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2018 (10) TMI 1851 - AT - Income TaxTP adjustment relating to difference in the interest paid on loan - assessee has given a loan in foreign currency to its AE and has charged interest @ EURIBOR Plus 0.25% - such an interest rate was benchmarked by applying CUP method whereby the ALP interest rate was considered at EURIBOR Plus 0.12% - HELD THAT:- Assessee has given loan to its AE in foreign currency only, therefore, to hold that such a foreign currency loan should be treated as loan given in India rupee, because it has gone from the accounts from India is not correct observation of the TPO. DRP, therefore, has rightly held that AO did not have any rational basis for treating the foreign currency loan to be given in INR. Now is a well settled law that a loan given or taken in foreign currency loan, then same has to be benchmarked with reference to the market determined interest rate applicable to the currency loan has to be repaid. See M/S COTTON NATURALS (I) PVT. LTD. [2015 (3) TMI 1031 - DELHI HIGH COURT] - No transfer pricing adjustment can be made by the TPO by applying SBI base rate. Thus, the appeal of the revenue is dismissed.
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