2018 (8) TMI 757

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.... "[A] Whether the Appellate Tribunal has substantially erred in law in restricting the arms length interest rate on loan from 4.31% to 2.40% for loan given to Associated Enterprise? [B] Whether the Appellate Tribunal has substantially erred in law in deleting the addition of Rs. 3,01,66,650/being Arms length price on corporate guarantee?" [2.0] So far as proposed question No.2[B] is concerned, the same is under consideration by this Court in Tax Appeal No.567/2016. Hence, present Tax Appeal is admitted qua question No.2[B]. [3.0] Now, so far as proposed question No.2[A] viz. Whether the Appellate Tribunal has substantially erred in law in restricting the arms length interest rate on loan from 4.31% to 2.40% for loan given to Associate....

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....d circumstances of the case. In present case since Associated Enterprise is situated in France it is most appropriate to consider mark up on the basis of average speed over LIBOR charged in France rather than adopting mark up on the basis of average spread over LIBOR charged in whole European region. The average spread charged in France out of analysis carried out by TPO himself is 163 basis point as compared to 273 basis point of whole Europe. The spread over LIBOR would depend on various economic factors of each and every country coming in European region. Further the argument of the appellant company regarding considering internal cup of IDBI bank wherein bank has charged interest @ LIBOR + 100 basis points is not tenable as the transact....