2021 (1) TMI 1294

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.... in law and on the facts and circumstances of the case. 2. The Ld. Transfer Pricing Officer ('Ld. TPO')/ Ld. Assessing Officer ('Ld. AO') have erred on facts and circumstances of the case in determining the arm's length price of the appellant's international transaction with its associated enterprises in respect of interest on loan advanced to wholly owned subsidiary thereby proposing an enhancement of returned income by Rs.1,47,99,068/-. 3. The Ld. TPO/AP/ Hon'ble DRP has erred in laws and facts of the case by computing interest at US LIBOR further enhanced by more than 236% for risk profile etc. which is completely unreasonable and against the accepted industry norms." 3. Regarding the third and effective gro....

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.... to 12 which read as under: "7. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 8. At the very outset, ld. AR for the taxpayer contended that the issue in question is duly covered in favour of the taxpayer in its own case for AY 2006-07 decided in ITA No.257/Del/2017 vide order dated 02.09.2019. It is further contended that when granting a loan to wholly owned subsidiary is less risky as compared to loan granted by bank, TPO/DRP have erred in making the mark-up of 500 basis points to the LIBOR and relied upon the decision rendered by the Hon'ble De....

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....close relationship between the two AEs and the funds were the shareholder funds, and not borrowed money." 10. Similarly, Hon'ble Rajasthan High Court in CIT vs. M/s. Vaibhav Gems Ltd. (supra) also decided the identical issue in favour of the taxpayer by holding that the taxpayer is entitled for the benefit of average LIBOR rate existing at that time which was 0.79% and also rejected the addition of ad hoc 2% applied by the Revenue by returning following findings:- "11. Regarding ITA No.149/2015 preferred by the assessee in view of the Delhi High Court judgment (para no.14), the international transaction is required to be accepted, therefore, Tribunal has committed serious error. The assessee will be entitled for the benefi....