“interest on outstanding receivables”

Arm Embedded Technologies Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 1(1)(1), Bengaluru

In the result, appeal of the assessee stands partly allowed

case, the learned Panel and the learned AO erred in making an adjustment of INR 1,954,655 in respect of notional interest on outstanding receivables from associated enterprises (`AEs') to the income of the Appellant by considering overdue receivables from AEs as a separate international transaction under the provisions ... determined. We have perused the submissions advanced by both the sides in the light of the records placed before us. 32.7 Ld.TPO computed interest on outstanding receivables at the rate equal to 4.985% on the receivables that exceeded 6 months. It has been argued by Ld.AR that authorities below disregarded

Atos It Services Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

Bench: Shri George George K. & Ms. Padmavathy S

follows:- Ground 3 – TP adjustment in relation to software development services IT(TP)A No.226/Bang/2021 Page 2 of 25 Ground 4 – Notional interest on outstanding receivables. Ground 5 – Partial denial of claim of depreciation on goodwill. Ground 6 – Denial of deduction of Education Cess and Higher & Secondary Education Cess ... adjustment and re-compute the ALP accordingly. 20. The rest of the grounds raised with regard to TP adjustment are left open. Notional interest on outstanding receivables 21. Ground No.4 raised by the assessee reads as follows:- “4. On the facts and circumstances of the case

M/S Infineon Technologies India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-3(1)(1), Bangalore

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 3355/Bang/2018 Assessment Year : 2014-15 M/S. Infineon Technologies India Pvt. The Deputy Ltd., Commissioner Of 9Th Floor, Prestige Income Tax, Thirulakshmi, Circle – 3(1)(1), No. 11, Mg Road, Vs. Bangalore. Bangalore. Pan: Aabcs6967N Appellant Respondent : Shri K.R. Vasudevan, Assessee By Advocate : Shri Sumer Singh Meena, Revenue By Cit Dr Date Of Hearing : 12-07-2022 Date Of Pronouncement : 25-08-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Assessment Order Dated 26/10/2018 By The Ld.Dcit, Circle – 3(1)(1), Bangalore On Following Grounds Of Appeal: “A. Transfer Pricing The Grounds Mentioned Hereinafter Are Without Prejudice To One Another. 1. The Learned Assessing Officer ('Learned Ao'), Learned Transfer Pricing Officer ('Learned Tpo') & The Honourable Dispute Resolution Panel ('Hon'Ble Drp') Grossly Erred In Adjusting The Transfer Price By Inr 9,56,93,721/- With Respect To The International

comparables for the Marketing support services segment of the Appellant:- a. Concept Communication Ltd. b. Goldmine Advertising Ltd. c. Marketing Consultants & Agencies Ltd. INTEREST ON OUTSTANDING RECEIVABLES 18. The learned AO/ learned TPO/ Hon'ble DRP erred in not considering the fact that receivables cannot be considered as an international ... assessee stands allowed. 18. Ground nos. 18 to 24 – is in respect of interest computed on outstanding receivables. 18.1 The Ld.TPO computed interest on outstanding receivables under weighted average method using 6 months LIBOR + 300 basis points applicable for year under consideration that worked out to 4.3836% on receivables that

Safran Engineering Services India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circe-6(1)(1), Bangalore

In the result, the appeal by the assessee is allowed for statistical purposes

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2017-18

assessee is in appeal before the Tribunal. 4. The assessee has raised 18 grounds with regard to the ALP adjustment in respect of "Interest on Outstanding Receivables". Ground Nos. 1 & 2 are general not warranting separate adjudication. Ground Nos.6 to 10 are not pressed by the ld. AR during

M/S. Xchanging Solutions Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle- 7(1)(2), Bangalore

In the result, the appeal filed by the assessee stands allowed for statistical purposes

Assessee with the AEs. 4.15 The learned DRP/AO/TPO have erred in law and facts by determining a transfer pricing adjustment on account of interest on outstanding receivables amounting to INR 91,45,063. 4.16 The learned DRP/AO/TPO have erred, in law and in facts, by not appreciating that the outstanding

M/S. Meritor C vs. India Private Limited, Bangalore

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

Bench: Shri Chandra Poojari & Smt. Beena Pillai

assessment year 2015-16 dated 24.4.2020, wherein it was observed as under: 17. Ground No.7 alleged by assessee against adjustment of notional interest on outstanding receivables. From TP study, it is observed that payments to assessee are not contingent upon payment received by AEs from their respective customers. Further Ld.AR ... been accounted for. Alternatively, he submitted that working capital subsumes sundry creditors and therefore separate addition is not called for. 17.1. Ld.TPO computed interest on outstanding receivables at the rate equal to 4.3087% on receivables that exceeded 60 days. It has been argued by Ld.AR that authorities below disregarded business/commercial

M/S Quicklogic Software (India) Pvt. Ltd., Bangalore vs. Deputy Commissioner of Income-Tax, Circle-3(1)(1), Bengaluru

In the result, the appeal filed by the assessee stands partly allowed

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 181/Bang/2022 Assessment Year : 2017-18 M/S. Quicklogic Software (India) Pvt. Ltd., No. 10 Brindavan, The Deputy 3Rd Floor, Commissioner Of Yashoda Nagar Main Income Tax, Road, Circle 3(1)(1), Jakkur Plantation, Vs. Bangalore. Bengaluru – 560 064. Pan: Aaacq0656P Appellant Respondent Assessee By : Shri Mahaveer C Jain, Ca : Shri Sumer Singh Meena Cit Revenue By Dr Date Of Hearing : 12-07-2022 Date Of Pronouncement : 27-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 25/01/2022 By The National Faceless Assessment Centre For A.Y. 2017-18 On Following Revised Grounds Of Appeal:

assessee stands partly allowed for statistical purposes. 14. Ground nos. 7-9 is in respect of Working Capital Adjustment. 14.1 The Ld.TPO computed interest on outstanding receivables at the rate equal to 5.975% on receivables that exceeded 90 days as per the directions of the DRP. It has been argued ... section 92 B of the Act. Alternatively, it also argued that in TNMM, working capital adjustment subsumes sundry creditors. In such situation computing interest on outstanding receivables as loans and advances to associated enterprise would amount to double taxation. Hon’ble Delhi Tribunal in case of Orange Business Services India

Altimetrik India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

Bench: Shri George George K. & Ms. Padmavathy S

adjustment in arriving at an arm’s length price. 21. The assessee in ground Nos.3.1 to 3.7 contended that the TP adjustment towards interest on outstanding receivables. The TPO treated the outstanding receivables from AE as in the nature of loan facility given to the AE and imputed interest ... months LIBOR plus 450 basis points which works out to 4.985%. The DRP upheld the decision of the TPO in imputing interest on outstanding receivables. The DRP gave a direction to adopt State Bank of India short term deposit interest rate in recomputing the adjustment. This resulted in enhancement

Cisco Systems Capital (India) Private Limited, Bengaluru vs. Joint Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

In the result, the assessee’s appeal is partly allowed for statistical purposes

Bench: Shri Chandra Poojari & Smt. Beena Pillai

statistical purposes. 8. Ground Nos.18 & 19 of the appeal of the assessee are reproduced as under:- C. Grounds of appeal in relation to interest on outstanding receivables 18. Without prejudice, the learned TPO/ AO has erred. in law and on facts, by determining a transfer pricing adjustment on account ... interest on outstanding receivables, not appreciating the fact that such receivables are arising from rebates and discounts offered by CSI BV and should not be tested separately or re-characterized as a loan transaction. IT(TP)A No.321/Bang/2022 Cisco Systems Capital (India) Private Ltd., Bangalore Page

On Semiconductor Technology India Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, the additional ground raised by the assessee is allowed for statistical purposes

with reference to the provision for SWD to 3 IT(TP)A No.291/Bang/2021. M/s.ON Semiconductor Technology India Pvt.Ltd. its AEs and interest on outstanding receivables are detailed below:- (i) SWD – TP adjustment Rs.4,27,00,084 (ii) Interest on outstanding receivables – TP adjustment Rs.31,98,111 ------------------- Rs.4 ... wrongly computing the operating margins of some of the comparable companies considered in the TP order. 6. Adjustment on account of notional interest on outstanding receivables. 6.1 The ld.AO/TPO/DRP grossly erred in determining a transfer pricing adjustment on account of the interest on outstanding receivables. 6.2 Without prejudice

M/S Subex Limited, Bangalore vs. Income Tax Officer Ward-6(1)(4), Bangalore

In the result, the appeal filed by the assessee stands partly allowed

Bench: Smt. Beena Pillai & Shri. Laxmi Prasad Sahuit(Tp)A No. 107/Bang/2019 Assessment Year : 2014-15 M/S. Subex Ltd., Rmz Ecoworld, The Income Tax Outer Ring Road, Officer, Devarabisanahalli, Ward – 6 (1)(4), Bangalore – 560 103. Bangalore. Vs. Pan: Aabcs9255R Appellant Respondent Assessee By : Shri Ajay Rotti, Ca : Shri Sunil Kumar Singh, Cit- Revenue By Dr Date Of Hearing : 07-06-2022 Date Of Pronouncement : 14-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 26/10/2018 Passed By Ld.Ito, Ward – 6(1)(4), Bangalore For A.Y. 2014-15 On Following Grounds Of Appeal: “The Grounds Stated Hereunder Are Independent Of & Without Prejudice To One Another. The Appellant Submits As Under: 1. Assessment & Reference To Learned Transfer Pricing Officer Are Bad In Law 1.1. The Income Tax Officer. Ward — 6(1)(4), Bangalore (Learned Assessing Officer Or 'Ld. Ao') Erred In Making A Reference To The Deputy Commissioner Of Income-Tax, Transfer Pricing —Range 2(2)(1) (Learned Transfer Pricing Officer' Or 'Ld. Tpo'), Inter Alia, Since He Has Not Recorded

case for A.Y. 2010-11 (supra). 10. Ground no. 6 is in respect of interest on trade receivables. 10.1 The Ld.TPO computed interest on outstanding receivables at the rate equal to 4.3087% on receivables that exceeded 90 days as per the directions of the DRP. It has been argued ... section 92 B of the Act. Alternatively, it also argued that in TNMM, working capital adjustment subsumes sundry creditors. In such situation computing interest on outstanding receivables as loans and advances to associated enterprise would amount to double taxation. Hon’ble Delhi Tribunal in case of Orange Business Services India

M/S. Subex Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bangalore

In the result, the appeal filed by the assessee stands partly allowed

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 2579/Bang/2019 Assessment Year : 2015-16 M/S. Subex Ltd., The Deputy Rmz Ecoworld, Commissioner Of Outer Ring Road, Income Tax, Devarabisanahalli, Circle – 6(1)(2), Bangalore – 560 103. Vs. Bangalore. Pan: Aabcs9255R Appellant Respondent Assessee By : Shri Ajay Rotti, Ca : Shri Sumer Singh Meena, Revenue By Cit-Dr Date Of Hearing : 11-07-2022 Date Of Pronouncement : 11-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 23/10/2019 Passed By Ld.Dcit, Circle – 6(1)(2), Bangalore For A.Y. 2015-16 On Following Grounds Of Appeal: “The Grounds Stated Hereunder Are Independent Of & Without Prejudice To One Another. The Appellant Submits As Under: 1. Erroneous Transfer Pricing Adjustments Arising From Interest On Trade Receivables 1.1. The Deputy Commissioner Of Income Tax, Circle - 6(1)(2), Bangalore (Learned Assessing Officer' Or 'Ld. Ao') / Assistant Commissioner Of Income Tax, Transfer Pricing Circle - 1(3)(1) ('Learned Transfer Pricing Officer' Or 'Ld.

erred in not appreciating that the underlying agreement does not have a clause for interest on outstanding receivable balance and hence no such interest is payable by AEs. The Hon'ble DRP erred in upholding the action of the Ld. AO/ Ld. TPO. 1.4. Without prejudice to above ... section 92 B of the Act. Alternatively, it also argued that in TNMM, working capital adjustment subsumes sundry creditors. In such situation computing interest on outstanding receivables as loans and advances to associated enterprise would amount to double taxation. Hon’ble Delhi Tribunal in case of Orange Business Services India

Ntt Data Information Processing Services Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle - 3(1)(1), Bangalore

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

Bench: Shri Chandra Poojari & Smt. Beena Pillai

adjustments to account for differences in the risk profile of the Assessee vis- à-vis the comparables. 7. Adjustment on account of notional interest on outstanding receivables 7.1. The learned TPO/ AO grossly erred in determining a transfer pricing adjustment on account of the interest on outstanding receivables amounting ... comparables remitted to file of AO/TPO for fresh consideration. 21. Ground No.7 is with regard to not giving adjustment on account of notional interest on outstanding receivables. The grounds raised are reproduced as follows: 7. Adjustment on account of notional interest on outstanding receivables 7.1 The learned TPO/ AO grossly

M/S. Outsourcepartners International Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 5(1)(2), Bangalore

In the result, the appeal by the assessee is partly allowed

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

proceedings. The TPO on a fresh set of comparables chosen made a TP adjustment of Rs.17,28,28,717 and also calculated interest on outstanding receivables at Rs.7,62,860. 8. The assessee raised objections before the DRP. The DRP granted relief to the assessee on exclusion of various comparables ... held as under:- IT(TP)A No.35/Bang/2020 Page 6 of 16 “23. Ground No. 14-17 alleged by assessee against adjustment of notional interest on outstanding receivables. From TP study, it is observed that payments to assessee are not contingent upon payment received by AEs from their respective customers. Further

M/S Altisource Business Solutions Private Limited, Bangalore vs. Income Tax Officer Ward-1(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.3368/Bang/2018 Assessment Year : 2014-15 M/S. Altisource Business Solutions Pvt. Ltd., Vs. Ito, Pritech Park, Block Nok.12, 3Rd Floor, 5Th Ward – 1(1)(1), Floor, B-Wing & 4Th Floor, B-Wing, Bengaluru. Bellandur Village, Bengaluru-560 103. Pan : Aaaco 9467 A Appellant Respondent Assessee By : Smt. Rashmi R, Advocate Revenue By : Shri. V. S. Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 21.06.2022 Date Of Pronouncement : 24.06.2022 O R D E R Per N V Vasudevan

transaction has been tested. 23. The learned AO/ learned TPO/ Hon'ble DRP erred in enhancing the income of the Appellant by imputing interest on outstanding receivables from AEs on ad hoc basis. IT(TP)A No.3368/Bang/2018 Page 3 of 24 24. The learned AO/ learned