Satyam Venture Engineering Services ... vs Assistant Commissioner Of Income Tax ... on 31 May, 2024
Ltd.
(supra) is also on the same aspect.
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Zeta Interactive Systems (India) ... vs Income Tax Officer, Ward-17(4), ... on 7 June, 2022
Tek Systems Global Services Private ... vs Dcit, Circle-2(1), Hyderbad on 5 July, 2024
33. It was similarly held in BT e-Serv (India) Pvt. Ltd. v. ITO,
Ward- 5(2) 2017(60)|TR(Trib)618(Delhi) as follows: "22...The
argument that assessee is an interest free entity and does
not pay any interest and therefore no interest shall be
imputed in the outstanding invoices is also devoid of merit
because it is not a case of allowance of interest expenditure
Page 24 of 36
ITA No 487 of 2022 TEK Systems Global Services P Ltd
in the hands of the assessee but an "international
transaction' to be benchmarked at arm's length. It is a case
of determination of arm's length price of a transaction.
Undoubtedly the receivable or any other debt arising during
the course of the business is included in the definition of
'capital financing' as an 'international transaction' as per
explanation 2 to section 92B of the Act w.e.f. 01.04.2002
inserted by the Finance Act 2012. Therefore, even the
outstanding receivable partake the character of capital
financing and consequently, overdue outstanding is an
'international transaction', The natural corollary would be of
imputing interest on such 'capital financing', if same is not
charged at arm's length, Therefore, we reject the contention
of the assessee that outstanding receivable is not an
'international transaction' and therefore, hence, according to
us, interest on it requires to be imputed."
M.Bhagya Lakshmi , Kadapa vs Asst. Commissioner Of Income Tax, ... on 16 May, 2023
This view is adopted by the Hon'ble ITAT, Hyderabad in
the case of Vittal Krishna Conjeevaram vs. ITO dt. 10.07.2013 reported
in (2013) 36taxman.com 542 and in the case of Sri Syed Irfan Jaffer, j
Hyderabad Vs. ITO, Ward 6(1), Hyderabad in ITA No.465/Hyd/2013
and also in the case of ACIT vs, Smt. Fazlunnisa Begum reported in ITA
No.66/Hyd/2017.
Satyam Venture Engineering Services ... vs Asst. Commissioner Of Income Tax, ... on 22 September, 2023
6. In respect of the interest on the trade receivables, learned AR
submitted that the assessee is a debt free entity, working capital
adjustment is not given and also that the assessee has not been charging
any interest to non-AEs. He, therefore, submitted that there cannot be any
TP adjustment in respect of the interest on trade receivables. He, however,
fairly submitted that in assessee's own case for the assessment year 2010-
11 this issue came for consideration before the Tribunal in ITA
No.362/Hyd/2021, and by order dated 28/06/2022, a Co-ordinate Bench
of this Tribunal, by following the decision of the Tribunal in the case of Zeta
Interactive Systems (India) Pvt. Ltd., vs. ITO in ITA No.1812/Hyd/2017, had
taken a view that application of 6% interest rate on outstanding
receivables at the yearend is proper.
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