TaxTMI 
TaxTMI 
2025 (12) TMI 1762
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.... of the Income Tax Act, 1961 (hereinafter 'the Act') arising out of order of Dispute Resolution Panel directions dated 17.11.2020 pertaining to Assessment Year 2016-17. 2. The grounds of appeal raised by the assessee reads as under: - "1. That on the facts and circumstances of the case and in law, the Ld. AO has erred in assessing the total income of the Appellant at Rs. 9,35,08,334/- as against the returned income of Rs. NIL. 2. That on the facts and circumstances of the case and in law, the Ld. Dispute Resolution Panel ("DRP") Transfer Pricing Officer ("TPO") erred in making a transfer pricing adjustment of Rs. 9,35,08,334/- to the income of the Appellant by alleging that the interest paid by the Appellant in relation....
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....currency in which the loan is repaid must be applied. 6. That on the facts and circumstances of the case and in law, the Ld. DRP/TPO have erred in not appreciating various judgments of this Hon'ble Tribunal wherein it was held that SBI Prime Lending Rate ("PLR") (and not LIBOR based interest rate) must be considered for benchmarking the payment of interest on rupee-denominated CCDs issued by an Indian company. 7. That on the facts and circumstances of the case and in law, the AO erred in initiating penalty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income. Each of the above grounds are independent and without prejudice to the other grounds of appeal preferred by the....
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....s 143(3) r.w.s. 143(3A) & 143(3B) of the Act, vide order dated 30.03.2021. Aggrieved, the assessee preferred an appeal before the Tribunal. 4. Before us, at the outset, the Ld. AR has submitted that the issue now stands covered by the decision of the Hon'ble Special Bench in the case of Hyderabad Infratech (P.) Ltd. vs. Deputy Commissioner of Income-Tax, Circle-2 (2) [2025] 171 taxmann.com 385 (Hyderabad-Trib.). 4.2 Ld. AR has filed written submissions alongwith the paper book, wherein the factual background of the instant case has been submitted as under: "1. ....... 2. During AY 2016-17, the Appellant had entered into various international transactions with its Associated Enterprise ("AEs"). In compliance with S....
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.... out to be 13.35%. Since the interest rate paid by the Appellant was less than the average rate of interest of comparable companies, i.c., 13.35%, the international transaction undertaken between the Appellant and Thymelicus was determined to be at arm's length (refer pages 752-753 of the paperbook/internal pages 42-43 of TP report for arm's length analysis and refer pages 783-786 of the paperbook/internal pages 73-76 of TP report for data of comparable companies). 5. ............ 6. The Ld. TPO rejected the benchmarking approach of the Appellant without providing any cogent reason and applied the SBI Base Rate of 9.71% for benchmarking of the interest rate without allowing for any additional basis points because t....
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.... the said interest has to be benchmarked against the interest rates prevailing in the domestic market and similar debt instrument, such as the domestic prime lending rate (PLR). Therefore, we are of the considered view that as regards TP adjustment made in respect of interest paid / payable on CCD/NCD/other debentures, which are denominated in Indian currency, the benchmark is to be by applying PLR against LIBOR. Accordingly, we answer the question referred to for the Special Bench as under: Whether as regards TP adjustment made in respect of interest paid / payable on FCCDs / NCDs / other debentures, which are denominated in Indian currency the benchmarking is to be made by applying PLR as against LIBOR?" (i) Yes, in favour of the as....