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2019 (6) TMI 530 - AT - Income TaxTP Adjustment - interest on loans advanced to Associated Enterprise (AE) - adjustment u/s 92CA(3) - Appellant has charged interest at 6 months LIBOR + 400 bps on the advances given to the AE after considering the internal CUP - HELD THAT:- As decided in assessee's own case [2015 (11) TMI 741 - ITAT MUMBAI] and [2016 (6) TMI 636 - ITAT MUMBAI] has accepted floating rate of LIBOR +2% for bench marking. It has been duly submitted that AE has raised finance at LIBOR +350bps which has not been controverted by T.P.O. DRP also has discussed and rejected the rate of loan taken by the assessee from SBI. But it has not dealt with assessee’s submission that AE itself has raised finance in foreign country on LIBOR+350 bps. Accordingly the rate adopted of LIBOR+400 bps in the present case is adequate on the fact and circumstance of the case and precedents referred above. The assessee succeeds on its alternative ground also. DRP has given a direction that the period computed by the TPO for application of interest on loan was to be verified and interest was to be computed for the actual period the loan was outstanding. A.O./TPO has failed to address this issue. So the amount of adjustment made by the A.O./TPO being erroneous is not sustainable. - Decided in favour of the assessee. Non grant of credit of dividend distribution tax - additional ground raised - HELD THAT:- We find that both the above grounds were not raised before the D.R.P. The issues raised cannot be made to be a part of appeal before the ITAT. Nevertheless on the touchstone of the Hon’ble Apex Court decision in the case of CIT v/s. Shelly Products [2003 (5) TMI 4 - SUPREME COURT] we direct that the A.O. may consider the issue raised as per law and factual verification.
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