TMI Blog2018 (7) TMI 1956X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Rival contentions have been heard and record perused. Facts in brief are that assessee is a company engaged in the business of manufacturing and exporting of drum closures, pipes and cotton yard. During the year under consideration, the TPO made upward adjustment in respect of international transaction entered into by the assessee with its associated enterprises in respect of guarantee provided to its AE. 4. It was argued by learned AR that guarantee was advanced by the assessee as a matter of commercial presidency to protect the business interest of the group and in the absence of guarantee assessee would have provided the funds to its subsidiary, hence provision of guarantee does not lead to any additional risk in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced to AE amounting to ₹ 59,172/-. Issue under consideration is squarely covered by the decision of Delhi High Court in the case of Cotton Naturals (I) Pvt. Ltd., 55 taxmann.com 523 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. We direct accordingly.. 7. With respect to claim of deduction u/s.35D and depreciation u/s.32(1)(ii)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of Bombay High Court in case of Godrej Boyce Mfg. Ltd., 328 ITR 81 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. Needless to say that assessee should be given due opportunity before deciding the issue. We direct accordingly. 8. In the result, appeal of the assessee is allowed in part. . Order pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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