Case Law Details
PCIT Vs Inductis India Pvt. Ltd. (Delhi High Court)
Delhi High Court held that the assessee company being a debt free company the question of receiving any interest on receivables did not arise. Accordingly, the adjustment made by AO on account of interest on outstanding receivables. Writ dismissed as no substantial question of law arose.
Facts- The respondent/assessee being a wholly owned subsidiary of ExlService Mauritius Ltd was engaged in providing IT enabled back office research and data analytics services to its associated establishments (AE) filed its return on 29.11.2012 declaring its total income as Rs. 16,42,41,218/-.
The respondent/assessee was called upon to show cause as to why a disallowance u/s. 14A of the Act read with Rule 8D of the Rules be not made pertaining to the dividend income of Rs. 30,15,872 pertaining to which expenses were not declared during the relevant financial year.
Reference u/s. 92CA of the Act was made to the Transfer Pricing Officer (TPO) for the determination of Arms Length Price qua international transactions undertaken by the respondent/assessee. In the course of proceedings, the TPO issued a show cause notice to the assessee, calling upon it to explain as to why an upward adjustment be not made to the value of international transaction resulting in corresponding enhancement in the income of the respondent/assessee, and the TPO selected, in the list of comparables, two entities, namely Accentia Technologies Ltd. and TCS E-Serve Ltd. TPO added a sum of Rs. 13,20,31,648/- to the total income of the respondent/assessee on account of the Arms Length Price (ALP) adjustment pertaining to IT enabled services.
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