2020 (3) TMI 1505

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....ct, 1961 (here-in-after referred to as "the Act") dt.28/03/2016 relevant to the Assessment Year 2009-2010. The assessee has raised the following grounds of appeal. 1) The Id. CIT(A) has materially erred on facts and in law in confirming the impugned addition made by the A.O. for the alleged addition on account of Transfer Pricing adjustment of Rs. 12,07,517/- 1.1) The Id. CIT(A) was equally in error on facts and in law in not appreciating the fact that the Hon. ITAT in its set-aside order did not dismiss the appeal of the Appellant on this issue and in the original order, the addition was not made on account of Transfer Pricing adjustment but it was disallowance made u/s 36(1)(iii) and as such in the fresh set-aside ass....

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....onsideration has advanced interest-free loan amounting to Rs. 2,02,19,750/- to the associated concern based in foreign countries. As per the AO the transaction for advancing the interest-free loan to the associated enterprises was the international transactions which was covered under section 92 of the Act. Accordingly the AO determined the arm length price of such transaction at the rate of 7.60% i.e. LIBOR +3% whereas the assessee claimed to determine the same at 5.09% i.e. LIBOR + 2%. However, the AO determined the arm length price at Rs. 12,07,517/- being 7.6% of interest free loan provided to the associated enterprises and added to the total income of the assessee. 4. Aggrieved assessee preferred an appeal to the learned CIT (A) who....

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.... to ascertain arms length price of the international transaction as that of the assessee. We agree with the assessee's contention that where the transaction was of lending money in foreign currency to its foreign subsidiaries the comparable transactions, therefore, was of foreign currency Tended by unrelated parties. The financial position and credit rating of the subsidiaries will be broadly the same as the holding company. In such a situation,-domestic prime lending rate would have no applicability and the international Rate Mixed being LIBOR should be taken as the benchmark rate for international transactions." 8. At the time of hearing, the learned DR did not controvert the arguments advanced by the learned AR for the assessee. I....