Continuing debit balance is not an “international transaction”

The Mumbai bench of the Income Tax Appellate Tribunal (“ITAT”) recently pronounced its ruling in the case of M/s Nimbus Communications Limited vs. ACIT Circle 11(1), Mumbai for Assessment Year 2004-05, ITA No. 6597/Mum/09, on transfer pricing issues arising from amount overdue to the Taxpayer from its associate enterprise (“AE”). The tribunal held in favour of the Taxpayer observing that if a commercial transaction was at arms? length, no transfer pricing addition for non-charging of interest on overdue debt was warranted. Facts The Taxpayer did not charge any interest on overdue payme...