Assessee engaged in business of identifying investment opportunities in financially distressed companies. Assessee raised funds through debt instruments from group companies by issuing Compulsory Convertible Debentures (CCDs) .During relevant year, assessee paid interest at rate of 11.30 per cent on CCD to its associated enterprises . TPO held that interest paid to associated enterprises was excessive, made certain adjustment to assessee’s ALP. Tribunal held that rate of interest at 11.30 per cent is reasonable. High Court up held the order of the Tribunal. (AY. 2010-11)
PCIT v. India Debt Management (P.) Ltd. (2019)417 ITR 103/ 264 Taxman 42/ 178 DTR 223 / 309 CTR 32 (Bom.)(HC) .Editorial , SLP was dismissed on account of delay in filing , PCIT v. India Debt Management (P) Ltd (2021) 277 Taxman 405 (SC)
S. 92C : Transfer pricing–Arm’s length price–Interest-11.30 per cent interest paid by assessee to its AE was very much within arm’s length rate- Deletion of addition is held to be valid.