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2012 (5) TMI 45 - ITAT MUMBAI
Addition made consequent to a transfer pricing adjustment to international transaction - interest free loan given to one its AE – TPO determined the arm's length interest at the rate of 10 percent per annum based on the rate of interest charged by the taxpayer on Euro denominated loan granted to its German AE – Held that:- Assessee confirmed the transfer pricing adjustment - once the transaction between the assessee and the AE is in foreign currency and the transaction is an international transaction the domestic prime lending rate would have no applicability and the international rate fixed being LIBOR would come into play - the average of the LIBOR rate for period in question is 4.42% and the assessee has charged interest at 6% which is higher than the LIBOR rate no addition on this count is liable to be made in the hands of the assessee – Appeal partly allowed.