TMI Blog2014 (1) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of rule 8D are applicable w.e.f. AY. 2008-09. prior to that, reasonable amount has to be deducted - The assessee has voluntarily made dis-allowance to the tune of Rs. 9,12,24,848/- on account of expenditure on interest - The assessee has not made any dis-allowance on management expenses in handling of portfolio - The assessee must have been incurring expenditure in managing portfolio of such a magnitude - the assessee must have spent Rs. 2 Crores in managing the investment portfolios - addition to the tune of Rs. 2 Crores is confirmed – Decided partly in favour of Assessee. - I.T.A. No. 2161/Mds/2011 - - - Dated:- 27-6-2013 - Dr. O.K. NARAYANAN AND VIKAS AWASTHY, JJ. For the Appellant : V. Jayaram. For the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of granting loan by Standard Chartered Bank (Mauritius) Ltd., was 29-08-2006 and the rate of interest was LIBOR + 3%. In order to determine the exact interest rate of the un-controlled transaction as on the date of controlled transaction i.e., 15-06-2006, LIBOR as on 15-06-2006 was adopted. On the LIBOR rate, 3% margin charged by the third party i.e., Standard Chartered Bank (Mauritius) Ltd., (SCB), was added to arrive at the Arm's Length interest rate. The calculations have been made on the assumption that had the loan has been granted by Standard Chartered Bank on 15-06-2006, that is date of controlled transaction, the effective date would have been the LIBOR as on 15-06-2006 + 3%. The ALP was computed by the assessee as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s come in appeal before us assailing the assessment order dt. 24-12-2010. Shri V. Jayaram on behalf of the assessee submitted that as regard the rate of interest, the case of the assessee is squarely covered by the order of the Tribunal in the case of Siva Industries Holdings Ltd. (ITA No. 2148/Mds/2010 AY. 2006-07) decided on May 20 th , 2011, wherein the Tribunal has held that in international transactions, domestic prime lending rate would not be applicable and the international rate fixed being LIBOR would come into play. The ld. Authorised Representative (AR) has placed on record a copy of the order dt. 20-05-2011 of the co-ordinate bench of the Tribunal. As far as second issue relating to dis-allowance of expenditure u/s. 14A is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te fixed being LIBOR would come into play. In the circumstances, we are of the view that it LIBOR rate which has to be considered while determining the arm's length interest rate in respect of the transaction between the assessee and the Associated Enterprises. As it is noticed that the average of the LIBOR rate for 1.4./2005 to 31.3.2006 is 4.42% and the assessee has charged interest at 6% which is higher than the LIBOR rate, we are of the view that no addition on this count is liable to be made in the hands of the assessee. In the circumstances, the addition as made by the Assessing Officer on this count is deleted". The case of the assessee is squarely covered by the order of the co-ordinate bench of the Tribunal wherein the London Int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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