The issue was remanded to the Assessing Officer and the Assessing Officer/Transfer Pricing Officer was to treat the provision for bad debts as non-operating expenditure. The ad hoc bad debts filter applied by the Transfer Pricing Officer was liable to be rejected and the companies having bad debts should be considered in the final set of comparables.(AY.2005-06)
Honeywell Automation India Ltd. v. Dy. CIT (2022)95 ITR 51 /209 DTR 145 /215 TTJ 794 (Pune) (Trib)
S. 92C : Transfer pricing-Arm’s length price-Provision for bad debts to be treated as non-operating expenditure for purpose of computing profitability under transfer pricing provisions-Companies having bad debt should be considered in final set of comparables-Remanded. [S.92CA]