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2014 (11) TMI 254 - AT - Income TaxDetermination of ALP - Interest payment on External Commercial Borrowings - Conditions laid down in section 10(15)(iv)(c) fulfilled or not Held that:- It is a fact that the CBDT has examined the receipt of interest as per the provisions of section 10(15)(iv)(c) of the Act - where the utilization is for purchase outside India of raw material, components or Plant & Machinery, so long as exemption granted is valid, the interest received by the other party is not covered by the IT Act and by virtue of exemption granted by the Central Govt., the question of TDS on the above amount does not arise at all. Since there is no requirement of TDS, question of disallowance under section 40(a)(ia) for non deduction of tax also does not arise - They also placed on record the approval of the RBI for the purpose of financing the Put Option under Euro Convertible Bonds issue of USD 75 Million - After examining the relevant certificates the CBDT Foreign Tax Division vide letter dated 12.03.1997 granted the approval under section 10(15)(iv)(c) - the contention of assessee now made at the time of payment of interest does not survive as the issue of utilization of the funds was already examined by the CBDT at the time of granting exemption - once the interest income is not taxable in the hands of recipient and was exempted by the Govt. of India, question of TDS on the interest paid by assessee does not arise Decided against Revenue. Addition in respect of sale of AE Held that:- Assessee has already considered all the 8 transactions with its AE in totality by aggregating the same whereas the TPO picked up two transactions where the price charge was less than the average market price - Rule 10(A)(a) defines a transaction to include a number of closely linked transaction in case they are closely linked then they can be aggregated for determining the ALP - assessee has exported hot rolled coils to its AE between 30-6-2005 to 10-3-2006, the price has been determined from the website whose data is not subject to challenge - The product remains the same and the source from which the average price has been taken remains the same - if the average price is adopted for all the 8 transactions, then the average comes exactly to 420.71 which is what the price charged by the assessee to its AE - the detailed finding recorded by the CIT(A) there is no reason to interfere in the order of CIT(A) for deleting the addition in respect of adjustment Decided against revenue.
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