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TMI Blog2021 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... n that it is reasonable on facts and also permissible under law to include 300 points basis while calculating the interest rate. Further, in view of the fact that the variance does not exceed 5% for the FCCDs issued during the FYs 2008-09 and 3% for the FCCDs issued subsequently interference by the Ld. TPO with the value of the international transaction. The addition, therefore, cannot be sustained and shall be directed to be deleted. We accordingly direct the learned AO/TPO to delete the same - we direct the Assessing Officer/TPO to delete the impugned adjustments. - Decided in favour of assessee. - ITA Nos. 7028, 7029 and 7030/DEL/2017 - - - Dated:- 22-2-2021 - N. K. Billaiya, Member (A) And Suchitra Kamble, Member (J) For the Appellant : Sanjiv Sapra, FCA For the Respondents : Surender Pal, CIT-DR ORDER N. K. Billaiya, Member (A) The above three separate appeals are preferred by the assessee against the assessment order dated 23.10.2017 framed u/s. 144C r.w.s. 153C of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] pertaining to A.Ys 2012-13, 2013-14 and 2014-15. 2. Since common issue is involved in all the above thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking SBI PLR as arm's length interest rate because no one would lend at less than this rate. e) And for administering the costs assessee has not explained and justified that it has incurred tiny extra cost or made any extraordinary effort. f) The main thing to be noted is that AE is making such huge investment in assessee's business and undertaking big risk, which again substantiates that the assessee has very good credibility. 7. The aforementioned observations of the TPO were also heavily relied upon by the ld. DR during the course of his submissions. On the basis of the aforementioned observations, 300 basis points over and above base rate PLR was disallowed and differential interest amount was added in the captioned A.Ys and the same can be understood from the following chart: S. No. Assessment Year Interest rate as per Amount of interest payable Rate of Interest Different ial rate of Amount of Interest Differential amount of 1 2012- 13 FCCDs of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest as per TPO/AO to be adjusted and added was 3.75% which was within the permissible range of 5% as permitted by second proviso to Section 92C(2) of the Act. It is also relevant to point out that the percentage of 3% in the aforesaid proviso has been inserted by the Finance Act, 2012 w.e.f. 01.04.2013 and prior to that amendment, this percentage was at 5%. In the present case, since the difference is less than 5%, therefore, no addition on account of arm's length price could have been made by the AO/TPO. As such on merit also, no addition could have been made. 14. Therefore, in view of the above finding of a coordinate bench of this Tribunal in assessee's own case for the immediately preceding years, we are of the considered opinion that the issue is no longer res integra and this bench is required to follow the same in the absence of any change of circumstances. No change of circumstances is pleaded before us. We, therefore, while respectfully following the above decision, reach a conclusion that it is reasonable on facts and also permissible under law to include 300 points basis while calculating the interest rate. Further, in view of the fact that the varianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's @ 17.75% as issued during FY 2011-12(Note 2) 17.75% 141,432,000.00 14.75% 3.00% 117,528,000.00 23,904,000 Total 518,131,382.00 411,093,499.90 107,037,882. 12. On the basis of the aforesaid facts, the co-ordinate bench in ITA No. 7022/DEL/2017 and others had considered this issue and held as under: 27. On merit also, the AO/TPO made the addition on account of differential rate of interest on FCCDs. The assessee applied the interest rate on the basis of SBI PLR rate plus 300 basis points for the reasons that the FCCDs being unsecured and hybrid/quasi equity instrument as compared to plain vanilla loan instrument. Therefore, the SBI PLR plus 300 basis points over it was reasonable and on the arm's length, particularly when the same was permissible under Foreign Exchange Control Regulations. The AO/TPO, however, restricted the interest rate to 12.25%. The variance in the rate of interest as per T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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