TMI Blog2015 (7) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the rupee loans would not be a relevant comparable. Therefore, the PLR applied by the TPO was found to be untenable. Following the ratio of the decision Hon’ble Delhi High Court in the case of Cotton Naturals Ltd. (2015 (3) TMI 1031 - DELHI HIGH COURT), in the present case we find no reason to uphold the application of SBL PLR on rupee loan as a benchmark to compare the interest rate on loan advanced by the assessee to its Associated Enterprise in foreign currency. As the loan in the instant case has also been given in foreign currency i.e. US $, therefore, we find no infirmity in the assertions of the assessee that the interest rate charged at LIBOR + 300 bps is liable to be considered as an Arm’s Length rate of interest. As a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced a loan of US $ 6.60 million to Synergies Corp. USA, an Associated Enterprise. Being an international transaction within the meaning of section 92B of the Act, income therefrom was liable to be assessed having regard to its ALP as mandated by section 92(1) of the Act. The assessee company had charged interest from its AE @ LIBOR + 300 bps. The AO however, determined the income on account of interest chargeable from the AE by applying a rate of 11.75% being the State Bank of India (SBI) Prime Lending Rate for domestic loans. The assessee had charged interest @ 4.74% for the period April 2009 to Sept. 2009 and @ 3.62% for the period of October, 2009 to March 2010, which were rates equivalent to LIBOR + 300 bps. As against the interest inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.3869/Del/2012 2002-03 to 2008-09 LIBOR 4. TTK Prestige Ltd. ITA No.1257/Bang/2011 2005-06 LIBOR 5. M/s.Hinduja Global Solutions Ltd. 145 ITD 361 (Mum) 2009-10 LIBOR 6. Micromax Informatics Ltd. ITA No.6135/Del/2014 2011-12 L IBOR 7. M/s. Bhansali Co. ITA No.825/Mum/2014 2009-10 LIBOR + 2% 8. M/s. Everest Kanto Cylinder Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned @ 4.75% being Prime Lending Rate (PLR) on rupee loans at the relevant point of time. The action of the TPO resulted in an adjustment of ₹ 2,71,83,716/- to the interest income accounted for by the assessee. The plea of the assessee is that the LIBOR + 300 bps rate of interest charged by the assessee is Arm s Length rate of interest and no further adjustment is required. 6.1 The Hon ble Delhi High Court in the case of Cotton Naturals Ltd.(supra) was considering a dispute relating to computation of ALP vis- -vis interest chargeable on loans advanced to a foreign subsidiary Associated Enterprise. The issue before the Hon ble High Court related to determination of ALP of interest charged by an Indian Company on the loan advanced by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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