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The Tax Publishers2020 TaxPub(DT) 3164 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
Assessee had provided short-term loan only for a period of 15 days to AE further assessee's AE in Singapore had availed of loan from SBI, Singapore Branch at interest rate of six months LIBOR plus 250 basis, accordingly, charging interest at LIBOR plus 1.5% was at arm's length requiring no further adjustment.
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Transfer pricing - Determination of ALP - Interest on short-term loan granted to AE -
Assessee advanvced short-term loan for a period of 15 days or thereabout to AE charging interest at LIBOR plus 1.5%. TPO however, did not accept rate of interest charged by the assessee. Adopting the prime lending rate of State Bank of India @ 7.50% and adding a mark-up of 1.50%, determined arms length interest rate @ 9.%.Held: Assessee had provided short-term loan only for a period of 15 days to AE, which was not disputed. Further, assessee's AE in Singapore had availed of loan from SBI, Singapore Branch at interest rate of six months LIBOR plus 250 basis points. Considering this rate of interest charged by assessee was at arm's length requiring no further adjustment.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 92C
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