Domestic PLR has no applicability in determining arm’s length interest rate (Dec 4, 2015)
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH “B”, HYDERABAD
BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND
SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 157/Hyd/2014
Assessment Year: 2008-09 Rain Commodities Ltd., vs. Addl. Commissioner of
(presently known as Rain Income-tax, Range – 3
Industries Ltd.), Hyderabad Hyderabad.
PAN – AABCP2276K
ITA No. 276/Hyd/2014 Assessment Year: 2008-09 Dy. Commissioner of Income- vs. Rain Commodities Ltd., tax, Circle – 3(1), Hyderabad. (presently known as Rain Industries Ltd.), Hyderabad PAN – AABCP2276K (Appellant) (Respondent) Assessee by : Shri Deepak Chopra & Miss Manasvani Baj Pai Revenue by : Shri Mohan Singh Singhania
Date of hearing 28-10-2015
Date of pronouncement 04-12-2015
ORDER PER S. RIFAUR RAHMAN, A.M.:
The cross appeals of the assessee and revenue are filed against the order of the CIT(A)-IV, Hyderabad, dated 13/12/2013. These appeals are disposed off by this common order for the sake of convenience.
Domestic Prime Lending Rates would have no applicability and it is LIBOR rate which has to be considered while determining arm’s length interest rate in respect of an International Transaction. Additionally held that it would be appropriate to charge a corporate guarantee fee @ 0.50% where assesse through a common facilities agreement in connection with overseas acquisition of subsidiary companies had provided corporate guarantee in favour of itsAE.