Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (10) TMI 1621 - AT - Income TaxTP Adjustment - interest rate for loan advanced to foreign subsidiary by Indian company - HELD THAT:- We find that there is no dispute that the interest paid by the assessee on ECB is within the range of interest payment sanctioned by RBI in its master circular being LIBOR + 500 basis points. As per two tribunal orders cited by ld. AR of assessee, it was held that this is a valid basis to determine the ALP of interest payment on ECB. Regarding judgment of in the case of CIT vs. Cotton Naturals (I) (P.) Ltd [2015 (3) TMI 1031 - DELHI HIGH COURT] cited by ld. DR of revenue, we find that as per this judgment also, interest rate for loan advanced is to be determined as per market rate applicable on the basis of interest payable on currency in which the loan has to be repaid. In the present case, loan has to be repaid in EURO and therefore, EURIBOR + 500 basis points is proper for determining the ALP of interest payment as per this judgment also. Thus the revenue gets no help from this judgment rather this judgment of Hpn’ble Delhi High Court supports the case of the assessee. Hence we delete the addition made by the AO and TPO. Appeal filed by the assessee is allowed.
|