9911796707
TMI Blog2018 (8) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... "[A] Whether the Appellate Tribunal has substantially erred in law in restricting the arms length interest rate on loan from 4.31% to 2.40% for loan given to Associated Enterprise? [B] Whether the Appellate Tribunal has substantially erred in law in deleting the addition of Rs. 3,01,66,650/being Arms length price on corporate guarantee?" [2.0] So far as proposed question No.2[B] is concerned, the same is under consideration by this Court in Tax Appeal No.567/2016. Hence, present Tax Appeal is admitted qua question No.2[B]. [3.0] Now, so far as proposed question No.2[A] viz. Whether the Appellate Tribunal has substantially erred in law in restricting the arms length interest rate on loan from 4.31% to 2.40% for loan given to Associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case. In present case since Associated Enterprise is situated in France it is most appropriate to consider mark up on the basis of average speed over LIBOR charged in France rather than adopting mark up on the basis of average spread over LIBOR charged in whole European region. The average spread charged in France out of analysis carried out by TPO himself is 163 basis point as compared to 273 basis point of whole Europe. The spread over LIBOR would depend on various economic factors of each and every country coming in European region. Further the argument of the appellant company regarding considering internal cup of IDBI bank wherein bank has charged interest @ LIBOR + 100 basis points is not tenable as the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mark up @ 163 basis point on the interest free loan which shall work out @ 5.75%. The assessee gets the relief accordingly." [3.1] The learned ITAT has concurred with the aforesaid. On going through the finding recorded by the learned CIT(A) confirmed by the learned ITAT and considering the fact that the Associated Enterprise was situated in France and therefore, the assessee considered the markup on the basis of the average spread over LIBOR charged in whole European region. The learned CIT(A) as well as the learned ITAT has also considered the submission on behalf of the Revenue that even the condition prevailing in the country was required to be considered as the same has also been dealt with and considered for which necessary observat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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