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2015 (7) TMI 211 - AT - Income TaxTransfer pricing adjustment - determination of arm’s length price u/s. 92 in respect of an international transaction entered into by the assessee with its AE - whether determination of arm’s length price (ALP) u/s. 92 of the Act in respect of an international transaction entered into by the assessee with its AE? - Held that:- In the matter of determination of ALP in respect of a loan transaction, LIBOR rate of interest should be the interest rate applied for determining the ALP. See Four Soft Limited vs DCIT, [2011 (9) TMI 634 - ITAT HYDERABAD] and M/s Siva Industries & Holdings [2011 (5) TMI 451 - ITAT, CHENNAI ]. In the present case, it is not disputed by the Revenue that the interest rate charged by the assessee in the international transactions was much higher than the LIBOR rates. It is also not in dispute before us that the decisions rendered by the Chennai Bench of the Tribunal in the case of Siva Industries & Holdings Ltd. (supra) has not been overruled or any other contrary decision has been taken on the issue by any Benches of the Tribunal. In such circumstances, we are of the view that the stand taken by the AO for rejecting the plea of the assessee referred to above is unsustainable. In view of the above conclusions, we are of the view that the interest charged in the loan transaction in question has to be held to be as at arm’s length - Decided in favour of assessee.
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