2025 (8) TMI 675

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....he case as coming out from the orders of authorities below are that the assessee is a company engaged in manufacture and sale of gear cutting tools and servicing of Gelson Gear Processing Machines. It has filed its income tax return for the impugned assessment year on 14.3.2022 declaring an income of Rs. 1.04 crores. Thereafter, the case of the assessee was selected for scrutiny. Observing international transactions, a reference was made to the Transfer Pricing Officer ("TPO") on 7.10.2022 with the approval of concerned ld. PCIT. Thereafter, the TPO vide its order dated 10.10.2023 made certain adjustments with respect to the transactions interest paid on External Commercial Borrowing (ECB) loans. The TPO made an adjustment of Rs. 19,86,084/....

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....orders of the lower authorities. 7. After considering rival submissions, we observe that neither the TPO nor the DRP has dealt with the issue of FAR test, to be applied for selecting the comparables in order to benchmark the international transactions. Further, it is an admitted position of fact that the assessee has obtained RBI approvals for making payments to its AE. Therefore, we are of the view that the ld. TPO would examine the case of the assessee afresh after applying FAR test and considering the RBI rates of interest applicable for the relevant period. It is worthy to mention here the judgement of Hon'ble jurisdictional High Court in the case of CIT Vs. GE Technology reported in 125 taxmann.com 168 (2021), wherein the Hon'ble ju....