Case Law Details
Brief of the case
In the case of Tecnimont ICB House vs. DCIT, ITAT has held that Recovery of expenses beyond the normal period was in the nature of deemed loan in the hands of AEs and require transfer pricing adjustment.
Facts of the case
1. cnimont ICB Private Limited (hereinafter referred to as ‘TICB is engaged in the business of execution of turnkey project services particularly in the field of petrochemicals, oil and gas, fertilizers and instrumentation and electrical erection. It is also engaged in activities like EPC lump sum turnkey contracts, engineering design services, supervision services, translation services and feasibility studies. It also renders onshore/ offshore design and engineering services and field construction supervision services.
2. During AY 2009-10, TICB has entered into the following international transactions with its associated enterprises (‘AEs’) The TPO accepted all the transactions to be at arm’s length price (ÁLP’). However, the learned TPO made an adjustment of Rs.10,36,49,646/- by charging notional interest for delayed recovery of export receivables and delayed recovery of expenses from AE’s till the date of transfer pricing order (i.e. 25th January, 2013).
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