𝗪𝗼𝗿𝗸𝗶𝗻𝗴 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗮𝗱𝗷𝘂𝘀𝘁𝗺𝗲𝗻𝘁 𝗰𝗮𝗻𝗻𝗼𝘁 𝗯𝗲 𝗺𝗮𝗱𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗮𝗯𝘀𝗲𝗻𝗰𝗲 𝗼𝗳 𝗮𝗻𝘆 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗰𝗼𝘀𝘁

 In DCIT v. Coca Cola India Inc., the Delhi ITAT held that a Working Capital Adjustment cannot be made merely because receivables from an AE remain outstanding for an extended period. The Tribunal observed that such adjustments under TNMM are intended to improve comparability and must be supported by evidence of actual financing cost or economic disadvantage. Since the assessee had no external borrowings, incurred no interest cost, and was fully funded by its US Head Office, the Revenue failed to establish any real financial burden arising from delayed receivables. Accordingly, the TP adjustment was deleted.