Transfer Pricing: For outbound loans LIBOR rate should be adopted but not PLR of Indian Banks

3F Industries Limited Vs ACIT (ITAT Visakhapatnam) The ALP is to be determined on an international transaction ie., on the international loan and not for the domestic loan. Therefore, the comparable in respect of foreign currency loan in international market is LIBOR based and which is internationally recognized and adopted. In the assessee’s own case for the AYs 2008-09 and 2009-10 by the Hon’ble Visakhapatnam Bench, the dispute is with respect to 2% mark-up on the interest on loans granted to the AE which is on back to back basis from EXIM Bank. The Hon’ble Tribunal held that LIBOR sho...