Ahmedabad ITAT Clarifies Letter of Credit vs. Bank Guarantee in Transfer Pricing Dispute

Axis Bank Limited Vs ACIT (ITAT Ahmedabad)

The case of Axis Bank Limited Vs. ACIT (Income Tax Appellate Tribunal, Ahmedabad) revolves around the determination of the arm’s length price (ALP) of interest on a loan provided by the assessee to its associate entity. Specifically, it concerns a Tier-II Loan amounting to 25 million USD provided by the assessee to Axis Bank, UK. The dispute arises from the interest charged by the assessee compared to the interest determined by the Transfer Pricing Officer (TPO) to be the ALP.

The assessee charged interest based on 3 months US

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