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3.1 That the assessing officer / DRP erred on facts and in law in disregarding the fact that the loan was advanced by the appellant to its associated enterprise in foreign denominated currency and accordingly, loan available in the international market with interest rate computed considering Libor rates shall be applied for benchmarking.

3.2 Without prejudice, the assessing officer / TPO erred on facts and in law in not giving effect to the directions of the DRP to consider Base Rate of SBI for computing the arms length rate of interest and instead considering PLR of SBI.

20. The Ld. DR for the Revenue fairly pointed out that the prime lending rate of foreign loans could not be applied but LIBOR rate is to be applied alongwith basis point.

21. We find that the issue raised vide Ground of appeal Nos.3 to 3.6 is in relation to the transfer pricing adjustment made on account of foreign currency loan advanced by the assessee. The assessee had advanced same loan as in the earlier years and had charged interest by applying LIBOR +150 basis point. The Assessing Officer/DRP/TPO however applied the prime lending rate of 14.88%, which was reduced 21 ITA Nos.1308/Del/2015; 4913 & 5026/Del/2018;

7637/Del/2018; 7112 & 1944/Del/2017 to 13.25% finally. However, the case of the assessee before us is that it had advanced foreign exchange loan to its AE and the prime lending rate cannot be applied in such circumstances. We find merit in the plea of the assessee and hold that where the transaction is in foreign currency, then the rate of interest is to be applied is LIBOR plus. In the present case, it may also be pointed out that the loan was advanced after taking permission of the RBI and even the rate of interest was approved. In such facts and circumstances, we find no merit in the orders of the authorities below and hold that no transfer pricing adjustment needs to be made in the hands of the assessee on account of interest on foreign currency loan wherein the assessee himself had charged interest @ LIBOR + 150 basis points. Similar issue has been decided in favour of the assessee in Assessment Years 2008-09 & 2009-10 also. Thus, Ground of appeal Nos. 3 to 3.2 raised by the assessee are allowed.

9. That the TPO/ DRP erred on facts and in law in proposing an addition of Rs. 2,39,616 on account of interest charged on loan given to associated enterprise by applying the interest rate of 3.12% (Libor +150 basis points).

9.1 That the TPO/ DRP erred on facts and in law in failing to appreciate that there was a statutory restriction on the associated enterprise in accruing interest in China when the entity has applied for repayment of loan.

10. That the TPO/DRP erred on facts and in law in proposing an adjustment of Rs. 2,07,66,621 on account of interest on receivables due from associated enterprise by applying interest rate of LIBOR + 400 basis points.