PSU orientation for best air flow/cooling

I am putting together a htpc in a coolermaster itx case where the psu is directly above the motherboard and cpu. The power supply has a 120mm fan that can be put directly above the cpu or it can be on the top of the psu, facing towards the top of the case. There is a 1" or so gap above the psu that would allow for some air circulation if it was mounted in that orientation.
Will the fan being on the bottom pulling air up and out, opposite of the stock cpu fan cause airflow issues? or would it be better to pull the air out of the top, which would get the hottest air out?
I am leaning towards the fan being on the top, but wanted any opinions if there was an obvious advantage to one way vs. the other.

I am using a standard non-modular psu, but I am cutting the cables short and sleeving them to maximize airflow and aesthetics.

There is a 120mm inlet fan at the front

The case is the coolermaster 110 elite. http://www.coolermaster.com/case/mini-itx-elite-series/elite110/
cpu is the 2500k.

if you have an inch over the top of the psu it won't matter for the most part, you might get a bit more radiated heat into the case top.

I would put it whichever way gives you better cable management, I think that will probably make a larger difference than fan location.