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17.16 Further, we would like to submit that considering the trade receivables as loan or advance given to AEs is not correct as per law, without prejudice to our above arguments even if the receivables are considered as loan or advance given to AE then the interest rate that to be charged shall not exceed average Libor rate existing at that period.
17.17 The similar view has been upheld by the Hon'ble Rajasthan High Court in the case of CIT vs Vaibhav Gems Ltd [2017] 88 taxmann.com 12 (Rajasthan) wherein the Hon'ble High Court held that "10. Regarding LIBOR rate plus 2% on account of interest free loans provided by the appellant to its associated enterprises, in the view of the observations made by the Delhi High Court in para no.14 as reproduced above, the same is required to be answered in favour of the assessee.
17.18 Therefore, based on the above se decision even if your goodself consider the trade receivables as a separate international transaction, we pray your good office to consider average LIBOR rate for calculation of interest.
17.19 The similar view has been upheld in the recent case Open Text Corporation India (P.) Ltd Vs ITO [2021] 127 taxmann.com 399 (Hyderabad - Trib.) wherein the Hon'ble ITAT held that :
"2. The assessee's sole substantive grievance pleads that the learned lower authorities have erred in law and on facts in making Arm's Length Price (ALP) adjustments of Rs. 7,32,48,576/- pertaining to interest on receivables qua its international transactions with the overseas Associated Enterprise (AE). Suffice to say, it transpires at the outset that we need not dwell deeper qua the relevant facts pertaining to the instant issue. We find that assuming but not accepting the learned lower authorities have rightly found the assessee's interest receivables as beyond the period involving uncontrolled transactions, the impugned adjustment is not liable to be sustained for the sole reason that the same has been made not as per LIBOR rate applicable in case of international loans but after taking State Bank of India's prime lending rate @14.75% in the Transfer Pricing Officer's (TPO) order and upheld to that @ 4% to 9.25% as applicable in case of the very bank's domestic short term deposits involving 7 - 554 days; as the case may be.

40. In our considered opinion, the submission of the assessee that LIBOR+200 points require to be applied, cannot be upheld in these facts of the case , as it will amount to shifting of profit from assessee to its AE, which cannot be countenanced under Chapter X of the I.T. Act. Moreover, the rate of interest on loan transaction ( LIBOR + points ) cannot be equated with delayed receipt of the outstanding amount by assessee from its AE, as both stands on different premises having different purpose and nature. In fact if outstanding receivable are due for a longer period, then assessee would be required to deploy more resources either in the form of debt/equity to meet out the cash flow/working capital requirements.

The 5th judgment relied upon by the assessee is in the case of GSS Infotech Ltd vs. ACIT reported in (2016) 70 taxmann.com 356 (Hyd.Trib). This judgement pertains to the A.Y 2010-11. This judgment is also not applicable for the simple reason, that there is a change in law which was brought into by the Finance Act, 2012 and therefore, the Tribunal did not have the benefit of examining the interest on the receivables.

The 6th judgment relied upon by the assessee is in the case of CIT vs. Vaibhav Gems Ltd reported in (2017) 88 taxmann.com 12 (Raj.). In this case, the Hon'ble Rajasthan High Court after relying upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Cotton Naturals (I) Pvt. Ltd (2015)231 Taxmann.com 401 had allowed the applicability or LIBOR+200 points interest free loan provided by the appellant to its AEs. In the present case, admittedly, the case is not pertaining to the loan transactions given by the assessee to its AEs. However, in the present case, there is a delay of receiving consideration from the AEs and the total amount due to the assessee from the AEs is more than 60% of its total turnover. Therefore, the LIBOR+200 points rate cannot be applied to a transaction where the cases of delay in receivables from the AEs. Hence, the above judgment is also not applicable.