made under
section 92CA(3) in which the learned TPO adopted 6.31% (LIBOR of 4.41
percent plus 1.9 percent) as the arm's length ... OFCD with the loan and thereby, determining ALP
Interest rate of 6.31 % @ LIBOR rate as applicable to loan granted to foreign
subsidiary. The learned
advanced to the AEs and imputing interest at the rate
equal to LIBOR plus 400 basis points;
2.2. disregarding the intercompany pricing arrangement ... interest is to be imputed, instead of an ad-hoc
rate of LIBOR plus 400 basis points, the LIBOR rate alone
failed to appreciate the fact that LIBOR + spread is adopted for finance
transactions like loans whereas recovery of trade receipts intends to recover
the cost
charged the rate of interest is to be
restricted to LIBOR / LIBOR + 200 bps.
14. On the facts and in the circumstances of the case ... restricting the rate of interest on
the loan transaction to LIBOR rates without any spread.
15. Without prejudice, learned TPO/ learned
DCIT/DRP erred in law by using prime
lending rate instead of LIBOR for determining the arm's length interest amount.
5.6 The learned ... free loan given by the assessee to its AE, viz. ADSIL the
LIBOR rate prevailing as on 31.03.2012 should have been considered
Length Price by the Transfer Pricing Officer
at LIBOR + 400 bps instead of LIBOR + 300 bps on loan given by the appellant to its
Hindustan ... Date of Agreement 26.04.2010
Rate of Interest LIBOR 3M + 300 bps
Tenor 3 Years
Due Date of Interest After 3 years
Security from
facts in directing to add appropriate spread on the LIBOR
rates as against using the average LIBOR rates itself for computing
notional interest on outstanding ... accordingly by taking note of facts, directed the AO to
adopt the LIBOR rates with an appropriate spread befitting the
credit standing
respect of the aforesaid
loan (interest free) as per "LIBOR 6 months plus 500bps for loan having maturity period
exceeding 5 years ... assessee to its AE viz. ADSIL i.e by using LIBOR 6
months plus 500 bps for loan having maturity period exceeding 5 years during
rates of interest applicable for the said loans (ECBs)
would be LIBOR+350 bps and LIBOR+ 100 bps respectively and the aforesaid
interest rates were ... whichever is less. The advance payment would
bear interest at three months LIBOR(EURO) plus 100 basis points per annum
from the date of receipt
Associate Enterprise ("AEs") by adopting 6 months
benchmarking at LIBOR + 150 basis points for loans having maturity between
three to five years ... months LIBOR + 250 basis points for loans having
maturity period beyond more than five years.
2. The Appellant prays that it be held that
