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TMI Blog2023 (2) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... n followed, we are not convinced. Considering the fact that the assessment year involved is 2010- 11 and more than 12 years have passed, we are disinclined to restore the issue to the AO at this stage. Thus, having considered the overall facts and circumstances of the case in the light of judicial precedents cited before us, we do not find any infirmity in the decision of learned Commissioner (Appeals). Grounds raised are dismissed. Disallowance of interest expenditure u/s 36(1)(iii) - interest paid to banks on loans utilized for non-business purposes like advancing loan to subsidiaries at a lesser rate - HELD THAT:- It is observed, while considering identical nature of dispute in assessee s own case in assessment year 2009-10, [ 2021 (10) TMI 276 - ITAT DELHI] is true that the loan was given in earlier F.Y and the assessee had sufficient own funds to give the loan. It is equally true that no disallowance was made in the earlier Assessment Year though the DRP 19 has observed that rest judicata is not applicable under Income Tax proceedings but, in our considered opinion, when the facts are same, and the law has not changed, then the rule of consistency ought to have been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forging. As stated by the Transfer Pricing Officer (TPO), assessee was a part of Gripwell Group. 6. During the year under consideration, the assessee entered into various international transactions with its AEs. However, except the transaction relating to interest charged on loans advanced to AEs, the TPO accepted all other transactions to be at arm s length. In so far as charging of interest on loans advanced to AEs. The Assessing Officer found that the assessee had advanced loans to two overseas subsidiaries viz. Uniparts USA Ltd. and Uniparts Europe BV, Netherlands. In respect of loans advanced to subsidiary in USA, the assessee had charged interest @ 8%. Whereas, in respect of loan advanced to Uniparts Europe BV, the assessee had charged interest by applying the rate of Euribor plus 200 basis points (bps), which works out to interest rate at 3.68%. Being of the view that rate of interest charged on loans advanced to AEs are not at arm s length, the TPO issued a show cause notice to the assessee seeking explanation why interest should not be charged at appropriate rate. Though, the assessee justified its benchmarking of interest charged to the AEs, however, the TPO was not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur attention to certain observations made in the aforesaid judgment, learned Departmental Representative submitted, while deleting the addition, learned Commissioner (Appeals) has not taken note of certain guiding principles set out by the Hon'ble jurisdictional High Court. Thus, he submitted, the issue may be restored back to the TPO for fresh benchmarking. 11. Strongly opposing the contentions of learned Departmental Representative, learned counsel appearing for the assessee submitted that the issue is squarely covered by the decision of the Hon'ble Delhi High Court. Hence, there is no justifiable reason to restore the matter back to the TPO. 12. We have considered rival submissions and perused material on record. 13. In so far as factual aspect of the issue is concerned, there is no dispute that the assessee has advanced foreign currency loans to two related parties located in USA and Netherlands. It is also evident, the assessee has charged interest to the concerned parties at fixed rates. In so far as AE in USA is concerned, the assessee had charged interest @ 8%. Whereas, in respect of the AE in Netherlands, interest is charged by applying BURIBOR rate plus 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-business purposes like advancing loan to subsidiaries at a lesser rate, should not be disallowed. Though, the assessee objected to the proposed disallowance, however, rejecting the explanation of the assessee, the Assessing Officer disallowed an amount of Rs.1,41,63,945 out of the interest expenditure. While, considering assessee s appeal on the issue, learned Commissioner (Appeals) deleted the disallowance. 18. We have considered rival submissions and perused material on record. 19. It is observed, while considering identical nature of dispute in assessee s own case in assessment year 2009-10, the co-ordinate Bench in ITA No.1216/Del/2014 dated 30.09.2021 has deleted similar disallowance with the following observations: 26. A perusal of the facts show that on receiving financial assistance from the assessee, revenue from sales of M/s UniLink Engineering Pvt Ltd increased from Rs. 94.73 lakhs from F.Y 2005 06 to Rs. 26.12 crores in F.Y 2008 09. We further find that own funds of the assessee as on 31.03.2007 were at Rs.33.35 crores which jumped to Rs. 127.62crores as on 31.03 2009 and tp Rs.139.17 crores as on 31.03.2009. 27. It is true that the loan was given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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