M/S Rain Commodities Ltd.vs Department Of Income Tax (ITAT Hyd.)

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
(Appellant)                              (Respondent)

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.

Held:

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.

 

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