Calculation of Interest Solely on Trade Receivables for ALP Determination is Unreasonable: ITAT

The Income Tax Appellate Tribunal (ITAT) ruled that calculating interest solely based on trade receivables for determining the arm's length price (ALP) in transfer pricing cases is unreasonable. The tribunal held that this method does not adequately capture the complexities of related-party transactions and could lead to skewed tax assessments. This ruling calls for a more comprehensive approach to ALP determination, ensuring fairness in international tax matters.