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| The Tax Publishers2019 TaxPub(DT) 0984 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
ALP of interest charged on foreign currency loan advanced by assessee to its AEs, had rightly been benchmarked by the assessee as per LIBOR and EURIBOR rates, and same could not have been determined as per Indian rate as had been so taken by TPO.
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Transfer pricing - Determination of ALP - Interest on foreign currency loan given to AE -
Assessee had given dollar and euro denominated loan to AE abroad and charged interest at the rate of USD LIBOR plus 5.5%. and EURIBOR plus 1.75%. respectively, However, TPO did not accept the geography of borrower as determining factor for computing ALP of the interest rate charged and used CRISIL credit rating scale for financial year 2008-09 and adopted annualized average yield of bonds of 15.41% to determine CUP of interest rate to be applied for determination of ALP.Held: ALP of interest charged on foreign currency loan advanced by assessee to its AEs, had rightly been benchmarked by the assessee as per LIBOR and EURIBOR rates, and same could not have been determined as per Indian rate as had been so taken by TPO.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 14A
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