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TMI Blog2022 (6) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... national transaction in the case of Cotton Naturals [ 2015 (3) TMI 1031 - DELHI HIGH COURT] As decided in own case [ 2022 (5) TMI 819 - ITAT DELHI] noted that LIBOR with certain markup was to be applied after taking into account the decision of Hon'ble Delhi High Court in case of Cotton Natural (I)(P.) Ltd.[supra] - Following the same, ITAT chose to remit the issue before them to the AO to consider appropriate LIBOR rate plus markup. The ITAT in the said case has taken note that the Ld. CIT(A) has applied LIBOR plus certain basis points on those years. Since IT AT in assessee's own case had earlier remitted the issue to the file of AO with certain directions, we find it appropriate to remit this issue to the file of AO. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to transfer pricing adjustment on international transactions relating to loans advanced to the subsidiary company. The assessee has offered rate of interest of 3.5% but AO chose to apply 13.87%. The order of AO in this regard may gainfully refer hereunder:- 4.3 A show cause notice was issued on 26.12.2014 as to why an adjustment, on lines of adjustment made in the order issued under section 92CA(3) for the assessment year 2010-11 on account of transfer price on the international transaction relating to the loan advanced to the subsidiary company in this year should not be made in the assessment year 2012-13 as well considering the fact that neither there has been any change in their international transaction with the subsidiary nor th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the banks who lend money in the normal course of business, addition of 200 basis points was made to the interest rate of 12.37% thus bring the overall interest rate to 13.87%. In view of the aforesaid similar adjustment was made by the Ld. AO in the AY 2011-12. It is respectfully submitted that the addition made by the Ld. TPO for AY 2010-11, taking the interest rate as 13.897% instead of 3.5% as considered by the assessee is not in the right spirit of law. 4.5 However, the submissions of the assessee are not acceptable as there is no change in the nature of transactions and terms conditions, hence the addition as made in the assessment years 2010-11 and 2011-12 needs to be followed in the current year as well. 4.6 In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. ACIT vide ITA No. 5636/Del/2011, the grounds of appeal are allowed. We may gainfully refer relevant part of the Ld. CIT(A)'s order as under:- 3.2 I have carefully considered the order of Ld. TPO for the AY 2010-11, the assessment order and the submissions of appellant. It is seen that TPO determined arm's length interest at an amount of Rs. 2,46,79,156/- on the amount of loan in Indian Rupee to the AE (which is Rs. 17,79,31,914/-. An adjustment of Rs. 62,27,617/- (@ 3.50%) had already been offered by the appellant as notional interest income in its computation of income. Therefore, the Ld. AO has held that the balance amount of Rs. 1,84,51,539/- is required to be adjusted and added as income in the appellant's case for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the issue is covered in favour of the assessee by assessee's own case for earlier years. Upon careful consideration, we note that in the present case, the assessee has offered rate of interest of 3.5% on international transaction of loans advance to its AE. How this rate has been arrived at is not specified. AO has considered the same @ 13.87%. which was done on the basis of addition of 200 basis point on the interest rate of 12.30% being Indian bank, SBI Prime Lending Rate. We note that Hon'ble Delhi High Court has disproved the comparison with prevailing rates in Indian banking system for international transaction in the case of Cotton Naturals (supra). 7. Similar issue in assessee's own case travelled with IT AT fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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