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4. On the facts and circumstances of the case and in law, the learned AO/learned Panel erred in applying 12 month average of LIBOR rates in determining the arm's length price of international transaction with respect to interest paid on CCDs by the Appellant to its AEs. Further, adopting 12 month LIBOR rates was completely ad-hoc, as the learned AO/learned Panel did not undertake suitable adjustments thereby failing to align the LIBOR rates to the prevalent interest rates for CCDs.

8. without prejudice to the above, the Hon'ble DRP erred in considering the average LIBOR rates of 2009 at 1.599% instead of 1.2848% which is the average LIBOR rate during the period.

9. For that the Hon'ble DRP erred in law as well as on facts, in directing the TPO to make an estimated 1% adjustment on account of Risk when Transfer pricing regulations in India is against any assumption in respect to any adjustment and further when there is also no reliable method to convert the qualitative difference into quantitative difference for making adjustment on account of risk level.

The assessee has filed CO for A. Y. 2009 - 10 but the grounds raised by IT(TP)A Nos. 63 & 84/Bang/2015, 599, 2060 & 2178/Bang/2016 & C.O. Nos. 83/Bang/2017 & 09/Bang/2018 the assessee are merely in support of the order of CIT (A) and apart from that, there is no ground or grievance.

12. In A. Y. 2010 - 11, the assessee carried the matter in appeal before DRP against the Draft Assessment order passed by the AO in line with the order of TPO by holding that no interest on CCDs is allowable and made adjustment of Rs. 16,54,49,612/-. DRP in this year held that CCDs are Debt and not equity. DRP also held that Thin Capitalisation principle is not applicable. Having held this, DRP also held that ALP for interest on CCDs has to be worked out at LIBOR Plus rate and directed the AO to adopt ALP of interest on CCDs at 1.559%. DRP also held that additional 1% should be added to the prevailing LIBOR rate of interest to cover risk adjustment. Against this direction of DRP, the revenue is in appeal. One of the issues raised by the revenue is this that CCD is equity and not debt and hence, interest on CCDs is not an allowable expenditure. Second issue raised is this that even if it is held that interest on CCDs is allowable, the ALP should be 1.2848% as against 1.559 %. Third issue raised is about granting of 1% Risk Adjustment.

13. In this year, the assessee has also filed an appeal. One of the issues raised by the assessee is this that interest on CCDs should be benchmarked in the year of issue only and not every year. Second issue raised is this that since CCDs are issued in INR, PLR of Indian Public Sector Banks should be used for ALP of interest on CCDs and not LIBOR.

14. In A. Y. 2011 - 12, the TPO proposed addition of Rs, 16,54,49,610/- being the entire interest on CCDs on the same basis that CCDs are equity and not Debt and the AO passed Draft Assessment order accordingly. The assessee in this year also carried the matter to DRP. The DRP in this year held that the CCDs are equity and not Debt and hence, interest on CCDs is not allowable. As a consequence, the ALP of interest aspect was not decided by holding that it s academic. Now the assessee is in appeal on the ground that CCDs are Debt and not equity. This issue is also raised that Principle of Thin Capitalisation as contained in legislation from United IT(TP)A Nos. 63 & 84/Bang/2015, 599, 2060 & 2178/Bang/2016 & C.O. Nos. 83/Bang/2017 & 09/Bang/2018 Kingdom is not applicable in India. This issue is also raised by the assessee that interest on CCDs should be benchmarked in the year of issue only and not every year. Second issue raised is this that since CCDs are issued in INR, PLR of Indian Public Sector Banks should be used for ALP of interest on CCDs and not LIBOR.