2017 (6) TMI 1087

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.... "Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was justified in directing the Assessing Officer to determine the Arm's Length interest by considering the LIBOR (London Inter Bank Operative Rate) plus 2% on the monthly closing balance of the advances?" 3 The learned counsel strenuously contends that the Tribunal was not justified in directing the Assessing Officer to determine the Arms Length interest by considering LIBOR plus 2% on monthly closing balance of the advances. The learned counsel submits that the advances have been given by the entity in India. As such the rate of interest as applicable in India ought to have been applied and same would be reasonable and proper. The learne....

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....in respect of the impugned order from that taken in "VVF Ltd. Vs. DCIT" (supra) and "DCIT Vs. Tech Mahindra Ltd." (supra). The Revenue not having filed any appeal, has in fact accepted the decision of the Tribunal in "VVF Ltd. Vs. DCIT" (supra) and "DCIT Vs. Tech Mahindra Ltd." (supra)." 6 We have also perused the order of the Tribunal in case of Deputy Commissioner of IncomeTax, Circle 2(3), Mumbai vs. Tech Mahindra Ltd., reported in [2011] 12 taxmann.com 132 (Mum). The Tribunal has made following observations : "The view taken by us also finds support from these observations of the coordinate Bench. When there is a choice between the interest rate of a currency other than the currency in which transaction has taken place and t....

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....does not require adjudication on the broader question as to whether an extended credit period can anyway be compared with a loan, much less a loan in some other currency which will have distinct lending rates depending on the peculiarities relating that currency, since it does not involve the lending period commitment as loan necessarily involves. Be that as it may, the CIT (A) cannot thus be said to be in error in adopting the US Dollars LIBOR rate, with markup which is not in dispute for its being too low, as a basis for ALP adjustmentas long as he can be said to be justified in upholding the ALP adjustment. There is thus no justification in grievance raised by the Assessing Officer against the relief granted by the CIT (A). As we uphold ....