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2016 (3) TMI 279 - AT - Income TaxTransfer pricing adjustment - TP provisions applicable to capital transactions due to the absence of the income element therein - recharacterisation of investment into loan - Held that:- In the absence of provisions/Rules for re-characterization of investment in share capital into loan and vice-versa, we are of the considered view that the re-characterization of the impugned capital transaction into a loan as sought for by the Transfer Pricing Officer/CIT(A) is not tenable in law in view of the decision of the Hon’ble Bombay High Court in the case of Besix Kier Dabhol SA (2012 (10) TMI 817 - BOMBAY HIGH COURT ), which was followed by the Co-ordinate Bench of this Tribunal in the case of Aegis Ltd.,(2015 (7) TMI 1051 - ITAT MUMBAI) to which one of us is party. In the light of the facts and circumstances of the case as discussed above, we delete (i) the addition made by the Transfer Pricing Officer/CIT(A) on account for alleged excess consideration paid and (ii) addition on account of notional interest computed @15% on the aforesaid sum sought to be re-characterized as a loan. In this view of the matter, the alternate plea of the assessee to reconsider the LIBOR rate for the purpose of computing the addition on account of notional interest becomes academic.
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