PROGRESS SOFTWARE DEVELOPMENT PRIVATE LIMITED,HYDERABAD vs. DCIT, CIRCLE-5(1), HYDERABAD

ITA 276/HYD/2026Status: DisposedITAT Hyderabad16 September 2026AY 2022-2312 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that in the case of a debt-free company, no separate transfer pricing adjustment for notional interest on trade receivables is warranted, following a coordinate bench decision. However, the claim of being debt-free requires factual verification.

What were the facts?

The assessee, a software development company, made a return of income for AY 2022-23. The Assessing Officer, following DRP directions, made a transfer pricing addition of Rs. 1,46,83,001/- on account of interest on trade receivables.

What were the issues?

Whether a transfer pricing adjustment for notional interest on trade receivables is justified for a debt-free company. The need for factual verification of the company's debt-free status.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 143(2),Section 144C(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘B‘ Bench, Hyderabad

Before: Shri Ravish SoodShri Madhusudan Sawdia

Hearing: 07/09/2026

Per Madhusudan Sawdia, A.M.:

This appeal is filed by M/s. Progress Software Development Private Limited (“the assessee”), feeling aggrieved by the assessment order passed by the Assessing Officer under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (“the Act”) for A.Y. 2022-23 dated 18.11.2025 as per the directions of the Learned Dispute Resolution Panel-1 Bengaluru (“Ld. DRP”) dated 29.10.2025. 2. The assessee has raised the following grounds of appeal:

3

3.

The brief facts of the case are that the assessee is

The order continues below.

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