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TMI Blog2018 (1) TMI 1604X X X X Extracts X X X X X X X X Extracts X X X X ..... see has justified the ALP not only on the basis of SBI PLR, which was at 12.26% for the year under consideration, but also from the data from NSDL website in which average coupon rate ranged from 0.50% to 16.50% with an arithmetic mean of 12.50%. These rates were already before the TPO. Therefore, we are of the opinion that there is no need to restore the matter to the file of the AO for reexamination, when assessee has justified the issuance of CCDs at 12%. We are of the opinion that the rate at which the CCDs were given are within the range, therefore, no further addition can be considered under the TP provisions. In view of that, the addition so made is deleted and grounds of the assessee. - Smt. P. Madhavi Devi, Judicial Member AND Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtible Debentures ('FCCDs') as foreign loan for benchmarking the international transaction of interest payments on FCCDs and the Hon'ble Dispute Resolution Panel ('DRP') has further erred in upholding the action of Ld. TPO/Ld. AO. 4 On the facts and in the circumstances of the case and in contrary to law, the Ld. TPO/Ld. AO erred and subsequently Hon'ble DRP further erred in upholding the action of Ld. TPO 1 Ld. AO by not appreciating the fact that FCCDs were issued in Indian Rupees and also consumed in India and the interest on FCCDs should be benchmarked using State Bank of India ('SB1') Prime Lending Rate ('PLR') instead of London Inter-Bank Offered Rate ('LIB OR') rate. 5 The Ld. TPO/Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be categorized as a loan and LIBOR cannot be considered for determining the ALP of the international transaction of interest on FCCD. 8 The Ld. AO has erred in levying interest under section 234B and 234D of the Act. 9 The Ld. AO had issued a notice of demand under section 156 of Act, the Appellant humbly requests before your Hon'ble members to exercise the powers vested under section 220(3) and 220(6) of the Act and grant extension for the stay of the balance impugned tax demand, till the appeal is disposed by the Hon'ble members . 2. The learned Counsel for the assessee submitted that similar set of facts have arisen before this Tribunal in the case of Adama India Pvt. Ltd in ITA No.497/Hyd/2016 and therefore, the issue is cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that issuance of CCD is part of FDI being quasi-equity in nature and considering the same as a loan would be completely against regulations laid by DIPB, RBI and FEMA. It is to be reiterated that issuance of CCDs was denominated in Indian Rupees and not foreign currency. Therefore, TPO has erred in considering LIBOR as benchmark rate which is in complete contradiction to the principles on the issue. The following judicial precedents supports that the rate interest has to be considered in the currency in which loan has originated: i. India Debt Management Pvt. Ltd., IT(TP)A No. 7518/Mum/2014; ii. CIT Vs. Cotton Naturals (I) Ltd., ITA No. 233/2014 (Del.HC); iii. M/s. Brahma Center Development Pvt. Ltd., Vs. ITO, ITA No. 373/Del/2016 (ITAT D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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