Case Law Details
Altico Capital India Pvt. Ltd Vs ACIT (ITAT Mumbai)
Conclusion: The ITAT deleted the adjustment in respect of international transaction of Payment of Interest on ‘Fully Convertible Debentures’ by upholding the contentions that LIBOR was not applicable as there was no lending/borrowing in foreign currency and assessee had issued rupee dominated debentures. Also in earlier year, TPO has taken Indian rates for charging interest on FCDs and not LIBOR rate, and therefore the same transaction following/percolating from previous years should not be taxed on different basis.
Facts: In present facts, the cross appeals have been filed by either parties challenging the impugned order dated 25/10/2017, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by learned Commissioner of Income Tax (Appeals)–55, Mumbai, (“learned CIT(A)”), for the assessment year 2011–12. The assessee has raised the following grounds:
1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the upward adjustment made by the Assistant Commissioner of Income-tax 14(1)(2), Mumbai (hereinafter referred to as ‘learned AO’)/ Deputy Commissioner of Income-tax (Transfer Pricing)-1(2)(1), Mumbai (hereinafter referred to as ‘learned TPO‟ with respect to the international transaction pertaining to payment of interest on Fully Convertible Debentures (FCDs):
2. On the facts and circumstances of the case, the learned CIT(A) has erred in not correctly appreciating the relevant facts of the case and submissions filed by the Appellant for the year under consideration with respect to the international transaction of nonbinding investment advisory services rendered by the Appellant to its associated enterprises (AEs);
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