TaxTMI 
TaxTMI 
2015 (11) TMI 12
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....ts and circumstances of case the Learned Dispute Resolution Panel has erred in confirming the addition made by the Learned Transfer Pricing Officer amounting to Rs. 27,635,849/- in respect of international transaction being the foreign currency loan given to Associate Enterprise. The appellant prays that conclusion reached by the Learned Dispute Resolution Panel is not justified and is contrary to the provisions of the law and various judicial pronouncements. The appellant prays that the addition made by the learned Transfer Pricing officer and confirm by the Learned Dispute Resolution Panel may be deleted. Without prejudice to Grounds No.1 & 2 3. On the facts and circumstances of case the Learned Dispute Resolution Panel has erred in conf....
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....d taking into consideration the prevailing international rate of interest in the currency in which the loan is given than the average effective rate is 5.62%. The assessee has charged 7% interest and hence it was contended that the interest charged is at arm's length price. The Assessing Officer held that while considering the arms length price in respect of a loan given in a foreign currency it is not necessary to only rely upon the rate of interest as prevailing in the currency in which the loan is given and the rate of interest prevailing in India or any other rate of interest determined in Indian Rupees can be adopted. The DRP also followed the said principle and rejected the claim of the assessee. 6. Before us, the ld. Counsel for the....
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....f Income Tax (A) cannot refuse to follow the order of the ITAT as the orders of the ITAT are binding on the lower authorities. The Hon'ble Madhya Pradesh High Court also referred to the decision of the Hon'ble Supreme Court in the case of "Kamlakshi Finance Corporation Ltd." reported in AIR 1992 SC 711. 9. The ld. D.R., on the other hand, has placed strong reliance on the impugned order. 10. Having heard the rival contentions, we find that the ld. DRP has, in this regard, observed as follows:- "4.6 Discussion and Directions: We have considered the .above submissions of the assessee, the order passed by the TPO as well as the documents produced before us. In this regard, it may be noted that for the purpose of benchmarking a transa....
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....f the above decisions of Hon'ble ITAT has not at all been considered In this case, the TPO had rejected the assessee's claim and had computed the notional interest at the rate of 14% based on certain domestic borrowings of the assessee. On appeal, the Tribunal observed that the cost incurred by the assessee was not a relevant consideration under the CUP and the comparable transaction should be foreign currency lending between unrelated parties. Since the assessee had foreign currency lending from a bank, the Tribunal upheld the order of ld. CIT(A) who had applied the correct method to compute the ALP of the interest on loans to AEs. The ITAT observed as under:- o o o o o 4.8 In view of above discussion, therefore, it is evident that t....