erred in law
by using Prime Lending Rate instead of LIBOR for determining the
arm's length interest amount.
5.7 The learned ... free loan given by the assessee to its AE, viz. ADSIL, the
LIBOR rate prevailing as on 31.03.2005 should have been considered
earlier order, directed the AO/TPO to compute interest by
adopting LIBOR rate plus 3.25% for the outstanding period.
13. The Ld A.R submitted ... ordinate bench of
Tribunal has sustained the addition to the extent of Libor rate plus 150 bps on
an identical issue in the earlier years
According to the ld. Authorised Representative, the ld. TPO had
considered the LIBOR rate of 0.95% and added such LIBOR rate to
2% interest applicable ... Interest rate. Contention of the ld. Authorised
Representative was that if the LIBOR rate of 0.95% was considered,
assessee's rate of interest
charge any interest, the rate of interest
charged on loan should be LIBOR plus by taking the following cases:
1. Geodesic ... benchmark its returns with the domestic
interest rate rather than Libor. The ideal interest rate on
outbound intra-group loans would be that interest rate
been charged by the ICICI
Bank from the assessee i.e. LIBOR plus 250 basis points
meaning thereby that assessee fully recovered the interest paid ... reached to a
conclusion that interest charged from the subsidiary i.e. LIBOR
plus 250 basis points is not an arm length price. Therefore
Commercial Borrowing (ECBs) and the range of rates of interest vary
between LIBOR plus 100 bps to 200 bps. The European Central Bank has recommended ... ECBs. Foreign Currency Loans are given by Banks globally bearing LIBOR based
Rate. The average of the LIBOR based Rate for the period from
price of interest
income of the assessee at 12 Month average of LIBOR + 5% and additions were
deleted ... price of interest
income of the assessee at 12 Month average of LIBOR + 5% and additions were
deleted
According to the ld. Authorised Representative, the ld. TPO had
considered the LIBOR rate of 0.95% and added such LIBOR rate to
2% interest applicable ... Interest rate. Contention of the ld. Authorised
Representative was that if the LIBOR rate of 0.95% was considered,
assessee's rate of interest
being
labor + 700 basis points, as against the rate of LIBOR +200 bps charged by the
appellant.
3.1 That the Commissioner of Income Tax (Appeals ... loan from financial institutions, viz., SBI,
at the rate of 3 months LIBOR + 170 basis points and from ICICI at 3 months LIBOR
+ 140 basis
considering notional rate of interest at average
comparable rate instead of LIBOR rate.
8. The order passed ... loan. The
base rate is accordingly taken as 12 Months US Dollar LIBOR
The above filters have been relaxed wherever required so as to have
