During Assessee Company’s Assessment, on matter being referred to Transfer Pricing officer, an adjustment on account of notional income in respect of interest on delayed receivables based on actual realizations on each invoices was proposed and A.O made the adjustment in the final Assessment Order.

On Appeal Tribunal directed to rework the adjustment made based on credit period as stated in master service agreement which was 90 days as against 30 days considered in the adjustment made in the Order. In the event if it exceeds 90 days, but if found to be subsumed in working capital adjustments than no adjustment be made. In case any trade payables that falls outside 90 days period and not subsumed, than adjustment should be restricted to Libor + 300 basis points.  (AY. 2015-16)