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2023 (10) TMI 916 - AT - Income TaxTP adjustment - interest received by the assessee from the AEs - domestic PLR rate application - CIT(A) deleted the addition - HELD THAT:- We find that an identical issue has been decided by the Tribunal in assessee’s own case for the assessment year 2010-11 [2023 (2) TMI 1197 - ITAT DELHI] affirming the order of the ld. CIT (Appeals) in deleting the TP adjustment on interest received by the assessee as held that domestic PLR cannot be applied to benchmark the rate of interest charged on foreign currency loans advanced to AEs located in foreign countries. The rate of interest on loans advanced by the assessee to AEs have to be in accordance with the rate of interest prevailing in the country of residence of the AEs wherein the loan was availed. This is the view expressed in case of CIT vs. Cotton Natural (I) Pvt. Ltd. [2015 (3) TMI 1031 - DELHI HIGH COURT] and many other decisions. Therefore, domestic PLR rate cannot be applied in respect of loans advanced in foreign currency to AEs situated in USA and Europe. As regards, the submission of learned Departmental Representative that certain guiding principles laid down by the Hon'ble jurisdictional High Court have not been followed, we are not convinced. Decided in favour of assessee. Disallowance made towards interest paid to subsidiary - HELD THAT:- As decided in assessee own case [2021 (10) TMI 276 - ITAT DELHI] AY 2009-10, deleted addition stating it is true that the loan was given in earlier F.Y and the assessee had sufficient own funds to give the loan. It is equally true that no disallowance was made in the earlier Assessment Year though the DRP 19 has observed that rest judicata is not applicable under Income Tax proceedings but, in our considered opinion, when the facts are same, and the law has not changed, then the rule of consistency ought to have been followed. Decided in favour of assessee. Disallowance u/s 14A r.w.r. 8D - assessee has not earned any exempt income - HELD THAT:- Admittedly there is no dividend income received by the assessee during the year under consideration. Thus, following the decision of Era Infrastructure (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT] we hold that there cannot be any disallowance in the absence of any dividend income earned during the assessment year under consideration by the assessee. The ground raised by the Revenue is dismissed.
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