During relevant previous year, assessee was allotted shares of its AE as part of its capital investment in its subsidiary.  Shares were allotted after share application money was remitted. Excess share application money out of remittance made was refunded to assessee. TPO considered entire amount of share application money as well as value of preference shares already issued to assessee as loan and imputed interest by adopting LIBOR plus spread. Commissioner (Appeals) upheld levy of interest in respect of part application money which was returned back by AE without issuance of preference shares by treating same as loan. Held that  since transaction of subscribing to preference shares was itself not found to be bogus or sham, Commissioner (Appeals) was not justified in upholding levy of interest on excess share application money refunded, by treating same as loan.The  Assessing Officer/TPO was to be directed to delete adjustment on account of levy of interest on excess share application money refunded.  Once it’s a legal condition precedent in entering transaction in respective Production Sharing Contract market that AE’s affiliates are not allowed to have any mark up on a supply of services to AE, determination of ALP is required to be made having regard to this condition. Therefore, cost to cost rendition of services could indeed be viewed as an arm’s length transaction.  Assessee had benchmarked commission on corporate guarantee given for its AE by following yield spread approach, based on offer letters issued by banks.  In these offer letters, interest on loan chargeable by banks to AE with assessee’s guarantee and without guarantee as compared in rate differential was divided amongst AE and assessee equally.  Accordingly, guarantee commission was charged by assessee from its AE at 50 per cent of interest rate differential.  TPO, though accepted yield spread method adopted by assessee, however, did not accept division of interest rate differential in 50:50 ratio and assigned at least 60 per cent of rate differential to assessee-Commissioner(Appeals) accepted benchmarking done by assessee by following yield spread approach with split of 50:50 in respect of both short-term and long-term guarantee.  On appeal, it was found that co-ordinate Benches of Tribunal have consistently held that split of 50:50 in respect of both short-term and long-term guarantee is reasonable. Therefore, there was no infirmity in findings of Commissioner (Appeals).  Held that  where a company was functionally comparable, same could not have been held incomparable simply on ground of low turnover, unless it was demonstrated that functions, assets and risk were completely different and incomparable. (AY. 2016-17)