DCIT, Circle - 4(2), Kolkata , Kolkata V. M/s. Manaksia Ltd., , Kolkata

ITA 208/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0762 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PAUL CITSRDR
• Keywords: Transfer pricing; International transaction; Retrospective amendment
• Section: 143(3); 92B

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI, M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 208 - 209 / KOL / 20 18 ASSESSMENT YEARS :201-12 & 2013-14 DCIT, CIRCLE-4(2), 4 TH FLOOR, R.NO. 11B, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 V/S . M/S MANAKSIA LTD. BIKANEER BUILDING, 8/1, LALBAZAR STREET, KOLKATA-700001 [ PAN NO.AAACH 6882 J ] /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI RAVI TULSIYAN, FCA /BY REVENUE SHRI SANJAY PAUL, ADDL. CIT-SR-DR /DATE OF HEARING 12-11-2018 /DATE OF PRONOUNCEMENT 30-11-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THESE TWO REVENUES APPEALS FOR ASSESSMENT YEARS 20 11-12 AND 2013- 14 ARISE AGAINST COMMISSIONER OF INCOME TAX (APPEAL S)-22, KOLKATAS SEPARATE ORDER; BOTH DATED 28.11.2017 PASSED IN CAS E(S) NO.27/CIT(A)-22/11- 12/14-15/KOL. &102/CIT(A)-22/13-14/16-17/KOL; RESPE CTIVELY INVOLVING PROCEEDINGS U/S 143(3) R.W.S.144C OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. IT EMERGES AT THE OUTSET THAT THE REVENUE RAISES IDENTICAL TWIN SUBSTANTIVE GROUNDS IN BOTH THESE APPEALS. ITS FIRS T SUBSTANTIVE GROUND IS THAT CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELE TING ARMS LENGTH PRICE ADJUSTMENT OF 2,97,86,393/- AND 89,22,433/- (ASSESSMENT YEAR-WISE); RESPECTIVELY IN RESPECT OF ASSESSEES CORPORATE GUA RANTEE PROVIDED TO ITS ITA NO.208-209 A.YS11-12 & 1` 3-14 DCIT CIR-4(2) KOL. VS. M/S MA NAKSIA LTD. PAGE 2 OVERSEAS ASSOCIATE ENTERPRISES AE AS PROPOSED BY THE TRANSFER PRICING OFFICER AND ADDED IN THE COURSE OF THE ASSESSMENT I N ISSUE. WE FIND THAT THE INSTANT AS TO WHETHER A CORPORATE GUARANTEE AMOUNTS TO AN INTERNATIONAL TRANSACTION WITHIN THE MEANING OF SEC. 92B OF THE A CT OR NOT IS NO MORE RES INTEGRA. THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN AS SESSEE OWN CASE FOR ASSESSMENT YEAR 2012-13 ITA NO.980/KOL/2017 DECIDED ON 28.09.2018 HAS ADJUDICATED THIS VERY ISSUE IN ITS FAVOUR AS FOLLO WS:- 5. GROUND NO. 2, IS ON THE ISSUE OF DETERMINATION O F ALP ON CORPORATE GUARANTEE ON LOANS AVAILED BY AE. THE ID. 'CITCA) HELD THAT THE TP PROVISIONS DO NOT APPLY TO THE TRANSACTIONS OF PROVIDING CORPORATE GUARANTEE PRIOR TO THE AMENDMEN T BROUGHT IN BY WAY OF AN EXPLANATION TO SECTION 92B OF THE ACT, BY FINANCE A CT, 2012. FURTHER AT PAGE 45 HE HELD THAT THE METHODOLOGY APPLIED BY THE TPO IN COM PUTING THE ALP OF THE TRANSACTIONS WAS WITHOUT REASONABLE AND JUSTIFIABLE BASIS. WE FIND THAT THE FINDINGS OF THE LD. CITCA), ARE IN LINE WITH THE DECISION OF THE KOLKATA 'C' BENCH OF THE TRIBUNAL IN THE CASE OF M/S. EIH L TD. VS. DCIT (SUPRA) WHEREIN IT WAS HELD AS FOLLOWS:- 12.11. COMING TO THE ALTERNATE PLEA OF THE ASSESSEE THAT. IN THE FACTS AND CIRCUMSTANCES THE CORPORATE GUARANTEE IS NOT AN INT ERNATIONAL TRANSACTION U/S. 92B OF THE ACT. WE NOTE THAT TERM 'GUARANTEE' WAS INSERTED IN THE DEFINITION OF 'INTERNATIONAL TRANSACTION' IN SECTIO N 92B BY INSERTING AN EXPLANATION IN THE FINANCE ACT, 2012 WITH RETROSPEC TIVE EFFECT FROM 01/04/2002. THE EXPLANATION STATES THAT- 'FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED THAT (I) THE EXPRESSION 'INTERNATIONAL TRANSACTION' SHALL INCLUDE .... (C) CAPITAL FINANCING, INCLUDING ANY TYPE OF LONG-T ERM OR SHORT-TERM BORROWING, LENDING OR GUARANTEE, PURCHASE OR SALE OF MARKETABL E SECURITIES OR ANY TYPE OF ADVANCE, PAYMENTS OR DEFERRED PAYMENT OR RECEIVABLE OR ANY OTHER DEBT ARISING DURING THE COURSE OF BUSINESS. ' THE EXPLANATION STATES THAT IT IS CLARIFICATORY IN NATURE AND IS 'FOR THE REMOVAL OF DOUBTS'. THUS, IT DOES NOT ALTER THE BASIC CHARA CTER OF DEFINITION OF 'INTERNATIONAL TRANSACTION' UNDER THE MAIN SECTION 92B. UNDER THIS EXPLANATION, FIVE CATEGORIES OF TRANSACTIONS HAVE BEEN CLARIFIED TO HAVE BEEN INCLUDED IN THE DEFINITION OF 'INTERNATIONAL TRANSACTIONS'. CLA USES (A) (B) AND (D) DO NOT COVER GUARANTEE, LENDING OR LOANS. OTHER TWO, (C) A ND (E) DEAL WITH (I) CAPITAL FINANCING, AND (II) BUSINESS RESTRUCTURING OR REORG ANIZATION. CLAUSE (C) REFERS TO LENDING OR GUARANTEE. BUT THE EXPLANATION WHICH IS FOR REMOVAL- OF DOUBTS OR IS CLARIFICATORY, CANNOT BE READ- INDEPENDENT OF SECTION 92B(1). SECTION 92B(1), PROVIDES THOSE TRANSACTIONS AS INTERNATIONA L TRANSACTIONS WHICH ARE IN THE NATURE OF PURCHASE, SALE OR LEASE OF TANGIBLE O R INTANGIBLE PROPERTY (EXPLAINED BY CLAUSES (A) AND (B) OF THE EXPLANATIO N), OR PROVISION OF SERVICES, (EXPLAINED BY CLAUSE (D) OF THE EXPLANATION), OR LE NDING OR BORROWING MONEY (EXPLAINED BY CLAUSE (C) OF EXPLANATION). THE PLAIN READING OF PROVISIONS OF SEC. 92B(1) OF THE ACT INDICATE THAT THE VARIOUS TR ANSACTIONS MENTIONED IN SECTION 9B(1) OF THE ACT, (I.E. PURCHASES, SALES, P ROVISION FOR SERVICES, LENDING OR BORROWING OR ANY OTHER TRANSACTION) SHOULD HAVE BEARING ON THE PROFITS, ITA NO.208-209 A.YS11-12 & 1` 3-14 DCIT CIR-4(2) KOL. VS. M/S MA NAKSIA LTD. PAGE 3 INCOMES- LOSSES OR ASSETS OF SUCH ENTERPRISES. IN O UR OPINION, THE CONDITION PRECEDENT OF A TRANSACTION HAVING A BEARING ON PROF ITS, INCOMES, LOSSES, OR ASSETS WOULD APPLY TO EACH OF THE AFORESAID TRANSAC TIONS NAMELY PURCHASE, SALE, OR LEASE OF TANGIBLE OR INTANGIBLE PROPERTY O R PROVISION OF SERVICES, OR LENDING OR BORROWING MONEY OR ANY SUCH TRANSACTION. THIS UNDERSTANDING OF OURS GETS FURTHER CLARIFIED BY, WAY OF INSERTION OF EXPLANATION IN SECTION 92B(1) BY THE FINANCE ACT 2012 WITH RETROSPECTIVE EFFECT F ROM 01.04.2002 VIDE CLAUSE (A) TO (D). WE FIND THAT IN THE SAID EXPLANATION, C LAUSE (E) ALONE HAS BEEN CARVED OUT AS AN EXCEPTION WHEREIN, THE TRANSACTION THEREON HAS BEEN SPECIFICALLY MANDATED TO BE AN INTERNATIONAL TRANSA CTION WHERE A TRANSACTION OF BUSINESS RESTRUCTURING OR REORGANIZATION, ENTERED I NTO BY AN ENTERPRISE WITH AN AE IRRESPECTIVE OF THE FACT THAT IT HAS BEARING ON THE PROFITS, INCOMES, LOSSES, OR ASSETS OF SUCH ENTERPRISES AT THE TIME OF TRANSA CTION OR AT ANY FUTURE DATE. 12.12. THUS, WE HOLD THAT WHEN A PARENT COMPANY EXT ENDS AN ASSISTANCE TO THE SUBSIDIARY, BEING ASSOCIATED ENTERPRISE, SUCH A S CORPORATE GUARANTEE TO A FINANCIAL INSTITUTION FOR LENDING MONEY TO THE SUBS IDIARY, WHICH DOES NOT COST ANYTHING TO THE PARENT COMPANY, AND WHICH DOES NOT HAVE ANY BEARING ON ITS PROFITS, INCOME, LOSSES OR ASSETS, IT WILL BE OUTSI DE THE AMBIT OF INTERNATIONAL TRANSACTION UNDER SECTION 92B(1) OF THE ACT IN THIS REGARD, WE WOULD LIKE TO HOLD THAT ISSUANCE OF CORPORATE GUARANTEE BY THE AS SESSEE TO ITS AE WOULD HAVE 'INFLUENCE ON THE PROFITS, INCOMES, LOSSES OR ASSETS OF ENTERPRISE' BUT NOT NECESSARILY HAVE 'ANY IMPACT ON THE PROFITS, INCOME S, LOSSES OR ASSETS' AS ADMITTEDLY NO CONSIDERATION WAS RECEIVED BY THE ASS ESSEE IN RESPECT OF THIS CORPORATE GUARANTEE FROM ITS AE. WE FIND THAT THE A HMEDABAD TRIBUNAL IN THE CASE OF MICRO INK IN ITA NO. 2873/AHD/2010 HAD OBSE RVED THAT IF A SUBSIDIARY (AE IN THE INSTANT CASE) COULD NOT BORROW MONEY FRO M THIRD PARTY SOURCES ON ITS OWN STANDING AND THE GUARANTEE PROVIDED BY THE PARENT (ASSESSEE IN THE INSTANT CASE) ENABLES IT TO MAKE SUCH BORROWING, TH EN THE GUARANTEE COULD BE SAID TO BE A SHAREHOLDER FUNCTION, NOT WARRANTING A GUARANTEE FEE. THIS RATIO WOULD SQUARELY BE APPLICABLE TO THE FACTS OF THE IN STANT CASE BEFORE US. 12.13 THE LD. CIT, DR'S RELIANCE IN THE CASE OF EVE REST KANTO CYLINDER LTD. (SUPRA) WOULD NOT COME TO THE RESCUE OF REVENUE BEC AUSE IN THAT CASE, THE PARENT COMPANY CHARGED A FEE OF 0.5% ON THE AE FOR RENDERING THIS SERVICE. ON THIS FACTUAL ASPECT, THE TRIBUNAL AS WELL AS THE HON'BLE HIGH COURT HELD THAT IT IS AN INTERNATIONAL TRANSACTION. SINCE IN T HE CASE IN HAND, THE ASSESSEE HAS NOT CHARGED A PENNY FROM THE AE, SO THE FACTS O F THE CASE ARE DIFFERENT AND CASE LAW IS DISTINGUISHABLE AND, THEREFORE, THE HON 'BLE HIGH COURT'S ORDER CANNOT COME TO THE RESCUE OF THE REVENUE. WE FIND T HAT THE ID. AR POINTED OUT THAT IN THE SAID CASE, THE HON'BLE BOMBAY HIGH COURT DID NOT ANSWER THE SPECIFIC QUESTION AS TO WHETHER THE ISSUANCE OF COR PORATE GUARANTEE IS INHERENTLY WITHIN THE AMBIT OF DEFINITION OF ' INTERNATIONAL TRANSACTION ' IRRESPECTIVE OF WHETHER OR NOT SUCH TRANSACTIONS HA VE ANY 'BEARING ON PROFITS, INCOME, LOSSES OR ASSETS OF SUCH ENTERPRISES' U/S. 92B OF THE ACT WE ALSO NOTE THAT THE AHMEDABAD BENCH OF THIS TRIBUNAL SUPR A AFTER CONSIDERING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN EVERES T KANTO CYLINDER LTD. (SUPRA) OBSERVED AS UNDER: 'WE ARE UNABLE TO SEE, IN THE JUDGMENT OF HON'BLE B OMBAY HIGH COURT, ANY SUPPORT TO THE PROPOSITION THAT ISSUANCE OF CORPORA TE GUARANTEE IS INHERENTLY WITHIN THE AMBIT OF DEFINITION OF 'INTERNATIONAL TR ANSACTION' UNDER SECTIO~92B IRRESPECTIVE OF WHETHER OR NOT SUCH TRANSACTIONS HA VE ANY 'BEARING ON PROFITS' INCOMES, LOSSES, OR ASSETS OF SUCH ENTERPRISES'. RE VENUE, THEREFORE, DOES NOT DERIVE ANY HELP FROM THE SAID DECISION. ITA NO.208-209 A.YS11-12 & 1` 3-14 DCIT CIR-4(2) KOL. VS. M/S MA NAKSIA LTD. PAGE 4 12.14. THE ID CIT DR WOULD HAVE HAD A CASE WHERE A FEE HAS BEEN CHARGED FOR THE INTRA SERVICE WHICH HAS BEEN RENDERED (IN T HE CONTEXT OF CORPORATE GUARANTEE), AND, THEREFORE, 'THE ASSESSEE OR THE CO URT HAS TREATED IT AS AN INTERNATIONAL TRANSACTION, THEN THE CHARGE OT CORPO RATE GUARANTEE HAS TO.BE.IN ACCORDANCE WITH ARM'S LENGTH PRINCIPLE. THIS MEANS THAT THE PRICE FOR CORPORATE GUARANTEE SHOULD BE THAT WHICH WOULD HAVE BEEN PAID AND ACCEPTED BY INDEPENDENT ENTERPRISES IN COMPARABLE C IRCUMSTANCES. IN THAT CASE TRANSFER PRICING ADJUSTMENTS ARE REQUIRED. IN THAT CASE, IT HAS TO BE DETERMINED WHAT WILL BE THE ALP OF CORPORATE GUARAN TEE COMMISSION PAID BY ASSOCIATE ENTERPRISE TO THE PARENT COMPANY PROVIDIN G CORPORATE GUARANTEE. SINCE THAT IS NOT THE CASE BEFORE US, WE NEED NOT G O INTO IT 12.15. WE ALSO FIND THAT THIS VERY SAME ISSUE CAME UP FOR ADJUDICATION BY THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASST YEAR 2 010-11 IN ITA NO. 530/KOL/2015 DATED 9.6.2017 , WHEREIN BY PLACING RE LIANCE ON THE DECISION OF CO-ORDINATE BENCH OF MUMBAI TRIBUNAL IN THE CASE OF A) MARICO LTD VS ACIT REPORTED IN (2016) 70 TAXMANN .COM 214 [MUMBAI TRIB] WHEREIN IT WAS HELD THAT CORPORATE GU ARANTEE WAS NOT AN INTERNATIONAL TRANSACTION; AND B) SIRO CLINPHARM P LTD VS DCIT IN ITA NO. 2618/MUM /2014 DATED 31.3.2016 , WHEREIN IT WAS HELD THAT THE EXPLANATIO N INTRODUCED BY FINANCE ACT 2012 CAN BE MADE APPLICABLE ONLY FROM A SST YEAR 2013- 14 ONWARDS. 12.16. MOREOVER, WE FIND THAT THOUGH THE EXPLANATIO N WAS INTRODUCED BY FINANCE ACT 2012, THE RULES WERE NOTIFIED ONLY ON 1 0.6.2013. HENCE THE ASSESSEE CANNOT BE EXPECTED TO REPORT THIS TRANSACT ION ALSO AS AN INTERNATIONAL TRANSACTION IN ITS TRANSFER PRICING S TUDY AND THE AUDIT REPORT THEREON. 12.17. IN VIEW OF THE AFORESAID FINDINGS AND RESPEC TFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDENTS, WE ALLOW THE GROUNDS 1.1. TO 1 .4 RAISED BY THE ASSESSEE. 5.1. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPH OLD THE ORDER OF THE ID. CIT(A) ON THIS ISSUE AND DISMISS THIS GROUND OF THE REVENUE. ACCORDINGLY, GROUND NO. 2 OF THE REVENUE IS DISMISSED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY D URING THE COURSE CONTENDS THAT A CORPORATE GUARANTEE IS VERY MUCH AN INTERNATIONAL TRANSACTIONS POST FACTO AMENDMENT IN SEC. 92B OF THE ACT WITH RETROSPECTIV E EFFECT DATED 01.04.2002 (SUPRA). HE FAILS TO DISPUT E THE FACT THAT THE LEARNED CO-ORDINATE BENCH HEREINABOVE HAS CONSIDERED AMEND ED PROVISION AS WELL. THERE IS NO DISPUTE THAT THE CIT(A) HAS ADOPTED JUD ICIAL CONSISTENCY IN FOLLOWING HIS FINDINGS ON THE EVERY ISSUE IN EARLIE R ASSESSMENT YEARS ATTENDING FINALITY UPTO THIS TRIBUNAL AS WELL. THERE IS NO DI STINCTION ON FACTS OR LAW INDICATED AT THE REVENUES BEHEST IN THE IMPUGNED A SSESSMENT YEAR. WE ITA NO.208-209 A.YS11-12 & 1` 3-14 DCIT CIR-4(2) KOL. VS. M/S MA NAKSIA LTD. PAGE 5 THEREFORE AFFIRM THE CIT(A)S FINDINGS UNDER CHALLE NGE DELETING CORPORATE GUARANTEES ARMS LENGTH PRICE ADJUSTMENT(S) IN BOT H THE IMPUGNED ASSESSMENT YEARS. 4. NEXT COMES THE REVENUES LATTER SUBSTANTIVE GROU ND SEEKING TO REVIVE TRANSFER PRICING ADJUSTMENT OF 2,44,17,630/- AND 9,25,64,000/- (ASSESSMENT YEAR-WISE) IN RESPECT OF ASSESSEES LOANS GIVEN TO ITS OVERSEAS ASSOCIATE ENTERPRISES. SUFFICE TO SAY, THE ABOVE CO-ORDINATE BENCHS DECISION IN ASSESSMENT YEAR 2012-13 HAS ALSO ADJUDICATED THE VE RY RECURRING ISSUE IN TAXPAYERS FAVOUR AS FOLLOWS:- 4.1 GROUND NO.1, IS AGAINST THE DELETION OF UPWARD ADJUSTMENT OF RS.697,64,000/-, TOWARDS ARMS LENGTH INTEREST ON LOAN GIVEN TO ASSO CIATED ENTERPRISES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER MADE A REFERENCE TO THE TRANSFER PRICING OFFICER (TPO) FOR CALCULATION OF ARMS LENGTH INTEREST RATE IN RESPECT OF LOAN ADVANCED BY THE ASSESSEE CO MPANY TO ITS ASSOCIATE ENTERPRISE (AE), EURO ASIAN VENTURES FZE. THE TPO A RRIVED AT ARMS LENGTH INTEREST RATE OF 20.15% BY APPLYING COMPARABLE UNCONTROLLED PRICE (CUP) METHOD AND BENCHMARKING THE SAME AGAINST LOCAL INTEREST RATES AND ACCORDINGLY CALCULATED THE UPWARD ADJUSTMENT AT RS.6,97,64,000/-. BEFORE THE L D. CIT(A),A THE ASSESSEE SUBMITTED THAT IT HAS CHARGE INTEREST @ 5% ON THE L OAN GIVEN TO ITS AE I.E. EUROASIAN VENTURES FZE, WHICH IS AT ARMS LENGTH WHEN BENCHMA RKED AGAINST LIBOR AND HENCE NO ADJUSTMENT ON THIS ACCOUNT WAS CALLED FOR. HE FURTHER RELIED ON THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF SIVA INDUSTRIES & HOLDINGS LTD VS. ACIT (145 TTJ (CHENNAI) 497) AND OTHER DECISIONS OF THE TRIBUNAL FOR THE PROPOSITION THAT IF THE LOAN ADVANCED TO AN AE IS DENOMINATED I N FOREIGN CURRENCY THEN INTEREST RATE THEREON SHOULD BE BENCHMARKED AGAINST INTERNAT IONAL RATES BEING LIBOR AND NOT AGAINST THE DOMESTIC LENDING RATE. FURTHER, RELIANC E WAS PLACED ON THE DECISION OF THE DELHI BENCH OF THE ITATS IN THE CASE OF KOHINOOR F OODS LTD VS. ACIT (67 SOT 108). 4.2 THE LD. CIT(A) WHILE DETERMINING THE ALP OF IN TEREST ON LOAN GIVEN TO AE, HELD THAT (COMPARABLE UNCONTROLLED PRICE ) CUP IS THE MO ST APPROPRIATE METHOD (MAN). HE DISAGREED WITH THE ORDER OF THE LD. TRANSFER PRI CING OFFICER THAT US LIBOR CANNOT BE CONSIDERED AS A BENCHMARK AGAINST US DOLLAR DENO MINATED LOAN. AT PARA 4 OF HIS ORDER, HE HELD AS FOLLOWS:- 4. HAVING EXAMINED THE MATER, IT IS TO BE SAID THA T THE CASE LAW RELIED UPON BY THE APPELLANT, NAMELY THE JUDGMENT OF ITAT(DELHI ) IN CASE OF KOHINOOR FOODS LTD. VS. ACT APPLICABLE IN THE CASE AT HAND, AND COVERS THE MATTER. THE MATTER IS WELL COVERED BY THE GENERAL CONSENSUS AMONG THE HON'BLE ITAT BENCHES THAT INTERNATIONAL TRANSACTIONS INVOLVING C ROSS-BORDER COUNTRY LOANS TO AE CAN BE BENCHMARKED AGAINST LIBOR, AS ALSO SUP PORTED BY THE RBIS CIRCU9LAR THAT A SPREAD RANGING FROM 1% -2% OVER LI BOR IS REASONABLE (OR ADVANCING LOANS. THEREFORE, IN DECIDING THE MATTER, IT IS HELD THAT AN INTEREST RATE OF LIBOR PLUS 2% CAN BE HELD TO BE ARMS LENGT H RATE OF INTEREST, AND AS FOR THE CASE AT HAND, THE INTEREST CHARGED BY THE A SSESSEE FROM ITS AE IS HIGHER THAN LIBOR PLUS 2%, THE ADJUSTMENT MADE BY T HE LD. TPO IN THE CASE IS HELD TO BE UNJUSTIFIED AND NOT SUSTAINABLE. THE GROUND OF APPEAL STANDS ALLOWED ACCORDINGLY. ITA NO.208-209 A.YS11-12 & 1` 3-14 DCIT CIR-4(2) KOL. VS. M/S MA NAKSIA LTD. PAGE 6 AS THE LD. CIT(A) HAS FOLLOWED THE PROPOSITIONS OF LAW LAID DOWN BY DIFFERENT BENCHES OF THE TRIBUNAL ON THIS ISSUE, WE FIND NO INFIRMITY IN THE SAME. THE KOLKATA BENCH OF ITAT HAS IN A NUMBER OF CASES INCLUDING M/S EIH LTD . VS. DIT (SUPRA) FOLLOWED THE SAME PRINCIPLES. HENCE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IS UPHELD AND GROUND NO.1 OF THE REVENUE IS DISMISSED. 5. WE NOTICE HEREIN AS WELL THAT THE REVENUE FAILS TO SUGGEST ANY EXCEPTION ON FACTS OR LAW INVOLVED IN ALL THESE ASS ESSMENT YEARS. WE THUS ADOPT THE ABOVE CO-ORDINATE BENCHS DETAILED REASON ING MUTATIS MUTANDIS TO AFFIRM THE CIT(A)S FINDINGS UNDER CHALLENGE QUA TH IS LATTER ISSUE AS WELL. 6. THESE TWO REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 30/ 11/2018 SD/- SD/- ( ) (( ) (M.BALAGANESH) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S )- 30 / 11 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S MANAKSIA LTD., BIKANEER BUILDING, 8/1 , LALBAZAR ST. KOLKATA-001 2. /REVENUE-DCIT, CIRCLE-4(2) 4 TH FLOOR, ROOM NO.11B, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-69 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 4,