2021 (2) TMI 1317

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.... out the arms length price of international transaction in the appellant's case applying LIBOR plus 2% on monthly closing balance of advance to subsidiaries." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT{A) erred in rejecting the action of the TPO in working out the rate of benchmarking @11.17% based on the material on records by invoking yield method." 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in rejecting the view of the TPO that loans advanced by assessee to AEs are in the nature of short term working capital requirement and hence interest rate of 1-2 years bonds is applied relying on the information obtained from CRISIL and not based on LIBOR plus." ....

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....lied. The Revenue filed appeal before the Hon'ble Bombay High Court against the said order of Tribunal in Income Tax Appeal No.1869 of 2014, the Hon'ble High Court dismissed the appeal of Revenue vide order dated 09/06/2017. Thus, the findings of Tribunal in assessee's case have become final. 4. Shri Sunil Deshpande representing the Department fairly admitted that the issue raised in the present appeal by Revenue was subject matter of appeal before the Tribunal in assessee's own case in assessment year 2007-08. 5. Both sides heard, orders of authorities below examined. The Revenue is in appeal against the findings of CIT(A) in applying LIBOR + 2% interest rate on the monthly closing balance of advances to subsidiaries during the perio....

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....a) is reproduced herein below: "8.13 Though in principle we do concur with the view of DRP on this issue, however, since the issue of LIBOR has been considered and decided by the Tribunal in various cases as relied upon by the assessee (supra); therefore, to maintain the rule of consistency, we follow the decision of the coordinate Benches of this Tribunal, and accept LIBOR for benchmarking interest on interest free loans to AEs. Since the LIBOR is a rate applicable in the transactions between the banks and further the loans advanced by the bank to clients are secure by security and guarantee; therefore, a loan which has been advanced without any security or guarantee as in the case of the assessee has to be benchmark by taking the Arm's ....