Held that the rate of interest on loans advanced by the assessee to associated enterprises must conform to the rate of interest prevailing in the associated enterprises’ country of residence, wherein the loan was availed of. Therefore, the domestic prime lending rate could not be applied in respect of loans advanced in foreign currency to the associated enterprises situated overseas. Followed CIT v. Cotton Naturals (I) P. Ltd (2015) 55 taxmann.com 523 (Delhi)(HC). (AY. 2010-11)
ACIT v. Uniparts India Ltd(2023) 150 taxmann.com 142 / (2024)115 ITR 473 (Delhi)(Trib)
S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Loans to two overseas subsidiaries-Domestic prime lending rate is inapplicable-Addition is deleted