TaxTMI 
TaxTMI 
2015 (4) TMI 681
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....in the circumstances of the case and in law, the Tribunal was correct in treating lending transactions on par with borrowing transactions in conservation to the provision of Section 92B, thereby overlooking crucial factors of opportunity cost and risks borne by the lending entity which is a resident of India, as distinguished from the transaction where the lender is not a resident in India? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in directing the Assessing Officer to benchmark the interest at prevailing EURIBOR rate instead of rupee loan rate to compute the Arms Length interest on the loan amounting to EURO 20,50,000 advanced by the assessee to its AE, ignoring the fact that EURIBO....
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....to carry out a number of risk adjustments to fix the rate of interest on the loans advanced to a foreign entity in an uncontrolled scenario irrespective of base interest EURIBOR ?" 3. The respondent - assessee is engaged in the business of manufacturing of plastic parts and rendering engineering services. The respondent - assessee had advanced an amount of Euro 26.25 lakhs to its wholly owned subsidiary in Germany. The respondent-assessee charged no interest on the above loan. However, during the course of examination of respondent - assessee's international transaction with its subsidiary company i.e. Associated Enterprises, Transfer Pricing Officer (TPO) determined the Arms Length Price (ALP) i.e. interest on the loan advanced by the....
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....ndra Ltd. (46 SOT 141)" by holding that the loan advanced to an Associate Enterprise situated abroad, the rate of interest to be applied is the rate prevailing in the country where the loan has been consumed. 6. Mr. Pardiwala, learned Senior Advocate for the respondent-assessee pointed out that although they have raised an issue of transaction not being international transaction, before the Tribunal, the respondent - assessee has in the facts of the present case chosen not to assail the order of the Tribunal on the above account. In view of the above, there is no occasion for us to express our opinion on the above issue. 7. We find that the impugned order of the Tribunal inter alia has followed the decisions of the Bombay Bench of the Tri....