2019 (6) TMI 1691

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..... the commercial expediency aspect of granting interest-free loans is already against the assessee by a Catena of case laws in this regard. Assessee submission that, commercial rationality should be considered in distinction from commercial expediency is not at all convincing. It is evident from the submissions of the learned counsel of the assessee himself that ITAT as well as honourable jurisdict .....

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..... YAHYA (AM) AND SHRI AMARJIT SINGH (JM) For the Assessee : Shri Shreyas N. Shah For the Department : Shri Aand Mohan ORDER Per Shamim Yahya (AM) : This is an by the assessee for assessment year 2009-10 and another appeal by the revenue for assessment year 2010-11 arising out of respective orders of learned CIT-A for the concerned assessment year. 2. Since the issues ar .....

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..... ld that the annualised rate of 11.96 is adopted as arm s-length interest rate and hence he made an adjustment of rupees 66, 28, 068 5. For assessment year 2010-11 the transfer pricing officer arrived at the rate of LIBOR +950 basis points. Accordingly he held that the reasonable rate of interest should be 9.38%. Hence adjustment of rupees 58,52,296 was made. 6. Up on assessee s appeal for as .....

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..... e tax order charging interest at LIBOR +300 bps should be accepted. In addition learned counsel of the assessee submitted that the rationality of granting the loan should also be considered. That the AE was the start-up company and hence only the assessee could have granted loan as it didn t command any confidence. The learned counsel submitted that commercial rationality should be considered as d .....

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..... 0 bps to 300 bps. In the present case the learned CIT-A has adopted rate of interest of labour +300 bps for assessment year 2010 11 which the assessee accepts. In our considered opinion on the facts and circumstances of the case following the precedent s from ITAT and honourable judicial High Court we hold that arm s-length interest should be computed at the rate of interest of libor +300 bps. T .....

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