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Bennett Coleman & Co Ltd. v. DCIT ( 2021) 205 DTR 209 ( Mum) ( Trib) www.itatonline .org

S. 92C : Transfer pricing – Arm’s length price – CUP method -Interest-free debt funding of an overseas company in the nature of a special purpose vehicle interest-free debt funding of an overseas company in the nature of a special purpose vehicle – Cannot be compared with loan simpliciter – Cannot be subjected to arm’s length price . [ S. 92A, 92B ]

Allowing the appeal of the asssessee the Tribunal held that is an interest-free debt funding of an overseas company in the nature of a special purpose vehicle (SPV), with a corresponding obligation to use it for the purpose of acquisition of a target company abroad, cannot be compared with a loan simpliciter, and cannot be subjected to an arm’s length price adjustment, on the basis of Comparable Uncontrolled Price (CUP) method accordingly.   (ITA Nos. 7523/Mum/2014, 5827/Mum/2015 and 484/Mum dated August 30, 2021 (AY .2010-11, 2011-12 , 2012-13)

Allowing the appeal of the asssessee the Tribunal held that is an interest-free debt funding of an overseas company in the nature of a special purpose vehicle (SPV), with a corresponding obligation to use it for the purpose of acquisition of a target company abroad, cannot be compared with a loan simpliciter, and cannot be subjected to an arm’s length price adjustment, on the basis of Comparable Uncontrolled Price (CUP) method accordingly.   (ITA Nos. 7523/Mum/2014, 5827/Mum/2015 and 484/Mum dated August 30, 2021 (AY .2010-11, 2011-12 , 2012-13)