that whenever there are outstanding trade receivables, they are required to be benchmarked applying the State Bank of India short-term deposit interest rate for the subject year to determine the arm’s length price interest rate. Hence, the State Bank of India short-term rate would be the appropriate rate for the purpose of determining the arm’s length price on the outstanding amount. Tribunal also held that in the absence of any contemporaneous evidence showing the grace period, the Assessing Officer had rightly granted 30 days. The normal trend to be followed was 30 days.(AY.2012-13)
HM Clause India P. Ltd. v. Dy. CIT (2023)106 ITR 91 (SN.)/ 153 taxmann.com 209 (Hyd.)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Interest on delayed receivables-To Be Benchmarked Applying State Bank Of India Short-Term Deposit Interest Rate For Year-No Material To Show Grace Period Allowed By Assessee To Associated Enterprise-Assessing Officer Granting 30 Days-Proper. [S. 92B, 92F(v)]