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2013 (8) TMI 332 - AT - Income TaxArm Length Price adjustment Revenue has made upward adjustment on the basis of Arms Length Price Held that:- Adjustment must be deleted for the short reason that it was part of the arrangement that specified credit period was allowed and thus the cost of funds blocked in the credit period was inbuilt in the sale price. There is no dispute that similar products are not sold to any other concern, at same price or even any other price, and interest is levied on the similar credit period allowed to those independent parties but not to Micro USA - The very foundation of impugned addition in arm's length price on account of excess credit period is thus devoid of any legally sustainable merits or factual basis Directed the Assessing Officer to delete ALP adjustment Decided in favor of Assessee. Cost of fund in an International transaction between associated enterprise -Relationship between the assessee and its step down subsidiary Micro USA was simply that of a lender and a borrower - Not only the Micro USA was a significant part of the marketing apparatus of the assessee, and the assessee and the Micro USA had significant commercial relationship on that count, the assessee was a de facto and de jure promoter of the Micro USA Held that:- Relying upon the decision in the case of VVF Ltd. Versus DCIT [ 2010 (1) TMI 781 - ITAT, Mumbai ] costs of funds have no relevance and it is only the rate applicable for comparable uncontrolled transaction that is to be taken into account Decided in favor of Assessee.
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