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2018 (11) TMI 1711 - AT - Income TaxDetermination of ALP on corporate guarantee on loans availed by AE - international transaction within the meaning of sec. 92B - DR vehemently during the course contends that a corporate guarantee is very much an international transactions post facto amendment in sec. 92B of the Act with retrospective effect dated 01.04.2002 - CIT-A deleted the addition - HELD THAT:- Revenue fails to dispute the fact that the learned co-ordinate bench hereinabove has considered amended provision as well. There is no dispute that the CIT(A) has adopted judicial consistency in following his findings on the every issue in earlier assessment years attending finality upto this tribunal as well. There is no distinction on facts or law indicated at the Revenue’s behest in the impugned assessment year. We therefore affirm the CIT(A)’s findings under challenge deleting corporate guarantee’s arm’s length price adjustment(s) in both the impugned assessment years. Transfer pricing adjustment in respect of assessee’s loans given to its overseas associate enterprises - HELD THAT:- The matter is well covered by the general consensus among the hon'ble ITAT Benches that international transactions involving cross-border country loans to AE can be benchmarked against LIBOR, as also supported by the RBI’s circu9lar that a spread ranging from 1% -2% over LIBOR is reasonable (or advancing loans. Therefore, in deciding the matter, it is held that an interest rate of LIBOR plus 2% can be held to be Arm’s length rate of interest, and as for the case at hand, the interest charged by the assessee from its AE is higher than LIBOR plus 2%, the adjustment made by the ld. TPO in the case is held to be unjustified and not sustainable. See M/S EIH LIMITED AND VICE-VERSA [2018 (1) TMI 1372 - ITAT KOLKATA] - Revenue’s appeals are dismissed.
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