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2017 (3) TMI 191 - AT - Income TaxTPA - loans and share application money advanced by the assessee to its AE - ALP of international transaction of interest-free loans and share application advanced by the assessee to its AE by applying net margin of 2.3% - Held that:- We have observed that the Hon’ble Bombay High Court in the case of CIT v. Tata Autocomp Systems Limited (2015 (4) TMI 681 - BOMBAY HIGH COURT) has held that in case the tax-payer advances loans to its AE in Germany , then rate of interest for TP purposes shall be applied based upon the rates prevailing in the Germany where loans are consumed. Thus we hold that the rates applied by the authorities below based on net margin on borrowing costs of the assessee to compute ALP of international transactions of the assessee in granting interest-free loans and share application money cannot be sustained and the matter is set aside and restored back to the file of the A.O. for de-novo determination of the ALP of international transaction of assessee with AE on merits w.r.t. to loans and share application money advanced by the assessee to its AE
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