2015 (7) TMI 1288

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....u/s. 144C(5) of the Act dated 29/9/2014.. 2. In this appeal the substantive dispute raised by the assessee is with regard to an addition of Rs. 2,71,83,716/- made by the AO on account of determination of Arms Length Price (ALP) of the interest charged from its Associated Enterprise(AE). 3. In brief, the relevant facts are that the appellant is a company incorporated under the provisions of the Companies Act, 1956, and is interalia, engaged in the business of export of diamonds and manufacture of jewellery. In the course of assessment proceedings, it was noticed that the assessee had advanced a loan of US $ 6.60 million to Synergies Corp. USA, an Associated Enterprise. Being an international transaction within the meaning of section 92B of....

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....limited issue, which are as under: Sr.No.  Name of case Citation A.Y Arm's Length fee upheld by Tribunal. 1. M/s. Everest Kanto Cylinder Ltd., ITA No.7073/Mum/2012 2008-09 LIBOR 2. M/s. Vijay Electrical Limited, ITA No.1159/Hyd/2013 2008-09 LIBOR 3. M/s. Kohinoor Foods Ltd. ITA No.3869/Del/2012 2002-03 to 2008-09 LIBOR 4.  TTK Prestige Ltd. ITA No.1257/Bang/2011  2005-06 LIBOR 5. M/s.Hinduja Global Solutions Ltd. 145 ITD 361 (Mum) 2009-10 LIBOR 6. Micromax Informatics Ltd. ITA No.6135/Del/2014 2011-12 L IBOR 7. M/s. Bhansali & Co. ITA No.825/Mum/2014 2009-10  LIBOR + 2% 8. M/s. Everest Kanto Cylinder Ltd. ITA No.550/Mum/2014 2009-10 LIBOR +2% 9. M/s.PMP Auto Components P.....

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....ustment is required. 6.1 The Hon'ble Delhi High Court in the case of Cotton Naturals Ltd.(supra) was considering a dispute relating to computation of ALP vis-à-vis interest chargeable on loans advanced to a foreign subsidiary Associated Enterprise. The issue before the Hon'ble High Court related to determination of ALP of interest charged by an Indian Company on the loan advanced by it to its foreign subsidiary in foreign currency. The Hon'ble High Court held that interest rate should be the market determined interest rate applicable to the currency concerned, in which the loan has to be repaid. According to Hon'ble High Court, interest rate should not be computed on the basis of interest payable on the currency or legal tender of t....