- The trade receivables from the Associated Enterprise were outstanding for more than six months.
- The Assessing Officer was of the view that giving a long period of credit on trade receivables was in the nature of an interest-free loan transaction which were subject to provisions of section 92 of the Act.
- Accordingly, a reference was made to the Transfer Pricing Officer for determination of Arm’s Length Price under section 92CA of the Act. The Assessing Officer was of the view that this transaction was an international transaction.
- In Assessee’s own case for the Assessment Year 2009-10 vide order dated 22.2.2017, the Bangalore Tribunal concluded that giving a long credit period beyond six months on trade receivables constituted an international transaction and Arm’s Length Price on such transaction was to be determined.
- Therefore, the decision of the Tribunal in Assessee’s own case was followed. Hence, the said transaction constituted an international transaction.
Sign up for free trial to see all the top cases under this issue with Riverus Telescope