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2018 (7) TMI 1956 - AT - Income TaxAdjustment of ALP by TPO in respect of guarantee fee in respect of corporate guarantee provided to the assessee’s foreign subsidiary - HELD THAT:- Rate adopted was in the range of 0.25% - 0.50%. These rates were in case of corporate guarantee whereas in case of assessee, it is issuance of SBLC. Hence, the said rates are not applicable in case of the assessee. We observe that the assessee has been charged a rate of 0.9% by an Indian bank for SBLC. This is a clear case of internal CUP. Further, in this case, the DR has not raised any objection on adoption of internal CUP of 0.9% p.a. Hence, in our opinion since the internal CUP is available with the assessee, the said rate of commission of 0.9% p.a. should be considered as arm’s length rate of commission. Accordingly, AO is directed to compute guarantee fees @0.9%. Addition on account of interest charged - loan advanced to AE - HELD THAT:- Issue under consideration is squarely covered by the decision of Delhi High Court in the case of Cotton Naturals (I) Pvt. Ltd. [2015 (3) TMI 1031 - DELHI HIGH COURT] wherein it was held that arm’s length interest rate for loan advanced to foreign subsidiary by the Indian company should be computed based on market determined interest rate applicable to currency in which loan has to be repaid. Respectfully following the proposition laid down by Delhi High Court, we direct the AO to compute interest as per the interest rates applicable to currency in which loan was required to be repaid by the assessee. Claim of deduction u/s.35D and depreciation u/s.32(1)(ii)(a) - appellate authority power to accept the additional grounds - HELD THAT:- We found that issue is now squarely covered by the decision of Bombay High Court in case of Godrej & Boyce Mfg. Ltd., [2010 (8) TMI 77 - BOMBAY HIGH COURT] wherein it was held that appellate authority has the power to accept the additional grounds. Accordingly, we accept the ground raised and restore the matter back to the file of the AO for deciding afresh after giving due opportunity to the assessee. Accordingly, both the issues regarding revised claim of deduction u/s.35D and additional depreciation u/s.32(1)(a) of the Act is restored back to the file of the AO for deciding afresh.
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