case of Indo-American Jewellery, the CIT(A) given relief holding that the profit of one AE is negligible while the other AE has incurred losses and therefore, it cannot be said that the assessee has transferred any profit to the AE outside India by not charging interest on the outstanding payment which has been realized. The Hon'ble High Court desisted from expressing any opinion on the issue and kept the reasoning open for debate in an appropriate case. Hence, this case cannot be considered as the law laid down. Further, the reliance laid down by the Id. AR in the case of Kusum Healthcare 398 ITR 66 (Del.) on the issue of no interest adjustment on receivables is warranted cannot be accepted. In that case, the TPO concluded that the figures of receivables beyond 180 days constitutes an international transaction by itself. In that case, the Hon'ble Court held that every item of receivables appearing in the accounts of an entity which may have dealings with foreign AE would not automatically characterized as an international transaction. The Hon'ble Court held that the impact of the receivables and its effect on the working capital of the assessee have to be studied by making a proper enquiry by the TPO by analyzing the statics war period of time discerning the pattern which would indicate that vis-a-vis receivables for the supply made to an AE, the arrangement reflects an international transaction intended to benefit the AE in some way. We find that the TPO held that as per the provisions any arrangement between two AEs for allocation or apportionment of or any contribution to any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises is an international transaction. In this case, admittedly, the taxpayer has provided benefit to its AE by way of advancement of interest free loan in the garb of delay receipt of receivables. These funds could have been otherwise deployed for at least earning interest income. The taxpayer has therefore incurred cost in connection with a benefit and services provided to the AE by way of delay receipt of receivables. Accordingly, even otherwise the delay in receipt of receivables is an international transaction u/s 92B(1) read with clause (v) of section 92F. The DRP held that the TPO charged interest on receivables beyond 30 days. The assessee mentioned that in one of the invoices to Samsung Dubai the amount was payable within 30 to 45 days and as per the invoice to Samsung South Africa amount was payable in 90 days. In view of this, the DRP directed to re-compute the interest on receivables beyond the period mentioned in the respective invoices.
