Tribunal Confirms Interest Imputed on Inter-Company Receivables Is Includible in Transfer Pricing Assessment

Court: Bangalore bench of the Income Tax Appellate Tribunal Citation: Logix Micro Systems Ltd. Vs. ACIT Brief: The Bangalore tribunal has confirmed the inclusion of imputing interest on inter- company receivables as part of the transfer pricing assessment scrutiny and held that the arm’s length principle is equally applicable to interest on receivables under the India transfer pricing regulations. Facts of the case • M/s Logix Micro Systems Ltd (the taxpayer) is engaged in the provision of software development and consultancy services to its Associated Enterprise (AE) in USA. During AY 200...