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Ground No. 1 to 7: In ground no. 1 to 7 the assessee has challenged the action of the AO in making in upward TP adjustment amounting to Rs. 79,51,087/- in respect of the interest free loan given in earlier years. During the course of appellate proceedings the appellant submitted that the identical issue was involved in AY 2013-14 where Learned Dispute Resolution Panel- 2 Mumbai (DRP) has upheld the transfer pricing adjustment in respect of interest free loan, however, the Panel directed the AO to apply interest rate of LIBOR + 3% as Assessment year 2014-15 Ann's Length Price (ALP) for the loan borrowed by the Associated Enterprise. I have gone through the DRP order I find that since the facts of the case this year is similar to earlier year respectfully following honourable DRP direction in AY 2013-14 the AO is directed to apply interest rate of LIBOR +3% at Arm's Length Price. This ground of appeal is Partly Allowed.

7. Learned counsel‟s armoury, however, is not exhausted. He then invites our attention to a co-ordinate bench decision in the assessee‟s own case for the immediately preceding assessment year and vide order dated 27th July 2020, which, inter alia, holds as follows:

6. In grounds of appeal No. 4 to 6, the assessee has assailed TP adjustment of Rs.77,22,054/- on account of interest on loans advanced to AE. The assesse has purportedly advanced interest free loans to its AE. The TPO in order to benchmark the loan transaction at arm's length applied LIBOR +3% rate of interest. The contention of the assesse is that only LIBOR rate should be applied without any mark-up. We find that the Hon'ble Bombay High Court in the case of CIT vs TATA Autocomp Systems Ltd. (supra) has upheld the order of Tribunal in determining ALP of loans advanced to overseas AE at Assessment year 2014-15 EURIBOR/LIBOR rates without any mark-up. We further observe that in the immediately preceding assessment years, the TPO had made similar adjustments qua interest on loans advanced to AE. The Co-ordinate Bench directed the TPO to apply LIBOR rates to benchmark Arm's Length Price (ALP) of International Loan Transaction. Thus, in the light of the aforementioned judgment of the Hon'ble Jurisdictional High Court and the order of Tribunal in the assessee's own case, we direct the TPO to apply LIBOR rate to benchmark the transactions of loan advanced to AE during the relevant period. The grounds of appeal No.4 to 6 are partly allowed, accordingly.

8. In view of the above we see no reason to entertain the present appeal as in similar matters the Revenue has accepted the view of the Tribunal which has been relied upon by the impugned order. Accordingly, we see no reason to entertain the proposed questions of law.

9. Clearly, therefore, all that Their Lordships have held that since the Tribunal decisions in the cases of VVF Ltd (supra)[reported as VVF Ltd Vs DCIT- TS 84 ITAT 2010] and DCIT Vs Tech Mahindra Limited (supra)[reported as (2011) 12 taxmann.com132(Mum) and as (2011) 46 SOT 141 (Mum)] were accepted by the revenue authorities, it cannot be open to the revenue authorities to challenge the same decision in other cases. Both of these decisions were incidentally authored by one of us (i.e. the Vice President) and an important common thread in both of these decisions is that there has been a mark up on the Euro and USD denominated LIBOR, rather than LIBOR simpliciter. In Tech Mahindra case(supra), for example, it is specifically stated, in paragraph 7, that "We have adopted the same approach by taking into account the commercial principles and practices with regard to a US Dollar denominated extended credit for arriving at the benchmark rate, andtake LIBOR as Assessment year 2014-15 the base. Accordingly, the LIBOR (US Dollar) has to be a benchmark for US Dollar transactions - rather than the rate of interest on domestic borrowings, even which is lower than the interest rate of 10 per cent taken as ALP by the TPO, or, for that purpose, rate of interest on any other currency loans. Having said that, we may also reiterate that as we hold so, we are not giving any decision on whether the ALP adjustment can be made, on the basis of LIBOR plus mark up, in respect of extended credit because we are dealing with a very limited issue in this appeal which does not require adjudication on the broader question as to whether an extended credit period can anyway be compared with a loan, much less a loan in some other currency which will have distinct lending rates depending on the peculiarities relating that currency, since it does not involve the lending period commitment as a loan necessarily involves. Be that as it may,the CIT(A) cannot thus be said to be in error in adopting the US Dollars LIBOR rate, with mark-up which is not in dispute for its being too low, as a basis for ALP adjustment- as long as he can be said to be justified in upholding the ALP adjustment." Similarly, in VVF‟s case(supra), which is also reported as VVF Ltd Vs DCIT- TS 84 ITAT 2010, it was specifically noted by the coordinate bench, again in paragraph 7, that "We have noted that as was also noted by the Transfer Pricing Officer himself at page 3 of his order the assessee has borrowed foreign currency loans in US Dollars and for the purposes of investing in subsidiaries abroad, from ICICI Bank at the rate of LIBOR + 3%"and proceed to accept the same,at LIBOR + 3% as an Internal CUP, by observing that "In such a situation, and for the reasons we have discussed earlier, internal CUP is more reliable".

10. In view of the above discussions, what has been approved by Hon‟ble High Court is that the LIBOR based arm‟s length price cannot be challenged by the revenue authorities, and this decision is certainly not a proposition for holding that LIBOR simpliciter is to accepted as the arm‟s length rate. In any event, the LIBOR, or for that purpose any interbank rate, cannot be treated as an arm‟s length interest, except for inter-banking transactions. As we hold so, at the cost of stating the obvious, we must bear in mind the fact that LIBOR, by definition, is London inter-banking offer rate at which essentially banks lend to each other, and the interest rate for end consumers is certain points above this inter-banking rate. If banks borrow at x rate, even simply meeting the basic costs of administrating the business, the rate at which they give loans, has to be x plus something. In the transfer pricing benchmarking, when we ascertain arm‟s length price of a loan transaction, we have to ascertain the interest rate at which normal borrowing and lending transactions have to take place, and these rates are admittedly certain points above the inter-bank offer rate- unless, of course, the transactions are between the banking institutions. That is the reason the benchmarking of loan transactions is on the basis of inter-bank offer rate, plus certain basis points above that. The critical question, however, is how many points above the inter-bank rate is the typical arm‟s length rate, and that is what a benchmarking analysis should essentially focus on, apart from examining which inter-bank offer rate should be adopted, i.e. Indian inter-bank rate reflected by the RBI rate, LIBOR rate for US Dollar-denominated loans or some other inter-bank offer rate dealing with a particular currency such as Euro etc. The point in dispute in the cases referred to by Hon‟ble jurisdictional High Court were the cases where the dispute was confined to which inter-bank offer rate should be adopted, and not the spread or the bps above that. The coordinate bench thus clear in error, and inadvertent error at that, in understanding the impact of this decision, and, in any event, there was no decision on merits or on first principles by the coordinate bench.The understanding of the coordinate bench, quite clearly, is per incuriam, and as is the settled legal position, the per incuriam decisions cease to be binding judicial precedents. The authority, if needed, is contained in the oft-