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TMI Blog2018 (10) TMI 1851X X X X Extracts X X X X X X X X Extracts X X X X ..... for treating the foreign currency loan to be given in INR. Now is a well settled law that a loan given or taken in foreign currency loan, then same has to be benchmarked with reference to the market determined interest rate applicable to the currency loan has to be repaid. See M/S COTTON NATURALS (I) PVT. LTD. [ 2015 (3) TMI 1031 - DELHI HIGH COURT] - No transfer pricing adjustment can be made by the TPO by applying SBI base rate. Thus, the appeal of the revenue is dismissed. - ITA No.:-6702/Del/2015 - - - Dated:- 8-10-2018 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member Department by: None Assessee by: Shri Sanjay Kumar Yadav, Sr. DR ORDER Amit Shukla, J.M. The aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- was made. Interest was determined at ₹ 29,50,652/- and final adjustment was made ₹ 1,87,24,348/-. 3. DRP after considering the entire facts and material on record and the judgments relied upon by the assessee, held that AO did not have any rational basis in proposing the enhancement on account of interest received by benchmarking of international loan transaction undertaken with the AE by the assessee in foreign currency in terms of Rupee lending rate by SBI. After referring to the judgment of Hon ble Delhi High Court in the case of CIT vs. Cotton Natural (I) Pvt. Ltd. 276 CTR 445, DRP held that, once the loan has been given in foreign currency, then arms length interest rate has to be considered at EURIBOR/LIBOR only and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes should not be computed on the basis of interest payable on the currency or legal tender of the place or the country of residence of either party. Interest rates applicable to loans and deposits in the national currency of the borrower or the lender would vary and are dependent upon the fiscal policy of the Central bank mandate of the Government and several other parameters. Interest rates payable on currency specific loans/deposits are significantly universal and globally applicable. The currency in which the loan is to be re-paid normally determines the rate of return on the money lent, i.e. the rate of interest. The loan in question was given in foreign currency i.e US$ and was also to be repaid in the same currency i.e US$. Intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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