9911796707
TMI Blog2015 (12) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has raised following ground of appeal in A.Y. 2007 - 08: Addition on account of notional interest for Share Application Money paid to AE. 1. The learned CIT (A) erred in law and on facts in upholding addition/adjustment to income being ALP/ notional interest on advance share application money given, even though there is no income from AE to which transfer pricing provisions can be applied. The reasons given by him for doing so are wrong , contrary to the facts of the case and against the provisions of law. 2. The learned CIT (A) erred in law and on facts in confirming the treatment of the advance for Share Application Money (ASAM) against which eventually shares are allotted as interest free loan without proving it as loan under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant craves the leave to add, amend or alter all or any of the grounds of Appeal. 4. The grounds raised by the revenue in A.Y. 2007 - 08 are as under: 1. The learned CIT (A) erred on facts and in law in deleting he addition of Rs. 92,78,558/- made by applying Arms Length Price based on the domestic PLR by Transfer Pricing Officer/Assessing Officer without properly appreciating the factual and legal matrix of the case as clearly brought by the Transfer Pricing Officer/Assessing Officer in the Assessment Order. 2. The learned CIT (A) erred on facts and in law and by holding that LIBOR should have been accepted by the TPO/AO as most suitable bench for determining the ALP in case of foreign currency loan without appreciating the fact that do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in the case of M/s PMP Auto Components (P) Ltd. vs. DCIT in ITA No. 1484 & 1506/Mum/2014 dated 22.08.2014. He submitted that in that case, shares were allotted after one year and it was held by the tribunal that it was abnormal delay and therefore, arm's length interest to be added. He submitted that in the present case, the shares were allotted on 29.03.2010 i.e. after more than 3 and half years from the date of agreement on 01.08.2006 and therefore, this tribunal order should be followed in the facts of the present case. 8. In the rejoinder, it was submitted by the learned AR of the assessee that in Para 18 of that tribunal order relied upon by the learned DR, it is noted that the assessee has failed to bring on record any evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case. 10. Now, we examine the applicability of the tribunal order rendered in the case of Bharti Airtel limited vs. Addl. CIT (Supra). In that case, the money was advanced to AE foreign subsidiaries as share application money as in the present case and shares were allotted after 13 to 16 months as against 42 months in the present case. In Para 47 of this tribunal order, the tribunal has considered this argument also that there is delay in allotment of shares. The tribunal stated that since the TPO has not brought on record anything to show that any unrelated share applicant was to be paid any interest for the period between making the share application money payment and allotment of shares, the very foundation of impugned A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unrelated share applicant was to be paid any interest for the period between making the share application money payment and allotment of shares. Therefore even for this delay in allotment of shares also, the very foundation of impugned ALP adjustment is devoid of legally sustainable merits. Hence, by respectfully following this tribunal order, we hold that the impugned ALP adjustment is devoid of merit and therefore deleted in both years because it was agreed by both sides that facts on this aspect are identical in both years. 11. In the result, both the appeals of the assessee are allowed. 12. Regarding the appeal of the revenue, we find that in view of our decision in respect of the appeal of the assessee in above Para as per which, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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