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TMI Blog2019 (9) TMI 1684X X X X Extracts X X X X X X X X Extracts X X X X ..... TPO bench marked the interest on loan at SBI PLR plus 300 basis points, whereas, Ld. DRP, while following their own finding for the AY 2002-03 made it US LIBOR plus 500 basis points. It is not the case of the assessee that the facts involved in the matter are different from those involved for the AY 2002-03. It is not the case of the assessee that the findings of the Ld. DRP for the AY 2002-03 are in any way disturbed in any subsequent proceedings. Thus LIBOR with mark up cannot be found fault with, having regard to the facts of the case of the assessee. However, we find that the mark up of 500 basis points to the US LIBOR appears to be unjustifiable. We consequently, accept the alternate plea of the assessee and find that the bench mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per PLR rate @ 10.5% on loans given to the AE and Rs.2,13,02,734/- on account of the software development services. Accordingly, the Ld. AO passed the order dated 26/05/2010. 3. Aggrieved by the said draft order, the assessee filed objection before the Ld. DRP. Ld. DRP by order dated 17/05/2010 confirmed the said adjustments. The assessee, therefore, preferred an appeal to the ITAT set-aside the issue relating to the adjustment of Rs.1,46,12,770/- on account of notional interest @10.5% loan to the Ld. TPO/AO to recompute the ALP based on CUP method. 4. Subsequently, by order dated 27/01/2016, Ld. TPO suggested an adjustment of Rs.3,43,23,624/- comprising of Rs.1,83,82,474/- by benchmarking the interest on loan @ SBI PLR +300 basis p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rate' and therefore, the LIBOR rate without any mark-up is applicable only to the banks inter se and not to the non-banking entities. He further submitted that in the case of Cotton Naturals, it was held that where the transaction was of lending money in foreign currency to its foreign subsidiary the comparable transaction was of foreign currency lending by unrelated parties and the financial position and the credit rating of subsidiaries will be broadly the same as the holding company. While referring to the decision in Hinduja Global Solutions (supra), Ld. DR submitted that in that case as on 31/03/2008, the LIBOR was 2.49% against which the assessee had charged interest at 6% which is much higher than the corresponding Arm's Leng ..... X X X X Extracts X X X X X X X X Extracts X X X X
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