2018 (7) TMI 490

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....ribunal). The impugned order is in respect of Assessment Year 200910.   2. The Revenue urges the following questions of law for our consideration : (i) Whether on the facts and circumstances of the case and in law, the Tribunal has erred in ignoring that SBI PLR rate should have been used as benchmark instead of LIBOR since "cost of funds appraoch" is used for charging interest on receivable and the same is in line with the Guidelines prescribed when working capital adjustments are to be made? (ii) Whether on the facts and circumstances of the case and in law, the Tribunal was erred in directing the Assessing Officer to consider LIBOR rates on transactions with the Associated Enterprises, without appreciating that the loans in....

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....24th December, 2013 of Assessing Officer under Section 143(3) r/w Section 144C (13) of the Act. 5. Being aggrieved with the order dated 24th December, 2013, the respondent filed an appeal to the Tribunal. By the impugned order dated 8th July, 2015, the appeal was allowed. The impugned order records a finding of fact that no interest was charged by the respondent assessee to its AEs nor was it charging interest in respect of the services rendered to non AEs even when payments are made beyond the normal credit limit of 60 days. The impugned order also finds that the operating margin earned by the respondent assessee in respect of its AEs transactions was higher than the margin earned from its nonAEs transactions. The impugned order of the ....

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....ice in competative conditions between non AEs. In this case, it is only the notional interest which is being computed as in fact no interest is charged by the respondent for delayed payments universally i.e. from AEs and non AEs. In cases where any business enterprise is required to pay interest on delayed payment, it would examine the cost of interest and if the same is higher then the amount of interest payable on funds obtained locally, it would take a loan from local sources and pay the amounts payable for exports and expenses within time. Therefore, extending of credit beyond the normal period of 60 days is in substance a granting of loan to an AE so as to enjoy the funds, which the AE would othewise have to repay within the p....