2022 (5) TMI 819

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....ome Tax [Appeals] - 26, New Delhi dated 28.08.2017 pertaining to Assessment Year 2013-14 and Commissioner of Income Tax [Appeals] - 26, New Delhi dated 28.08.2017 pertaining to Assessment Year 2014-15. 2. Since common grievance is involved in all the captioned appeals and were heard together, they are being disposed of by this common order for the sake of convenience and brevity. 2. The common grievance of the Revenue in all the three appeals reads as under: "1. The Ld. CIT(A) has erred in relying on the case of CIT vs Cotton Natural (I) (P.) Ltd.( 55 taxman. Com 523 Delhi High Court) because the case of the assessee under reference pertains to interest on loan and its taxability and not on the issues raised in the order reli....

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...."5.2 I have carefully considered the submissions of the appellant the order of the TPO for Assessment Year 2010-11 in the case of the appellant. It is seen that in the case of the appellant for AYs 2007-08 to 2009-10 the Revenue has consistently taken LIBOR mark-up thereon as the basis of determination of interest on the International Transaction loan to foreign AE. Respectfully following the judicial pronouncements of Hon'ble Delhi High Court in the case of Cotton Naturals (Supra) and Bharti Airtel (Supra), these grounds of appeal are allowed." 4.3 Since the facts are similar in the present appeal, following the above decision, transfer price addition of Rs. 1,73,80,385/- u/s 92C(3) on account of notional interest receivable made ....

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....born and paid by the borrower and not by the lender and thus no adjustment for markup of transaction cost, is required to be charged. In the case of Everest Kanto cylinder Limited (Supra) LIBOR rate has been held at arm's length in the facts of that case, and said ratio cannot be applied over facts of the case before us. 6.3 In the instant case, the AE was a relatively new entity in the year under consideration and credit rating of the same being not good, the assessee has advanced loan to the AE, so if in comparable situation, a bank in India sanction a loan to any entity in USA in uncontrolled manner transaction, then credit rating of the loan recipient entity should be taken into account. The AO has followed earlier AY 2007-08 a....