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2017 (5) TMI 1637 - ITAT KOLKATADetermining the arms length rate of interest in respect of transactions of loan in foreign currency between the associated enterprises - Held that:- As consistently held in several decisions by the tribunal that wherever the transaction of loan between the associated enterprises is in foreign currency then the transaction would have to be looked upon by applying the commercial principles in regard to international transaction. Therefore the domestic prime lending rate would have no applicability and the international rate LIBOR would come into play. It has therefore been held that LIBOR rate has to be considered while determining the arms length rate of interest in respect of transactions of loan in foreign currency between the associated enterprises. This view has also been accepted by the Hon’ble Delhi High Court in the case of CIT vs Cotton Naturals (I) Ltd.[2015 (3) TMI 1031 - DELHI HIGH COURT] Composite income - Income from growing, manufacturing and sale of tea - comprises agricultural income to the extent of growing tea, which is not chargeable to tax and nonagricultural income to the extent it comprises of income from manufacture and sale of tea, which income is chargeable to tax - According to the AO Cess on green leaf was an expenditure which was attributable to the activity of growing of tea and would therefore be not allowable as deduction while computing income from manufacture and sale of tea - Held that:- The issue is concluded by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs AFT Industries Ltd. [2004 (7) TMI 81 - CALCUTTA HIGH COURT] where the amount paid as cess was held as eligible for deduction in computing the composite income under Rule 8 of I.T. Rules. This issue is, therefore, decided in favour of the assessee upholding the order of the C.I.T.(A) who has allowed the deduction of payment of cess on green leaves in computing the composite income from tea business of the assessee under rule 8 of the I.T. Rules. Also confirmed by M/S APEEJAY TEA CO. LTD [2015 (8) TMI 1260 - SUPREME COURT] - Decided against revenue
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