“interest on outstanding receivables”

Transfer PricingSection 92BSection 92B244 judgments

The decision most relied on for interest on outstanding receivables is CIT v. EKL Appliances Ltd. (345 ITR 241), cited in 422 judgments on BharatTax.

Leading authorities on interest on outstanding receivables

CIT v. EKL Appliances Ltd.

345 ITR 241 · 2012 · High Court

422

citing judgments

Transfer pricing adjustments for outstanding receivables are permissible only if the Tax Officer establishes, through analysis over a period, a pattern indicating an international transaction intended to benefit an associated enterprise. The Tax Officer cannot question purely business decisions like royalty payments or exceed jurisdiction by applying cost-benefit analysis to determine the arm's length price of services.

CIT v. Cotton Naturals (I) (P.) Ltd.

55 Taxmann.com 523 · 2015 · High Court

273

citing judgments

The interest rate for benchmarking foreign currency loans advanced to Associated Enterprises should be the market-determined rate applicable to the currency of the loan, such as LIBOR for US Dollar loans, rather than a domestic lending rate like the Indian PLR.

Pr. CIT v. Kusum Health Care Pvt. Ltd.

398 ITR 66 · 2017 · High Court

100

citing judgments

Not every item of receivables appearing in the accounts of an entity dealing with foreign associated enterprises automatically constitutes an international transaction under Section 92B. A separate adjustment for interest on outstanding receivables is not permissible if the working capital adjustment has already factored in their impact.

CIT v. Patni Computer Systems Ltd.

215 Taxmann 108 · 2013 · High Court

citing judgments

The provision of an extended credit period or non-charging of interest on delayed receivables from associated enterprises constitutes an international transaction under Section 92B(1) and requires separate benchmarking at arm's length, even retrospectively due to the Finance Act, 2012 amendment.

Avenue Asia Advisors Pvt. Ltd. v. DCIT

398 ITR 120 · 2017 · High Court

citing judgments

The Delhi High Court holds that a detailed functional and working capital analysis, considering various factors, is essential before treating outstanding receivables as a separate international transaction for transfer pricing adjustments on notional interest. Simply making an adjustment based on receivables alone without such study distorts the transaction's character.

348 (Mum.); Tata Autocomp Systems Ltd. v. Asstt. CIT

21 Taxmann.com 6 · 2012 · ITAT

citing judgments

The use of LIBOR is upheld for benchmarking loans or advances given to foreign Associated Enterprises (AEs), and notional interest is to be computed using LIBOR rates for transfer pricing adjustments on amounts receivable from AEs.

Kusum Healthcare (P.) Ltd. v. Asstt. CIT

62 Taxmann.com 79 · 2015 · High Court

citing judgments

Interest cannot be separately charged on outstanding receivables from an associated enterprise if these receivables are an integral part of the underlying international transaction for which the arm's length price has already been determined. Such outstanding receivables are not considered a distinct international transaction.

CIT v. Indo American Jewellery Ltd.

44 Taxmann.com 310 · 2014 · High Court

citing judgments

A transfer pricing adjustment for notional interest on delayed receivables from an Associated Enterprise (AE) may not be warranted if the assessee consistently does not charge interest from both AEs and non-AEs.

Judgments citing interest on outstanding receivables

Future First Info Services Private Ltd., Delhi vs. AO Circle-7(1), Delhi

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

ITA 672/DEL/2022[2017-18]Status: DisposedITAT Delhi29 Aug 2025AY 2017-18

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishra

Section 143(3)Section 270ASection 92D

appellant assessee, a captive service provider deriving exclusive profit from export. Hence, it was not a suitable comparable. 6.3 On the issue of interest on outstanding receivables, the Ld. AR submitted that the appellant assessee had not have any debt. Adjustments made on this score in preceding years had been ... interest of about INR 5 Lakhs. Hence, the facts of this case were different and thus, the appellant assessee was required to charge interest on outstanding receivables as per provisions of section 92F(v) of the Act read with Rule10B(2)(c) of the Income Tax Rules. He, emphasizing

Garware Fulflex India Pvt Ltd, Mumbai vs. DCIT, Circle 1(1)(1), Mumbai

In the result, appeal of the assessee is partly allowed for

ITA 6751/MUM/2024[2021-22]Status: DisposedITAT Mumbai28 Aug 2025AY 2021-22

Bench: Smt. Beena Pillai () & Shri Om Prakash Kant ()

Section 143(3)Section 144C(13)Section 153

receivables at ₹60,00,261/-. 5.3 The learned Dispute Resolution Panel (“Ld. DRP”) upheld the action of the Ld. TPO in treating the interest on outstanding receivables as a separate international transaction within the meaning of section 92B of the Income-tax Act, 1961 (“the Act"). In doing ... days. Thus contentions of the assessee are accordingly rejected. 7.8 The assessee failed to substantiate that the working capital adjusted margins subsume any interest on outstanding receivables. When the assessee itself has not computed such comparison of the working capital adjusted margin of the tested party with the comparables

Rolta India Ltd. Through Dr. Mamta Binani, Rp., Mumbai vs. Dy.Commissioner of Income Tax Central Circle -1(1), Mumbai

In the result, appeal of the assessee in ITA No

ITA 3563/MUM/2024[2020-21]Status: DisposedITAT Mumbai25 Aug 2025AY 2020-21

Bench: Shri Amit Shukla & Shri Arun Khodpiaआयकर अपील सं. / Ita No.3563/Mum/2024 "नधा"रण वष" / Assessment Year :2020-21 Rolta India Ltd. Through Dr. Mamta Binani, Rp. Rolta Tower-A, Rolta Technology Park, 22Nd Street, Midc, Marol Andheri (East), Mumbai-400 093 Pan: Aaacr2711G ........अपीलाथ" / Appellant बनाम / V/S. The Deputy Commissioner Of Income Tax, Central Circle-1(1), Mumbai ……""यथ" / Respondent आयकर अपील सं. / Ita No.2737/Mum/2023 "नधा"रण वष" / Assessment Year :2018-19 Rolta India Ltd. Through Dr. Mamta Binani, Irp. Rolta Tower-A, Rolta Technology Park, 22Nd Street, Midc, Marol Andheri (East), Mumbai-400 093 Pan: Aaacr2711G ........अपीलाथ" / Appellant M/S. Rolta India Ltd. बनाम / V/S. The Deputy Commissioner Of Income Tax, Central Circle-1(1), Mumbai ……""यथ" / Respondent

For Appellant: Shri Shekhar Gupta, CAFor Respondent: Shri Pankaj Kumar, CIT-DR

Section 143(3)Section 144C(13)Section 144C(5)Section 37(1)Section 92C

very outset, the Ld. Counsel for the assessee as regards the Grounds of Appeal Nos. 1 & 3 regarding benchmarking of interest on outstanding receivables from AE’s, submitted that the assessee had granted loan to the subsidiary companies (AE’s) out of the commercial expediency as the subsidiary company sells

Rolta India Ltd, Mumbai vs. DCIT, Central Circle-1(1), Mumbai

In the result, appeal of the assessee in ITA No

ITA 2737/MUM/2023[2018-19]Status: DisposedITAT Mumbai25 Aug 2025AY 2018-19

For Appellant: Shri Shekhar Gupta, CAFor Respondent: Shri Pankaj Kumar, CIT-DR

Section 143(3)Section 144C(13)Section 144C(5)Section 37(1)Section 92C

Adp Private Limited, Hyderabad vs. DCIT., Circle 1(1), Hyderabad

In the result, appeal of the Assessee is partly allowed

ITA 975/HYD/2024[2020-21]Status: DisposedITAT Hyderabad22 Aug 2025AY 2020-21

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA, Sriram SeshadriFor Respondent: MS. U Mini Chandran, CIT-DR

Section 143(3)Section 144C(1)Section 144C(5)Section 153Section 195Section 234ASection 40Section 92C

assessee’s appeal is upward adjustment towards notional interest on overdue receivables from AE. The TPO proposed an upward adjustment relating to interest on outstanding receivables amounting to Rs.7,21,921/- on trade receivables from AE on the ground that, receivable from AEs are beyond the credit period 23 ITA.No

Stryker India Private Limited, New Delhi vs. ACIT, Circle-22(2), New Delhi

In the result, the appeal of the assessee is allowed as indicated above

ITA 2449/DEL/2022[2018-19]Status: DisposedITAT Delhi22 Aug 2025AY 2018-19

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwalstryker India Private Limited Assistant Commissioner C-5, Sda Commercial Complex, Of Income Tax, New Delhi-110016. Vs. Circle-22(2), New Delhi. Pan-Aaecs2513F (Appellant) (Respondent)

Section 92C

Similarly, this TPO has made an addition of Rs.68,62,509/- after applying libor +400 bases point viz-a-viz interest on outstanding receivables. After arrival of TPO order, the AO passed the draft assessment order. 3. Against this draft assessment order, the assessee filed objections before ... exclude one comparable out of the list of final set off comparables and the Ld. DRP sustained the other adjustments qua interest on outstanding receivables. Thereafter, the AO passed the final assessment order. 4. Aggrieved with the order of AO, the assessee has come up in appeal and has raised

M/S Geodis Overseas Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

ITA 3195/DEL/2017[2003-04]Status: DisposedITAT Delhi13 Aug 2025AY 2003-04

Bench: Shri S Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Vishal Kalra, Adv. & ShriFor Respondent: Ms. Neeju Gupta, Sr. DR

Section 250Section 92C

further respectfully submitted that the TPO, during the subject assessment year, has not made any adjustment in respect of the transaction pertaining to interest on outstanding receivables, thus, AO cannot make a disallowance in this regard by taking a contrary stand as that taken by the TPO. So, interest amounting

ACIT., Central Circle 1(2), Hyderabad vs. Aurobindo Pharma Limited, Hyderabad

In the result, the appeal of the Revenue is dismissed

ITA 710/HYD/2025[2021-22]Status: DisposedITAT Hyderabad06 Aug 2025AY 2021-22

Bench: Shri Ravish Sood & Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.710/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2021-22) Asst. Commissioner Of Income Tax, M/S. Aurobindo Pharma Ltd., Vs. Central Circle 1(2), Hyderabad. Hyderabad. Pan: Aabca7366H (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri B.G. Reddy, Advocate रधजस् व द्वधरध/Revenue By:: Shri Narendra Kumar Naik, Cit-Dr सुिवधई की तधरीख/Date Of Hearing: 30/07/2025 घोर्णध की तधरीख/Pronouncement: 06/08/2025 आदेश/Order Per Madhusudan Sawdia, A.M.: This Appeal Is Filed By Revenue, Feeling Aggrieved By The Order Passed By The Learned Commissioner Of Income Tax (Appeals), Hyderabad (“Ld. Cit(A)”), Dated 24.02.2025 For The A.Y. 2021-22. 2. The Revenue Has Raised The Following Grounds Of Appeal :

For Appellant: Shri B.G. Reddy, AdvocateFor Respondent: : Shri Narendra Kumar Naik

Section 115JSection 143(2)Section 143(3)

account of interest income short charged/uncharged. It is, therefore, not open for the assessee to agitate this question as to whether the interest on outstanding receivables is an international transaction requiring separate benchmarking time and again. 22. In respect of the credit period, assessee contended before the learned

Calsonic Kansei Motherson Auto Products Private Limited, New Delhi vs. Assistant/Deputy Commissioner of Income Tax, New Delhi

ITA 4500/DEL/2024[2020-21]Status: DisposedITAT Delhi31 Jul 2025AY 2020-21

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwal

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 ... 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

Kohinoor Foods Ltd., Faridabad vs. ACIT, Circle-14(2), New Delhi

In the result, all the appeals of the assessee are allowed as indicated above

ITA 1443/DEL/2023[2014-15]Status: DisposedITAT Delhi31 Jul 2025AY 2014-15

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwal

Section 92B

Officer vide its order dated 9th May, 2019 framed the assessment. The TPO/AO has made adjustment with respect to following item: (a) Notional Interest on outstanding receivables to the tune of Rs.60,53,260/-. (b) Corporate guarantee charges to the tune of Rs.1,09,38,843/-. (c) Notional interest ... raised three basic issues: (a) addition of notional interest in respect of the loans advanced by the assessee to its AE. (b) International interest on outstanding receivables and (c ) Notional commission on corporate guarantee. Kohinoor Foods Ltd. vs. ACIT 6. Ld. Counsel for the assessee appearing on behalf

Kohinoor Foods Ltd., Faridabad vs. DCIT Central Circle-28, New Delhi

In the result, all the appeals of the assessee are allowed as indicated above

ITA 1442/DEL/2023[2012-13]Status: DisposedITAT Delhi31 Jul 2025AY 2012-13

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwal

Section 92B

Kohinoor Foods Ltd, Faridabad vs. ACIT Circle-14(2), New Delhi

In the result, all the appeals of the assessee are allowed as indicated above

ITA 1441/DEL/2023[2016-17]Status: DisposedITAT Delhi31 Jul 2025AY 2016-17

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwal

Section 92B

Acme Cleantech Solutions Private Limited, Gurgaon vs. DCIT, Circle-1(1), New Delhi

In the result, both the appeals of the assessee are partly allowed as indicated above

ITA 508/DEL/2022[2017-18]Status: DisposedITAT Delhi31 Jul 2025AY 2017-18

Bench: SHRI PRAKASH CHAND YADAV (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 36(1)(iii)

Assessing Officer, however, sustained the following disallowances a) Disallowance made under section 36(1)(iii), b) Disallowance of 14A, c) Addition of notional interest on outstanding receivables from AE. 4. Aggrieved with the order of the AO has come up in appeal before us. We are adjudicating Assessment Year ... Year 2018-19. 5. In ground No.1 to 6, the assessee has challenged the addition of Rs.2, 30, 14,135/- on account of interest on outstanding receivables from AEs. Ld. Counsel for the assessee appearing on behalf of the assessee argued following points: (a) that assessee has not charged

Acme Cleantech, Haryana vs. ACIT, Circle-1 (1), New Delhi

In the result, both the appeals of the assessee are partly allowed as indicated above

ITA 2142/DEL/2022[2018-19]Status: DisposedITAT Delhi31 Jul 2025AY 2018-19

Bench: SHRI PRAKASH CHAND YADAV (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 36(1)(iii)

Teejay India Private Limited, Visakhapatnam vs. Deputy Commissioner of Income Tax, Circle-5(1), Visakhapatnam

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

ITA 340/VIZ/2024[2020-21]Status: DisposedITAT Visakhapatnam25 Jul 2025AY 2020-21

Bench: Shri Vijay Pal Rao, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपीलसं./I.T.A.No.340/Viz/2024 (निर्धारण वर्ा/ Assessment Year: 2020-21) & S.A. No. 15/Viz/2025 (निर्धारण वर्ा/ Assessment Year: 2020-21) Teejay India Private Limited, Vs. Deputy Commissioner Of Plot No. 15, Brandix, Apsez, Income Tax, Pudimadaka Road, Atchutapuram Circle-5(1), Mandal, Visakhapatnam-530011. Visakhapatnam. Pan: Aaaco9452H (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

For Appellant: Sri Darpan Kirpalani, AdvocateFor Respondent: Dr. Satyasai Rath, CIT(DR)

Section 142(1)Section 143(2)Section 143(3)Section 144C(5)Section 92C

respect of payment of interest on ECB and Rs. 5,57,443/- on account of imputation of notional interest on outstanding receivables. Further, the Ld. AO and the Ld. DRP erred in disallowing an amount of Rs. 23,47,826/- towards amortization of leasehold rights. Grounds for imputation of notional ... interest on outstanding receivables. 1. On the facts and in the circumstances of the case, the Ld. DRP/AO/TPO erred in : 1.1. Considering overdue receivables from AEs as an international transaction under the provisions of section 92B of the Act. In doing so, the Ld. DRP/AO/TPO erred in imputing an interest

Signode India Limited, Hyderabad vs. ACIT., Circle 3(1), Hyderabad

In the result, appeal of the assessee is partly allowed for statistical

ITA 1376/HYD/2024[2021-22]Status: DisposedITAT Hyderabad25 Jul 2025AY 2021-22

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri H. Srinivasulu, C.AFor Respondent: Dr. Sachin Kumar, SR-DR

Section 143(3)Section 144BSection 144C(13)Section 153Section 92C(3)

facts and circumstances of the case and contrary to law, the addition made by the Ld. AO / Ld. TPO with respect to interest on outstanding receivables is untenable and ought to be deleted since the addition has been made by computing interest on an invoice-to-invoice basis as against ... separate international transaction under section 92B of the Act. The Ld. AR further submitted that the assessee did not charge any interest on outstanding receivables, either from its AEs or from its non-AEs. The Ld. AR invited our attention to the balance sheet of the assessee as on 31st

O.C Tanner India Private Limited, Mumbai vs. DCIT, Circle -2(3)(1), Mumbai

In the result the appeal is, accordingly, he appeal is, accordingly, allowed for statistical allowed for statistical purposes

ITA 5785/MUM/2024[2021-22]Status: DisposedITAT Mumbai24 Jul 2025AY 2021-22

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2021-22 O.C. Tanner India Pvt. Ltd., Dy. Cit, Circle-2(3)(1), No. 2, Lave 7 Tower 2, Phase Ii, 552, 5Th Floor, Aayakar Bhavan, Raiaskaran Techpark Andheri Vs. Maharishi Karve Road, Kurla Road, Andheri East, Mumbai-400020. Sakinaka S.O. Mumbai, Mumbai-400072. Pan No. Aabco 1031 F Appellant Respondent

For Appellant: Mr. Vijay Mehta, CA

Section 144C(13)Section 144C(5)

Tanner India Pvt. Ltd Intra Group Services of Rs.6,80,87,902/ Intra Group Services of Rs.6,80,87,902/- and secondly, secondly, interest on outstanding receivable of Rs.2,97,647/ outstanding receivable of Rs.2,97,647/-. 2. Briefly stated, facts of the Briefly stated, facts of the case ... tran adjudication of the transfer pricing adjustment relating to sfer pricing adjustment relating to intra- group services as well as as well as interest on outstanding receivables interest on outstanding receivables, after duly considering the additional evidence now admitted. The AO duly considering the additional evidence now admitted

Aristocrat Technologies India Private Limited, Noida vs. DCIT, Circle-5(1)(1), Noida

In the result, appeal of the assessee is partly allowed in the terms aforesaid

ITA 3091/DEL/2024[2020-21]Status: DisposedITAT Delhi03 Jul 2025AY 2020-21

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishraआअसं.3091/िद"ी/2024(िन.व. 2020-21) Aristocrat Technologies India P. Ltd., 8Tgh To 10Th Floor, Tower-11A, Plot No. 20 & 21, Candor Techspace, It/Ites Sez Complex, Sector-135, Noida, Up 201304 ...... अपीलाथ"/Appellant Pan: Aahca-9200-G बनाम Vs. Deputy Commissioner Of Income Tax, ..... "ितवादी/Respondent Circle-5(1)(1), Noida, Up Assessee By : Shri Atul Jain, Chartered Accountant Ms. Nishi Bhutani & Ms.Preeti Agnihotri, Chartered Accountants Department By : S/Shri S.K. Jhadav, Cit(Dr) & Rajesh Kumar Dhaneshta, Sr.Dr सुनवाई क" ितिथ/ Date Of Hearing : 04/04/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 03/07/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Assessment Order Dated 27.05.2024 Passed U/S. 143(3) R.W.S. 144C(13) R.W.S 144B Of The Income Tax Act,1961(Hereinafter Referred To As ‘The Act’). 2. The Facts Of The Case In Brief As Emanating From Records Are: The Assessee Is Engaged In Providing Design & Development Services To Its Associated Enterprises (Ae’S). The Assessee Is Also Rendering Global It Services To Its Ae’S

For Appellant: Shri Atul Jain, Chartered AccountantFor Respondent: S/Shri S.K. Jhadav, CIT(DR) & Rajesh Kumar Dhaneshta, Sr.DR

Section 143(3)Section 234BSection 270A

international transaction, the ld. Counsel submits that working capital adjustment takes into account outstanding receivables accordingly no separate adjustment is warranted for imputing interest on outstanding receivables beyond agreed credit period. He further pointed that working capital adjustment has already been allowed by the DRP which was duly given effect ... grant extra credit period to the AE’s. 7. In respect of ground no. 10 of appeal relating to computation of alleged interest on outstanding receivables. The ld. Counsel submits that the TPO has erred in computing interest on outstanding receivables on each invoice ignoring the fact that there were

Vaibhav Global Limited, Jaipur vs. DCIT, CC-4, Jaipur

ITA 1485/JPR/2024[2021-22]Status: DisposedITAT Jaipur30 Jun 2025AY 2021-22

For Appellant: Shri Vinod Kumar Gupta, AdvFor Respondent: Shri Rajesh Ojha, CIT-DR

Section 115JSection 115QSection 143(3)Section 144C(5)Section 36(1)(va)

considering Net Operating Margin (Operating Profit/Operating cost or NCP) as the PLI and instead applied Berry Ratio. III. Addition on account of Notional Interest on outstanding receivables: Adjustment of Rs.96,03,898/-. 1. Under the facts and in law, the Ld. AO and the Ld. TPO erred in making addition ... ITAT. 7. Under the facts and in law, the Ld. TPO has erred in re-calculating the interest on outstanding receivables to Rs.1,09,25,934/-. Further, the Ld. AO erred in confirming the same in the assessment order. The action of the Ld. TPO and Ld. AO is contrary

Vaibhav Global Limited, Jaipur vs. DCIT, CC-4, Jaipur

In the result, the appeal of the assessee in ITA no

ITA 1144/JPR/2024[2020-21]Status: DisposedITAT Jaipur30 Jun 2025AY 2020-21

For Appellant: Shri Vinod Kumar Gupta, AdvFor Respondent: Shri Rajesh Ojha, CIT-DR

Section 115JSection 115QSection 143(3)Section 144C(5)Section 36(1)(va)

considering Net Operating Margin (Operating Profit/Operating cost or NCP) as the PLI and instead applied Berry Ratio. # **III. Addition on account of Notional Interest on outstanding receivables: Adjustment of Rs. 96,03,898/-.** - 1. Under the facts and in law, the Ld. AO and the Ld. TPO erred in making ... ITAT. - 7. Under the facts and in law, the Ld. TPO has erred in re-calculating the interest on outstanding receivables to Rs. 1,09,25,934/-, Further, the Ld. AO erred in confirming the same in the assessment order. The action