Transfer pricing re-characterisation of redeemable preference share subscription and redemption as loans was rejected because earlier decisions in the assessee's own case had already held that, absent material showing sham or concealment of the real character, the TPO could not disregard the apparent transaction or impute notional interest. The interest disallowance on advances to sister concerns also failed because the Tribunal found sufficient own funds on the balance sheets, giving rise to a presumption that the advances came from those funds; that factual finding was not shown to be perverse. Both appeals were dismissed.
Transfer pricing re-characterisation of redeemable preference share subscription and redemption as loans was rejected because earlier decisions in the assessee's own case had already held that, absent material showing sham or concealment of the real character, the TPO could not disregard the apparent transaction or impute notional interest. The interest disallowance on advances to sister concerns also failed because the Tribunal found sufficient own funds on the balance sheets, giving rise to a presumption that the advances came from those funds; that factual finding was not shown to be perverse. Both appeals were dismissed.
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