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2015 (6) TMI 175 - AT - Income TaxLIBOR based interest rate - whether such rate may be applied where Indian entities borrow loans from overseas whereas the position is totally reverse in the present case and the A.O. had correctly applied SBI PLR based interest rate? - Held that:- The issue of adopting the PLR of the public sector banks or LIBOR for the purpose of arm's length interest has been considered by this Tribunal in the series of decisions. See Micro Inc. Ltd. v/s ACIT [2013 (8) TMI 332 - ITAT AHMEDABAD] - Decided against revenue. Transfer pricing adjustment - adjustment of interest levied on selective trade receivables received from related party - Held that:- The Tribunal has taken a view that the transaction of allowing the credit period to the A.E. on realisation of sale proceeds has to be considered along with the main international transaction in respect of sale to A.E. A similar view has been taken by the Tribunal, Delhi Bench, in Kusum Healthcare Pvt. Ltd. (2015 (4) TMI 180 - ITAT DELHI) empirically demonstrates that the differential impact of working capital of the vis-a-vis its comparables has already been factored in the pricing/profitability of the assessee which is more than that working capital adjusted margin of the comparables. Hence, any further adjustment to the margins of the assessee on the pretext of outstanding receivables is unwarranted and wholly unjustified. Thus set aside this issue to the record of the Assessing Officer / Transfer Pricing Officer and direct to re–do the exercise of determination of arm's length price in the light of the above decisions of the Tribunal. - Decided in favour of assessee for statistical purposes
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