Tribunal held that the assessee had not borrowed any money. Where the assessee was a debt-free company, the question of receiving any interest on receivable did not arise. The Assessing Officer was directed to delete the addition. Tribunal held that, the operating margin of E could not be included to arrive at the arm’s length price of controlled transactions, which were materially different in content and value. Thus it could not be compared with a low-end service provider like the assessee. I was excluded on the basis of the high brand value and high turnover of the company. ( AY.2012-13, 2015-16)
Avaya India Pvt. Ltd. v. Add. CIT (2020)78 ITR 305 ( Delhi) (Trib)
S. 92C : Transfer pricing – Arm’s length price – Debt-free company —Adjustment in relation to notional interest on overdue receivables is held to be not justified- Comparable – Company having controlled transactions — High brand value and high turnover of company —Held not comparables.