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2. The first issue to be decided in the appeal of the revenue is as to whether the ld CITA was justified in directing the ld TPO to compute the Arm's Length Price (ALP) by adopting LIBOR rates to benchmark the receipt of interest by the assessee from its Associated Enterprise (AE) without determining the spread on account of risk adjustment to be applied over and above the LIBOR rate in the facts and circumstances of the case.

3. We have heard the rival submissions and perused the materials available on record. We find that the assessee company is engaged in the business of Information Technology Enabled Transaction Processing Services. We find that the assessee had extended loan to First Ring Inc. US (FR US) and Firstsource Business Process Solutions, USA (FBPS) (i.e AEs) on which interest was charged at the rate of 6% and 7.50% per annum respectively. These loans were sourced in foreign currency and loans were also provided in foreign currency i.e US Dollars. The loan amount outstanding as on 1.4.2009 in respect of FR US was USD 17453676 and loan amount outstanding as on 1.4.2010 in respect of FBPS was USD 9267755. On 31.12.2009, FR US merged with FBPS. During the financial year 2010-11, the entire loan was repaid by FBPS to assessee company. We find that the assessee had submitted that the loans to the AEs were provided from its own funds sourced in US Dollar in as much as during September 2004, there was a capital infusion in the M/s. Firstsource Solutions Ltd., assessee company amounting to Rs 1619 million made by a shareholder and that a part of this capital infusion from shareholder has been given as loan to the AEs. We find that the assessee had stated that the loan was given by the assessee to its AE to acquire Accounts Solutions Group, LLC (ASG) which is a subsidiary of the AE. It was also stated that the business of ASG was into debt collection and the very purpose of acquisition of this entity was to partly shift the business of debt collection of all the clients from US to India with a view to move business and profits into India. It was pleaded accordingly that this acquisition had only enhanced the long term benefits of higher profits for the company in India. The assessee pleaded that interest rates to be used in benchmarking foreign currency loans should be the international rate relevant to the currency in which the loan is denominated. The assessee further submitted that in its own case for Asst Year 2007-08, the ld CITA had allowed to use the LIBOR rate as benchmarking rate for determination of ALP for calculating the interest on the loan. Thus it was submitted that interest charged by the assessee at the rates of 6% and 7.50% from its two AEs was much higher than the corresponding Arm's length LIBOR of 2.79% being average of 6 months USD LIBOR plus 200 basis points for the financial year 2009-10. Accordingly, the assessee pleaded that the interest received from its AEs were considered to be at arm's length.

3.2. We find that the ld CITA by appreciating the fact of availability of own funds with the assessee for providing loans to its AEs and by placing reliance on the decision of Hon'ble Jurisdictional High Court in the case of Tata Autocomp Systems Ltd reported in (2015) 56 taxmann.com 206 (Bombay) and the decision of the Hon'ble Delhi High Court in the case of Cotton Naturals (I) (P) Ltd reported in (2015) 55 taxmann.com 523 (Delhi), held that LIBOR rates should be adopted to benchmark the receipt of interest by the assessee from its AEs. The ld CITA also observed that in the assessee's own case, the ld TPO himself had adopted LIBOR rate as the benchmark for determination of ALP of receipt of interest on loans. Accordingly, the ld CITA allowed the claim of the assessee and directed the ld TPO to delete the ALP adjustment made in the sum of Rs 3,29,66,045/-.

3.3. We find that this issue is squarely covered by the decision of this tribunal in assessee's own case for the Asst Year 2008-09 in ITA No.1725/Mum/2014 dated 27.6.2017 wherein it was held :-

3.4.We have heard the rival submissions and perused the material before us. We find that the assessee had advanced loan to its AE in US Dollar,that it had charged interest @ 6%-7.5% per annum that the LIBOR rate as on last date of 2008 was 2.49%, that the AE of the assessee had taken loan from a third party namely ANB and Amro Bank Ltd., that the bank had charged LIBOR +200 bps, that the assessee had benchmarked the transaction accordingly, that in the subsequent AY.(AY 2012-13),the M/s. Firstsource Solutions Ltd., AO himself had made no adjustment on account of interest rate transaction even though the facts and circumstances were identical to the facts to the year under appeal. We also find that in the cases, relied upon by the assessee, the Tribunal has taken a consistent view that LIBOR+ 200bps or 300bps interest rate has to be considered arm's length rate of interest.In the case under consideration after adding 300 bps the rate would come to 5.49 %,whereas the assessee has charged 6%/7.5% interest from its AE thus, there was no justification for the FAA to uphold the order of the TPO/AO who had charged interest @14.39%.Therefore,reversing the order of the FAA,we decide third Ground of appeal in favour of the assessee .