. 31 of ARC)
Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT 2. Accepted by Id. TPO in Appellant's own case of AY 2021-22 3. Passes all other relevant filter applied by the Ld. ΤΡΟ 9. Auto Pins India Ltd. (“Auto 1. Functionally comparable: Mahabal Pins India”) Auto is engaged in manufacturing of (refer remand report at balancer shaft, differential spider, shifter Page No.409-410 of the finger, stub axle-LH, front axle assembly Paperbook) with brake, etc. for automobiles and sleeve, traction clutch, piston, brake (S- (refer additional grounds axle) piston, suffix-coupling, splined filed before Ld. DRP at coupling, shaft, PTO-connecting, etc. for Page No.358-361 of the tractors. The Appellant is involved in the Paperbook) manufacturing of non-core auto parts such as HVAC Systems for controlling and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 34 of ARC) 2. Accepted by Ld. TPO in Appellant’s own case of AY 2021-22.
Passes all other relevant filter applied by the Ld. TPO.
10. Mahabal Auto Ancillaries 1. Functionally comparable: Mahabal Pvt. Ltd. (“Mahabal Auto”) Auto is engaged in manufacturing of (refer remand report at balancer shaft, differential spider, shifter Page No.409-410 of the finger, stub axle-LH, front axle assembly paperbook. with brake, etc. for automobiles and (refer additional grounds sleeve, traction clutch, piston, brake (S- fled before Ld. DRP at Page axle) piston, suffix-coupling, splined No.358-361 of the coupling, shaft, PTO-connecting, etc. for Paperbook) tractors. The Appellant is involved in the manufacturing of non-core auto parts such as HVAC Systems for controlling and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 34 of ARC) 2. Accepted by Ld. TPO in Appellant's own case of AY 2021-22 3. Passes all other relevant filter applied by the Ld. TPΟ.
Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT 11. Musashi Auto Parts India 1. Functionally comparable: The Private Limited Company is involved in the manufacture (refer remand report at of automotive components like Page No.409 of the transmission gears, shafts, etc. for two paperbook) wheelers and four-wheeler vehicles. The (refer additional grounds Appellant is involved in the filed before Ld. DRP at manufacturing of non-core auto parts Page No.361-363 of the such as HVAC Systems for controlling Paperbook. and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 38 of ARC) 2. Accepted by Ld. TPO in Appellant's own case of AY 2021-22 3. Passes all other relevant filter applied by the Ld. TPO 12. Dynamic Transmission 1. Functionally comparable: Dynamic Limited (“Dynamic Transmission is engaged in the business Transmission”) of manufacturing of high-quality (refer remand report at automobile parts like Transmission Page No.408 of the components, steering components, paperbook) engine & drive components, suspension (refer additional grounds components, aluminium PDC, hot & filed before Ld. DRP at cold forging, oil pump assemblies and Page No.363-365 of the precision turned components. The Paperbook. Appellant is involved in the manufacturing of non-core auto parts such as HVAC Systems for controlling and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 40-42 of ARC) 2. Accepted by Ld. TPO in Appellant's own case of AY 2021-22 3. Passes all other relevant filter applied by the Ld. TPΟ 13. Kalyani Forge Limited 1. Functionally comparable: Forge is (“Kalyani Forge”) engaged in the manufacturing of engine (refer remand report at parts, chassis system parts, turbo Page No.410 of the charger parts, transmission parts, front paperbook) and rear axle parts and steering & (refer additional grounds suspension parts etc. The company is filed before Ld. DRP at also engaged in manufacturing Page No.365-367 of the additional products such as clutch Paperbook. parts, connecting rods and suspension parts. The Appellant is involved in the manufacturing of non-core auto parts such as HVAC Systems for controlling Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT and regulating temperature, Engine Cooling Module, Exhaust System. Hence, the company is functionally comparable to the Appellant. (refer Page No. 43-48 of ARC) 2. Accepted by Ld. TPO in Appellant's own case of AY 2021-22 3. Passes all other relevant filter applied by the Ld. TPO B. Application of TNMM does not require product comparability 7.1 From perusal of the above chart it would be seen that comparable Gajjar Compressors Private Limited is functionally similar to that of the assessee and the same has been accepted by the TPO in Assessment Year 2018-19. Therefore, we direct the TPO to include this comparable in the list of final set off comparables.
Similarly, Swan Pneumatics Pvt. Ltd. is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2018-19, therefore, we direct the TPO to include this comparable in the final set off comparables.
Similarly, Emerson Climate Technologies (India) (“Emersion Climate”) is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2018-19, therefore, we direct the TPO to include this comparable in the final set off comparabels.
Similarly, Frick India Limited (“Frick India) is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2018- 19, therefore we direct the TPO to include this comparables in the final set off comparables.
NHK Spring India Ltd. is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2021-22. This comparable Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT has been put-forth before the DRP for the first time by the assessee and DRP has also sought remand report from the AO.
Ankit Air Systems Private Limited is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2021-22. This comparables has been put-forth before the DRP for the first time by the assessee and DRP has also sought remand report from the AO.
Mahabal Auto Ancillaries is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2021-22. This comparables has been put-forth before the DRP for the first time by the assessee and DRP has also sought remand report from the AO.
Dynamic Transmission Limited (“Dynamic Transmission”) is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2021-22. This comparables has been put-forth before the DRP for the first time by the assessee and DRP has also sought remand report from the AO.
Kalyani Forge Limited (“Kalyani Forge”) is also functionally similar to that of assessee and has been accepted by the TPO in Assessment Year 2021-22. This comparables has been put-forth before the DRP for the first time by the assessee and DRP has also sought remand report from the AO.
Similarly, we observe that so far as exclusion of certain comparables from the list of final set off of comparable is concern, the following comparables are not to be included in the final list of comparables: (a) Banco Products (India) Ltd. Segmental information with respect to the products is not sought for Financial Year 2019-20. (b) PPAP Automotive Ltd. (“PPAP”), it is observed that huge intangible are there with this company and the segmental activity of the company is R&D, therefore, it is not at all comparable with the assessee. We Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT accordingly direct the TPO to exclude from the list of final set off comparables. (c) Samsera Engineering Ltd. (“Sansera”) with respect to this comparable, we observe that this comparable company is receiving Government grants and the assessee before us is not receiving any Government grant, therefore cannot be treated as similar to the assessee. Hence, we direct the TPO to exclude this comparables also from the list of final set off comparables.
So far as AdvikHI-Tech Private Ltd., we do not find any force in the argument of the assessee for exclusion of this comparable from the list of final set off comparables, therefore, the action of the TPO is justifiable.
In view of the above observations, we direct the TPO to determine the arm’s length price of the impugned international transactions after taking into consideration the above set off comparables and then conduct the TP study in accordance with law.
In ground No.2.7, the assessee has challenged the action of TPO vis-à-vis exclusion of “other income”. From the ambit of operative revenue, counsel for the assessee contended that the TPO has excluded three items from the ambit of “other income” namely: (i) Foreign exchange difference to the tune of Rs.72.25,417/- (ii) Duty drawback Rs.45.17.852/- (iii) Compensation obsolete items Rs.3,44,48,765/- 20. Counsel for the assessee contended that so far as foreign exchange gain is concern the same has been arisen on account of revenue receivables from the foreign parties and hence, it forms part of the revenue receipts. Counsel for the assessee placed reliance on the judgments of the Hon’ble Delhi High Court in the case of PCIT vs. B.C. Management Services (P.) Ltd. [IT Appeal No.1064 & 1083 of 2017] held that foreign exchange gain/loss cannot be termed as Non-operating items. Similarly, for Duty Drawback of compensation of obsolete Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT items, Counsel of the assessee reiterated the arguments made before the lower authorities.
Ld. DRP relied upon the orders of DRP and TPO.
After considering the rival submissions, we observe that issue of inclusion of foreign exchange gain in operating margin is no more res-intigra, it has now been settled by the Hon’ble Delhi High Court in the case of PCIT vs. B.C. Management Services (P.) Ltd. [IT Appeal No.1064 & 1083 of 2017]. Respectfully following the same, we direct the TPO to consider this gain as part of operative Revenue. Similarly, we direct the TPO to examine the inclusion of Duty Draw back and compensation from obsolete items to be part of operating revenue and then examine the issue in accordance with provisions of Rule 10TA (k) (vii).
In ground No.2.8, the assessee has contended that the TPO has wrongly taken figure of international transaction as at Rs.31,01,23,499/-. In place of the correct figure of Rs.30,79,57,418/-. We direct the TPO to consider the figure of Rs.30,79,57,418/- as the figure of international transaction of the assessee with its AE.
In ground No.3, assessee has challenged the addition of Rs.26,18,009/- facts related to this issue are that the assessee has made certain payments on account of technical assistance received from the AE. It is the contention of the assessee that total turnover of the assessee is around 4.77 Cr. and the amount of technical fees paid within Infra Group is Rs.26.18 lac only, which is very meniscal when compared with the turnover of the assessee company.
Ld. DR relied upon the orders of authorities below.
We have heard the rival submissions and perused the materials available on record. We observed that voluminous evidences filed by the assessee, in order to prove the rendition of services by the AE. We also appreciate the fact that when payment of technical fee is compared with the turnover of the assessee then these payments are justifiable as made by the assessee.
Calsonic Kensei Motherson Auto Products Pvt. Ltd. vs. DCIT Considering the facts and circumstances of the case, we allow this ground of the assessee.
Before parting, we would like to observe that now there is no need to demonstrate the need/ benefitsripen from any services. In simple word, it is not necessary that by incurring any expenditure, assessee must receive a benefit as held by Delhi High Court in CIT vs. EKL Appliances Ltd.
In ground No.4, the assessee has challenged the addition of Rs.27,40,528/- made by the AO on account of interest on delayed receivable. With respect to this ground, the Counsel for the assessee at the outset prayed that LIBOR + 200 basis point as applicable rate with a credit period of 60 days may kindly be applied. Counsel for the assessee also prayed that set off adjustment of receivables cleared by the AEs before 60 days may also be examined and the net result would have to be taken into consideration for the purposes of levying interest rate of LIBOR +200 basis point.
Ld. DR relied upon the orders of authorities below.
We have heard the rival submissions and perused the materials available on record. We direct the TPO to apply the LIBOR +200 basis point with a credit period of 60 days to the assessee. The TPO will also provide benefit of those sums which the assessee has received from its AE before the expiry of 60 days. With these directions, this issue is restored to the file of AO.