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TMI Blog2012 (10) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... India Telecom Holdings Ltd., Mauritius by way of granting a loan – Held 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 Associate Enterprises. As it is noticed that the average of the LIBOR rate for 1.4.05 to 31.3.06 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 Disallowance of TDS credit – Held that:- DRP has observed that in the submissions assessee has not given any basis for TDS claim made by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mds./2010 order dated 20th May, 2011 wherein the Tribunal at page-14, para Nos.7 to 8 of its order held that where the assessee does not have any income, which does not form a part of the total income, no disallowance u/s.14A can be made on the assessee. Ld. AR submitted that following the same as the facts in the present year are also same, the disallowance made should be deleted. 5. Ld. DR, on the other hand, submitted that the decision of the Tribunal was per incurim as the Tribunal failed to take into consideration the decision of Special Bench of the Tribunal in the case of Cheminvest Ltd. v. ITO [2009] 121 ITD 318 (Delhi)(SB) where it was held that disallowance u/s. 14A can be made in the year in which no exempt income has been earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that this issue is covered in favour of the assessee by the order of Tribunal in assessee's own case in the immediately preceding Assessment Year 2006-07 in ITA No. 2148/Mds./2010 order dated 20th May, 2011. Ld. DR also agreed with the submissions of the assessee. 8. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. The brief facts of case are that the assessee has entered into international transaction with its associated enterprises, India Telecom Holdings Ltd., Mauritius by way of granting a loan in Indian Rs. 248.50 crores. As the case was covered under transfer pricing, reference was made to the TPO. The TPO vide order u/s. 92CA(3) dated 28.10.10 suggested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the transaction is an international transaction, then the transaction would have to be looked upon by applying the commercial principles in regard to international transaction. If this is so, then the domestic prime lending rate would have no applicability and the international rate 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 Associate Enterprises. As it is noticed that the average of the LIBOR rate for 1.4.05 to 31.3.06 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Assessing Officer by following the order of the Tribunal for the Assessment Year 2006-07. We find that the Tribunal in the case of the assessee in Assessment Year 2006-07 held as under:- "We have considered the rival submissions. As it is noticed that the remand report has been received by the DRP on 27.08.2010 and the same has not been granted to the assessee for its rebuttal, this issue is restored to the file of the Assessing Officer for re-adjudication. The Assessing Officer shall reconsider the issue of grant of credit for the TDS certificates and if he finds any of them to be defective, he shall give the assessee adequate opportunity to rectify the same and re-adjudicate the issue in accordance with law." We find that the DRP ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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