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2. The Ld. AO/ Transfer Pricing Officer ("Ld. TPO"), erred both on facts and in law in enhancing the income of the Appellant by INR 19,221,882 on account of interest chargeable on receivables outstanding during the year and in doing so have grossly erred by:

2.1. not appreciating the overall arrangement/commercial considerations of the Assessee with its Associated Enterprises ("AEs") and re-

characterizing the outstanding receivables from overseas AEs as unsecured loans advanced to the AEs and imputing interest at the rate equal to LIBOR plus 400 basis points;

2.6. ignoring the Assessee's contention, without prejudice to other contentions, that if at all interest is to be imputed, instead of an ad-hoc rate of LIBOR plus 400 basis points, the LIBOR rate alone for the FY 2012- 13 should be applied for imputing interest;

3. The Ld. AO/ Ld. TPO has grossly erred on facts and in law by disregarding judicial pronouncements in India (including the one passed by the Hon'ble Delhi Bench in Appellant's own case for the AY 2010-11 which is upheld by the Hon'ble Delhi High Court) in undertaking the TP adjustment.

7. The Ld. DR submitted that all the grounds of appeal, taken by the assessee in its appeal, emerge from one fundamental issue as to justification of TP adjustment on account of delayed realization of receivables from AE. The assessee has relied upon the case-laws in its own case [both Tribunal and Hon'ble Delhi High Court] and has urged that the issue is covered. However, the facts in the case of the assessee are analyzed to discern a pattern that would substantiate that the delayed realization of outstanding receivables beyond 180 days, for the supplies made to the AE, is not in accordance with normal trade practices and reflects an arrangement of international transactions which are intended to benefit the AE. The analysis of the facts & figures clearly negates the claim of the assessee that the working capital adjustment takes into account the impact of such delayed realization of outstanding receivables from AE. Further the case of the assessee is squarely covered by a recent decision of ITAT, Delhi in the case of Techbooks International Pvt. Ltd., ITA No.6102/Del/2016, order dt.06.07.2020 wherein the case of the assessee (i.e. Kusum Healthcare) was also considered in addition to some other case-laws. Whether the working capital adjustment factors in the impact of such delayed realization of receivables, has also been analyzed by Tribunal in view of the facts of the case which are identical to the case of the appellant and decided against the assessee. It is also urged before the Bench that res-judicata is not applicable in income-tax proceedings and reliance in this regard is placed on the decision of jurisdictional High Court in the case of Krishak Bharati Cooperative Ltd vs. DCIT [2012] 23 taxmann.com 265 (Delhi) wherein Hon'ble Delhi High Court has held that the rule of consistency should not create anomaly. As regards to Ground Nos. 2.1 & 2.6 relating to application of interest rate @ LIBOR plus 400 bps applied by the TPO/AO and upheld by Ld. DRP, the Ld. DR submitted that necessary discussions have been recorded by the TPO in para-20 at P/13 of his order. The TPO has considered the reply of the appellant and applied the interest rate of LIBOR plus 400 bps keeping in view the currency of payments received, opportunity cost and the discussions & findings of Ld. DRP in AY 2011-12 in the case of the assessee itself. The discussions in the TPO order may kindly be referred to. The DRP have discussed the issue in detail viz. various factors, credit spread demanded by the lenders in similar situations, risks borne by the appellant, opportunity cost, decision of jurisdictional High Court in the case of Cotton Naturals India Pvt. Ltd., ITA No.233/2014 and then have given its findings at P/18-23 of its order upholding the credit spread of 400 bps over LIBOR rate. As regards to GOA 2.2 to 2.5 are interlinked and the Ld. DR submitted that the TPO issued a show-cause dt.05.09.2016, examined the reply of the assessee vis-a-vis the relevant facts and has recorded his elaborate discussions in his order. The TPO has recorded his discussions w.r. to FAR analysis of the assessee at P/2 to 8. The TPO has discussed relevant provisions of Sec. 92CA(2A), 92CA(2B), Explanation (1)(c) to Sec.92B, Sec. 92F(v) and sec. 92B(1) and amendments brought by Finance Act, 2012. Thereafter the TPO has made elaborate discussions on the issues involved in para-15 to 20. The TPO has also discussed various case-laws in his order. The TPO has adopted the segregated approach for benchmarking of outstanding receivables from AE on account of its delayed realisation for the delay beyond the period of 180 days as the assessee itself admitted to have allowed a period of 180 days for realisation of such receivables. Thus it may be noted that for the delay upto the period of 180 days no interest has been imputed by the TPO. The DRP has given its findings at P/ 5-6 on characterization of such receivables & segregated approach by the TPO to arrive at the ALP of such receivables lying unrecovered beyond a period of 180 days and have upheld the action of the TPO. The DRP has considered the issue in detail whether the working capital adjustment takes into account the impact of outstanding receivables in view of the facts of the case, time value of money at P/6-12 and have upheld the action of the TPO in its findings. The DRP have also considered the arguments of the assessee that "since no interest has been charged from non-AE for delayed realisation, no adjustment is warranted for determining the ALP of receivables from AE". The DRP have discussed the issue in greater detail at P/12-18 of its order. The Ld. DR specifically made reference where the discussion of the DRP on this issue was at P/16-17. The DRP have noted that there was categorical mention of charging interest on delayed payments against sale beyond a period stipulated in the agreement with the non-AE and the AE. The assessee took the argument that it did not recover any interest from either parties. The DRP have given its findings that the material factor for scrutiny from transfer pricing angle was not whether the assessee is charging any interest on the overdue outstanding receivables from its AEs or non-AEs or not but actually what should have been time value of money and what price was imputable to the time value of money. The DRP have also discussed relevant case-laws, OECD definitions / guidelines and finally upheld the action of the Assessing Officer. As regards to Ground No. 2.5, the assessee submitted that it is a low debt company and no borrowed funds have been utilized to pass on the credit facility. This issue has also been considered by the DRP at P/18 and have given its findings that in view of their detailed discussions & decisions w.r. to substantive grounds 2.3 & 2.4, the same is only academic and hence infructuous. The facts show that the period of delay of realisation of such outstanding receivables varied from 181 days to 430 days in the case of AE [ at P/14-28 of order of TPO which contains computation of interest ]. The period of delayed realization of recevables and the pattern is in total variance from those in the case of non-AE. It may be noted that a margin period of 180 days, as per agreement and as stated by the assessee, have been considered by the TPO and to be reasonable & fair to the assessee, the interest have been computed for the period beyond 180 days only. Further as directed by the DRP, the interest have been computed in respect of overdue receivables upto 31st March of the FY under consideration. In addition to the discussions by the TPO and the DRP it would be interesting to consider certain crucial facts & figures of the year as well as that of last FY as reflected in the financial statements of the assessee & the annexure filed before Tribunal. The same are reproduced as under:-

Thus, the approach of aggregating the international transactions pertaining to sale of goods of AE's and receivables arising from such transactions which is undoubtedly inextricable and connected is in accordance with establish transfer pricing principals. In 2010-11, the Tribunal considered this aspect and held that the working capital adjustment before levying notional interest on the outstanding receivable and concluded that since the sale price of the goods already factor in the long credit period no adjustment on account of notional interest on outstanding receivables is warranted. As per without prejudice argument of the Ld. AR and from the records it emerges that no interest was charged on the delay in receipt of receivable in respect of the delay in receipt of receivables in the nature of unsecured loan. The interest shall be charged at LIBOR plus rate and not at the prevailing SBI Base rate as per held by the Assessing Officer. In 2011-12, the DRP concluded that since the receivables from AE are in US Dollars, LIBOR plus rate should be applicable in case of the assessee. After considering for all in cost selling, credit rating, security and transactions cost, 400 basis points should be added to LIBOR plus rate of the year. Thus, average 12 months USD Labor for 2012 was 1.013%. Thus, the applicable rate for computing interest on outstanding receivables should be 5.013%. Regarding details of outstanding receivables of AE as on 1/4/2012 along with realization dated for each invoice. Thus, opening outstanding receivables were raised in previous Financial Years. The notional interest on the same, have already been added by respective Transfer Pricing Officers, in the assessment orders of relevant previous years in which such invoices were raised. Further, such interest was computed till the actual period of realization of those invoices, which even extended beyond the respective Financial Year under consideration. We have observed that the submissions of the Ld. DR and the calculations given during the hearing are not tenable as it has not considered the calculations given by the assessee before the TPO/Assessing Officer/DRP. Thus, the calculations given by the Ld. DR at this juncture will not appropriate as the case of the assessee is regarding outstanding receivables and the principal of Techbooks International (supra) will not apply in the present case. In this present assessment, the assessee has given all the details which was reproduced by the Transfer Pricing Officer (TPO) it its order and without discussing calculations and the evidences produced by the assessee, simplicitor made adjustment. There was no contrary facts given by the TPO in consonance with the evidence produced by the assessee before the TPO. The facts of Techbooks International (supra) are totally difference which can be emerged from the para of the said decision where the assessee's case for Assessment Year 2010-11 has been taken into account. Thus, the calculation given by the DR in his submissions is not inconsonance with the actual figures and the calculations considered by the TPO as well as the DRP at the time of assessment proceedings. The facts of the assessee's case are identical in the present year to that of A.Y. 2010-11 which is already decided by the Hon'ble Delhi High Court in assessee's favour. No distinguishing facts were pointed out by the Ld. DR. Hence, Ground Nos. 2, 2.3, 2.4 and 3 are allowed. As regards Ground No. 4, the same is consequential in nature. Thus, appeal of the assessee is partly allowed.