Pr. Commissioner Of Income Tax-1 v. J U D G M E N T

$~45 IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 342/2022 PR. COMMISSIONER OF INCOME TAX-1..... AppellantThrough:Mr.Sanjay Kumar, Sr.StandingCounsel for the Revenue withMs. Easha Kadian, Advocate.Through:Mr.Sanjay Kumar, Sr.StandingCounsel for the Revenue withMs. Easha Kadian, Advocate. versus CORAM: HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1.Present income tax appeal has been filed challenging the order dated11[th]October, 2021 passed by the Income Tax Appellate Tribunal (‘ITAT’)in ITA 4720/Del./2017 for the Assessment Year 2009-10.11[th]October, 2021 passed by the Income Tax Appellate Tribunal (‘ITAT’)in ITA 4720/Del./2017 for the Assessment Year 2009-10. 2.Learned counsel for the Appellant states that the ITAT has erred indeleting the addition made by the Transfer Pricing Officer (TPO) and inholding that the payment made for intra group services was for commercialexpediency. He further states that the ITAT has erred in holding that theTPO has re-characterized the infra group services transaction, withoutappreciating that the TPO has not disallowed the infra group servicesdeleting the addition made by the Transfer Pricing Officer (TPO) and inholding that the payment made for intra group services was for commercialexpediency. He further states that the ITAT has erred in holding that theTPO has re-characterized the infra group services transaction, withoutappreciating that the TPO has not disallowed the infra group services ITA No.342/2022 merely on the issue of non-substantiation of commercial expediency by theassessee but on several other factors. 3.He also states that the ITAT has erred in not considering interest onoutstanding receivables as an international transaction as per Section 92 (B)read with Section 92F(v) of the Income Tax Act, 1961 (‘the Act’) whichrequires to be benchmarked as per Rule 10B of the Income Tax Rules,1962.4.Admittedly, the issue pertaining to infra group services is covered bythe judgement of this Court dated 28[th]July, 2016 in assessee’s own case inITA 386/2016 and other connected matters for the Assessment Years 2007-08 & 2008-09, wherein this Court has held as under:- “3. … The contention of the Assessee was that agreementbetween the Assessee and its AE was a composite one andcould not be split up for the purposes of holding that someservices are at arm’s length and some are not. The ITATappears to have agreed with the above contention of theAssessee on viewing the agreement as a whole. It was notwithin the purview of the TPO to determine if some of theservices resulted in any actual benefit to the Assessee or not.between the Assessee and its AE was a composite one andcould not be split up for the purposes of holding that someservices are at arm’s length and some are not. The ITATappears to have agreed with the above contention of theAssessee on viewing the agreement as a whole. It was notwithin the purview of the TPO to determine if some of theservices resulted in any actual benefit to the Assessee or not. 4. Having heard learned counsel for the Revenue at lengthand having perused the orders of the TPO, CIT(A) and theITAT, the Court is of the view that the view taken by the ITATis plausible one and does not warrant any interference.”and having perused the orders of the TPO, CIT(A) and theITAT, the Court is of the view that the view taken by the ITATis plausible one and does not warrant any interference.” 5.The Appellate Authorities have concluded that facts of present caseare similar to the facts involved in Assessment Years 2007-08 & 2008-09.Consequently, the first issue raised by the appellant is no longer res integra.6.Further, the Appellate Authorities below have accepted the contentionof the assessee that the assessee was justified in not charging interest on thedelayed payments by the AEs and in not levying any interest on delayedpayments made by the non-AEs, as the debtor days given to the non-AEs ITA No.342/2022 5.The Appellate Authorities have concluded that facts of present caseare similar to the facts involved in Assessment Years 2007-08 & 2008-09.Consequently, the first issue raised by the appellant is no longer res integra.6.Further, the Appellate Authorities below have accepted the contentionof the assessee that the assessee was justified in not charging interest on thedelayed payments by the AEs and in not levying any interest on delayedpayments made by the non-AEs, as the debtor days given to the non-AEs ITA No.342/2022 were more than the debtor days given to the AEs. The ITAT also recordedthat at times 120 days are given to the non-AE entity for payment frombilling date. Furthermore, the Authorities below accepted the contention ofthe assessee that during the Financial Year 2008-09, the assessee had netmonthly balance payable to the AEs as opposed to monthly balancereceivable from the AEs as alleged by the Assessing Officer. 7.Consequently, given the concurrent findings of facts by the AppellateAuthorities below that the debtor days given to the AEs are less than thedebtor days given to non-AEs, no substantial question of law arises forconsideration in the present appeal and the same is accordingly dismissed. MANMOHAN, J SEPTEMBER 20, 2022KA MANMEET PRITAM SINGH ARORA, J ITA No.342/2022