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2017 (9) TMI 1737 - AT - Income TaxTPA - interest charged on loans advanced to its foreign subsidiary companies u/s 92CA(3) - LIBOR rate adoption - Held that:- In the instant case the assessee had advanced the sums on of it’s 100% foreign subsidiary for increasing the business and to improve the brand image of the company. The loans were for purely business purpose. Hon’ble Delhi High Court in the case of Cotton Naturals [2015 (3) TMI 1031 - DELHI HIGH COURT]held that LIBOR should be adopted in outbound loans. The assessee has established the fact that the loans were given for the purpose of carrying on the business and to build the brand image globally and there is no intention of earning interest. Therefore, we hold that the interest charged by the assessee @ 2% which is more than LIBOR rate is reasonable and at arms length. Accordingly, we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue.
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