Hyderabad ITAT Dismisses Assessee's MA Qua Interest On Receivables Since Invoice-Wise Details Were Not Filed Earlier

Referring to the decision of Supreme Court in the case of MCorp Global Pvt. Ltd. Vs. CIT [(2009) 309 ITR 434/178 Taxmann 347 (SC)], the Bench comprising R.K. Panda (Vice President) and Laliet Kumar (Accountant Member) observed that “it would appear from order of ITAT that the credit period of only 60 days from the invoice date was allowed for realization from AEs. If the credit period of only 60 days is considered in the present case, it would tantamount to setting aside the directions of DRP as the credit period of 90 days allowed by DRP is already more than 60 days. This leads to a situation where TP adjustment/ income on this ground being enhanced instead of being partly allowed”. (Para 2)

The Bench followed assessee's own case for AY 2018-19 and directed AO to impute notional interest @ 6% on trade receivables beyond credit period of 60 days.

The assessee argued that ITAT may consider: (i) issuing appropriate direction / clarification to the effect that credit period of 60 days mentioned in Tribunal's order is in addition to credit period of 90 days already allowed by DRP, (ii) or in the alternative, dismiss assessee's ground of appeal instead of 'partly allowing' the same, in which case, DRP's directions allowing credit period of 90 days would remain unaltered.

The Bench observed that submissions now made by assessee were not made during the course of arguments at the time of hearing of the main appeal, and assessee's solitary submission at that time was that the case is covered by assessee's own case for AY 2018-19.

The Bench also noted that “we found on enquiry that the reliance on invoice-wise details were neither filed by the assessee before the Tribunal, as annexure to TPO order nor it was referred to at the time of argument. Therefore, the question of reference to these documents and consideration by the Tribunal in terms thereof does not arise”.

Hence, the ITAT dismissed the assessee's miscellaneous application.

Counsel for Appellant/ Assessee: P.V.S.S. Prasad

Counsel for Respondent/ Revenue: Shakeer Ahamed

Case Title: Aurobindo Pharma Limited verses ACIT

Case Number: M.A. No.85/Hyd/2023

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