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2021 (2) TMI 1317 - AT - Income TaxTP Adjustment - applying LIBOR + 2% interest rate on the monthly closing balance of advances to subsidiaries during the period relevant to the assessment year under appeal - HELD THAT:- Both sides are unanimous in stating that the nature of transaction of advancing loans by assessee to its overseas AEs is identical to the one as in assessment year 2007-08. Co-ordinate Bench after considering the issue in detail held that advancing of loans to AEs is an international transaction and as regards determination of interest rate, Tribunal held that LIBOR +2% on monthly closing balances of advances be applied for transaction to be at arm’s length. Hon'ble Bombay High Court [2017 (6) TMI 1087 - BOMBAY HIGH COURT] in Income Tax Appeal No. 1869 of 2014 Tribunal was justified in directing the Assessing Officer to determine the Arm’s Length interest by considering the LIBOR (London Inter Bank Operative Rate) plus 2% on the monthly closing balances of the advances The Hon’ble High Court upheld the findings of the Tribunal on this issue and dismissed the appeal of Revenue. Since the issue has now been settled by the Hon’ble Jurisdictional High Court in favour of the assessee, we find no infirmity in the order of CIT(A), hence, the same is upheld, ergo, the appeal of Revenue is dismissed sans merit.
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