Interest-Free Loan Transfer Pricing Adjustment Invalid Without Any Profits

Viraj Solar Maharashtra Private Limited Vs ITO (ITAT Mumbai) Transfer Pricing Adjustment on Interest-Free Loans Unsustainable Where Business Has Not Commenced and No Profits Exist The Mumbai ITAT held that transfer pricing adjustments on interest-free or low-interest loans to associated enterprises cannot be sustained when the assessee has not commenced business and has not earned any income during the year. In this case, the assessee, engaged in the solar power sector, had advanced loans to its group entities—interest-free to one AE and at 8.5% to another. The TPO applied an arbitrary mark-...