2019 (9) TMI 1684

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....the business of development an export of software. For the assessment year 2006-07, they have fled their return of income on 30/11/2006 showing the income as nil. Insofar as this appeal is concerned, it has advanced interest free loan to its wholly owned subsidiary, namely, Aithent Inc., USA through the continuing loan agreement dated 27/6/2001, 27/7/2001 and 31/7/2001 aggregating to USD 1,700,000/-. In view of the international transaction, determination of Arm's Length Price was referred to the Ld. TPO. Ld. TPO by order dated 08/10/2009 suggested an upward adjustment of Rs.3,59,15,504/-, i.e. Rs.1,46,12,770/- on account of notional interest as per PLR rate @ 10.5% on loans given to the AE and Rs.2,13,02,734/- on account of the softwar....

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....uthorities below missed this point while making the mark up of 500 basis points to the LIBOR. He placed reliance on the decision of Hon'ble jurisdictional High Court in the case of CIT vs M/s Cotton Naturals (I.) Pvt. Ltd. (TS-117-HC-2015(DEL)-TP) and the decision of the Hon'ble Rajasthan High Court in the case of CTI vs M/s Vaibhav Gems Ltd. in ITA No.14 of 2015. Further reliance is placed on the decision of the Mumbai Bench of the Tribunal in Hinduja Global Solutions Ltd. Vs CIT (2013) 35 taxman.com 348 (Mum. Trib.). 7. Per contra, Ld. DR submitted that as revealed by the name itself, LIBOR means 'Landon Inter Bank Offered Rate' and therefore, the LIBOR rate without any mark-up is applicable only to the banks inter se and....