TMI Blog2021 (1) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee : Sh. Atul Ninawat, AR For the Revenue : Sh. Surender Pal, CIT DR. ORDER Per Dr. B.R.R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order dated 31.07.2017 passed by the AO u/s 254/143(3) r.w.s. 144C of the Income Tax Act, 1961. 2. Following grounds have been raised by the assessee: 1. The order of the learned Assessing Officer ( Ld. AO ) is bad in law and on the facts and circumstances of the case. 2. The Ld. Transfer Pricing Officer ( Ld. TPO )/ Ld. Assessing Officer ( Ld. AO ) have erred on facts and circumstances of the case in determining the arm s length price of the appellant s international transaction with its associated enterprises in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ends of justice, and, accordingly, direct the Ld. TPO to re-compute the notional interest at US LIBOR plus 170 basis points. Grounds of appealare, accordingly, allowed in part. 7. Further, we find that an identical issue having similar facts was a subject matter of the assessee s appeal in ITA No. 6076/Del/2016 dated 06.12.2019 for the assessment year 2004- 05, the relevant findings have been given in para 7 to 12 which read as under: 7. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 8. At the very outset, ld. AR for the taxpayer contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rupee vis - vis the foreign currency. The assessee in the present case is not the borrower, but the lender. Transaction cost is not, therefore, applicable in the case in question, as the loan had to be repaid in US Dollars. Mark up towards the transaction cost is exorbitant and even comparison with banks is unsound and unintelligible. Risk factor adjustment is also stretched, for it ignores the close relationship between the two AEs and the funds were the shareholder funds, and not borrowed money. 10. Similarly, Hon ble Rajasthan High Court in CIT vs. M/s. Vaibhav Gems Ltd. (supra) also decided the identical issue in favour of the taxpayer by holding that the taxpayer is entitled for the benefit of average LIBOR rate existing at tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any way disturbed in any subsequent proceedings. 10. In the circumstances, we are of the considered opinion that the LIBOR with mark up cannot be found fault with, having regard to the facts of the case of the assessee. However, we find that the mark up of 500 basis points to the US LIBOR appears to be unjustifiable. We consequently, accept the alternate plea of the assessee and find that the bench marking of the interest on loan at US LIBOR plus 170 basis points would meet the ends of justice, and, accordingly, direct the ld. TPO to re-compute the notional interest at US LIBOR plus 170 basis points, Grounds of appeal are, accordingly, allowed in part. 12. In view of the facts and circumstances of the case discussed in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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