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2019 (10) TMI 1563 - AT - Income TaxTP upward adjustment - payment of interest on loan - MAM selection - assessee is engaged in the business of development of residential and commercial complex - HELD THAT:- In the present case, in our opinion, the rate charged by SBI is to be considered as the interest rate that was prevailing in the market and interest rate of 12.5% charged by SBI from M/s SCKPL can be used as comparable in the assessee’s case, since the loan received SBI was advanced to the assessee without any mark-up. M/s SCPKL had borrowed funds from SBI and paid interest @12.5% p.a and charged interest at the same rate without identifying any mark up, since the cost of fund to the related party was only 12.5%. had opined by the TPO and AO to grant loan at a rate below the rate of 12.5% i.e @ 9.5% then there would have been a loss of 3% interest to M/s SCPKL. The cost plus method is the most appropriate method for determination of arm’s length price of the interest on loan and we find no infirmity in the order of CIT(A) and it is justified. Accordingly, we delete the addition on account of transfer pricing adjustment. Appeal of the Revenue is dismissed.
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