DCIT 4(1)(2), MUMBAI V. AURIONPRO SOLUTIONS LTD, MUMBAI

ITA 4810/MUM/2015

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5455 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAS KUMAR
• Keywords: Transfer pricing; International transaction; Rule of consistency; Set aside
• Section: 2; 10B; 144C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K , MUMBAI BEFORE SHRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 4810/MUM/2015 ASSESSMENT Y EAR: 2009 - 10 & ITA NO. 4809/MUM/2015 ASSESSMENT Y EAR: 2010 - 11 THE DCIT - 4(1)(2), ROOM NO. 640, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S AURIONPRO SOLUTIONS LTD., 404, 4 TH FLOOR, WINCHESTER, HIRANANDANI BUSINESS PARK, POWAI, MUMBAI 76 PAN : AAACV7297H (APPELLANT) (RESPONDENT) REVENUE BY : SHRI MANAS KUMAR (DR) ASSESS EE BY : SHRI SATYA PRAKASH SINGH ( A R) DATE OF HEARING: 26/10 /201 8 DATE OF PRONOUNCEMENT: 31 / 10 /201 8 / O R D E R PER RAM LAL NEGI, JM THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDE R DATED 24.03.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 55 , MUMBAI PERTAINING TO THE ASSESSMENT YEAR S 2009 - 10 AND 20 10 - 11 RESPECTIVELY , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL S FILED BY THE ASSESS EE AGAINST ASSESSMENT ORDER S PASSED U/S 144C READ WITH SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). SINCE, THESE APPEALS PERTAIN TO THE SAME ASSESSEE AND ISSUES INVOLVED ARE IDENTICAL, BOTH THE APPEALS WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 ITA NO. 4810/MUM/2015 (ASSESSMENT YEAR: 2009 - 10 ) BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF COMPUTER SOFTWARE AND DEVELOPMENT AND WEBSITE DESIGNING, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 DECLARING THE TOTAL INCOME OF RS. 2,750/ - AND THE TAX CALCULATED ON THE BOOK PROFIT OF RS. 21,13,54,025/ - . IN RESPONSE TO THE NOTICES U/S 143 (2) AND 142 (1), THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE APPEARED BEFORE THE AO FROM TIME TO TIME AND FILED THE DETAILS CALLED FOR. A REFERENCE WAS MADE U/S 92CA OF THE ACT FOR COMPUTATION OF ARMS LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION , MENTIONED IN THE AUD IT REPORT , WAS MADE TO THE TPO FOR MAKING ADJUSTMENT ON ACCOUNT T OF INTEREST ON ADVANCES GIVEN BY THE ASSESSEE TO ITS ASSOCIATED ENTERPRISES. THE LD. TPO AFTER HEARING THE ASSESSEE DETERMINED THE ARMS LENGTH PRICE OF INTEREST NOT CHARGED BY THE ASSESSEE A T RS. 1,81,80,524/ - TAKING THE RATE OF 13.27%. 2. IN THE FIRST APPEAL, THE LD CIT(A) REJECTED THE ADJUSTMENT MADE BY THE LD. TPO AND FOLLOWING THE DECISION OF THE TRIBUNAL RENDERED IN THE ASSESSEES OWN APPEAL PERTAINING TO THE ASSESSMENT YEAR 2007 - 08, DIRECTED THE AO TO WORK OUT THE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTION APPLYING LIBOR PLUS 2% ON MONTHLY CLOSING BALANCE OF ADVANCES IN QUESTION. THE REVENUE IS IN APPEAL AGAINST THE SAID FINDINGS OF THE LD. CIT(A). 3 . THE REVENUE HAS CHALLENGE D THE IMPUGNED ORDER ON THE FOLLOWING E F FECTIVE GROUND S : - . 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO WORK OUT THE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTION IN THE APPELLANTS CASE APPLY ING LIBOR PLUS 2% ON MONTHLY CLOSING BALANCE OF ADVANCE TO SUBSIDIARIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN REJECTING THE ACTION OF THE TOP IN WORKING OUT THE 3 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 RATE OF BENCHMARKING @ 13.27% BASED ON THE M ATERIAL ON RECORDS BY INVOKING YIELD METHOD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN REJECTING THE VIEW OF THE TPO THAT LOANS ADVANCED BY ASSESSEE TO AES ARE IN THE NATURE OF SHORT TERM WORKING CAPITAL REQUIR EMENT AND HENCE INTEREST RATE OF 1 - 2 YEARS BONDS IS APPLIED RELYING ON THE INFORMATION OBTAINED FROM CRISIL AND NOT BASED ON LIBOR PLUS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN NOT BRINGING IN ANY COMPARABLE TRANSACTIONS, AND DELETING THE ADJUSTMENT MADE BY TPO. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN NOT CONSIDERING THE FACT THAT THE TPO HAS WORKED OUT THE INTEREST RATE OR YIELD METHOD AFTER ANALYZING THE RATE A T WHICH THE ASSESSEE WOULD HAVE EARN ED IN ADVANCING LOAN OF ABOVE AMOUNT TO UNRELATED THIRD PARTIES WITH SIMILAR FINANCIAL STRENGTH AS THAT OF ITS SUBSIDIARY. 4. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ASSESSMENT ORDER PASSED B Y THE AO IN ACCORDANCE WITH THE TRANSFER PRICING ADJUSTMENT MADE BY THE TRANSFER PRICING OFFICER (TPO) UNDER SECTION 92CA (3) OF THE ACT, SUBMITTED THAT THE LD. CIT (A) HAS ERRED IN DIRECTING THE AO TO WORK OUT THE ARMS LENGTH PRICE OF THE INTERNATIONAL T RANSACTION IN THE PRESENT CASE BY APPLYING LIBOR PLUS 2% ON MONTHLY CLOSING BALANCE OF ADVANCE TO ITS SUBSIDIARIES REJECTING THE ACTION OF THE TPO, WHO HAS WORKED OUT THE RATE OF BENCHMARKING @ 13.27 BASED ON THE MATERIAL ON RECORD. THE LD. DR FURTHER SUBM ITTED THAT THE LOANS ADVANCED BY THE ASSESSEE TO ITS ASSOCIATED ENTERPRISES ARE IN THE NATURE OF SHORT TERM WORKING CAPITAL REQUIREMENT AND HENCE THE INTEREST RATE OF 1 - 2 YE ARS BONDS IS APPLIED. THE LD . COUNSEL FURTHER SUBMITTED THAT THE LD. CIT (A) HAS RE JECTED THE ADJUSTMENT MADE BY THE LD. TPO WITHOUT CONSIDERING THE FACT THAT THE TPO HAS WORKED OUT THE INTEREST RATE AF T ER ANALYZING THE RATE AT WHICH THE ASSESSEE WOULD HAVE EARNED INTEREST FROM 4 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 ADVANCING LOAN TO UNRELATED PARTIES. THE LD. COUNSEL ACCORDI NGLY SUBMITTED THAT THE FINDINGS OF THE LD. CIT (A ) IS LIABLE TO BE SET ASIDE. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE MUMBAI TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08 RENDERED IN ITA NO. 7872/MUM/2011 VIDE ORDER DATED 12.04.2013. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE LD. CIT (A) HAS DECIDED THE IDENTICAL ISSUE BY FOLLOWING THE DECISION OF THE TRIBUNAL, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE. THEREFORE, THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE ORDERS PASSED BY THE AUTHORITI ES BELOW AS WELL AS THE ORDER PASSED BY THE COORDIN ATE BENCH IN ITA NO. 7872/MUM/2011 IN THE ASSESSEES APPEAL FOR THE A.Y. 2007 - 08 (SUPRA). THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT (A) HAS WRONGLY REJECTED THE TRANSF ER ADJUSTMENT MADE BY THE TPO AND DIRECTED THE AO TO WORK OUT THE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTION APPLYING LIBOR PLUS 2% ON MONTHLY CLOSING BALANCE OF ADVANCES TO ITS SUBSIDIARIES. WE NOTICE THAT THE LD. CIT (A) HAS DECIDED THE ISSUE IN QUESTION BY FOLLOWING THE DECISION OF THE COORDINATE BENCH RENDERED IN THE ASSES SES OWN CASE FOR THE A.Y. 2007 - 08 (SUPRA). THE COORDINATE BENCH OF THE TRIBUNAL HAS DECIDED THE IDENTICAL ISSUE IN THE ASSESSEES OWN CASE HOLDING AS UNDER: - 8.7 UNDER THE TRANSFER PRICING REGULATIONS, AN INTERNATIONAL TRANSACTION HAS TO BE COMPARED WI TH AN UNCONTROLLED TRANSACTIONS BETWEEN UNRELATED PARTIES WHICH MEANS THAT AN INTERNATIONAL TRANSACTION IS TESTED WITH THE TRANSACTION, IF THE ASSESSEE COULD HAVE ENTERED INTO A SIMILAR TRANSACTION WITH UNRELATED THIRD PARTY AND THEREBY THE INCOME OF THE A SSESSEE WOULD HAVE EARNED FROM A SIMILAR TRANSACTION WITH AN UNCONTROLLED PARTY. THUS, THE SAME INCOME IS EXPECTED OR DEEMED TO HAVE BEEN EARNED FROM THE 5 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 TRANSACTION WITH THE AES. THE UNDERLINING PRINCIPLE OF DETERMINING THE ALP IS BASED ON THE TRANSACTION BETWEEN THE UNRELATED PARTIES. THE INCOME OF THE ASSESSEE SHOULD NOT BE EFFECTED AS REDUCED AND THEREFORE, THE SAME IS COMPARED WITH THE INCOME OR EXPENDITURE AS THE CASE MAY BE EARNED OR INCURRED BY THE ASSESSEE, IF IT WOULD HAVE BEEN BETWEEN THE ASSESSE E AND THE UNRELATED PARTIES. THEREFORE, TESTED PARTY FOR THE PURPOSE OF DETERMINATION OF ALP IS THE ASSESSEE AND NOT THE AES. 8.8 IN THE CASE IN HAND, THE ASSESSEE HAS ADVANCED LOANS TO THE AES WITHOUT CHARGING ANY INTEREST; THEREFORE, THE TRANSACTION HA S TO BE TESTED WITH A SITUATION, HAD THE ASSESSEE INVESTED OR ADVANCED OR DEPOSITED THE SAID AMOUNT WITH AN UNRELATED THIRD PARTY AND THEREBY THE INCOME, WHICH WOULD HAVE BEEN EARNED BY THE ASSESSEE IS EXPECTED TO HAVE BEEN EARNED FROM THE TRANSACTION OF A DVANCING LOANS TO THE AES. 8.9 THUS, ON PRINCIPLE, WE DO AGREE WITH THE DRP ON THE POINT OF THE TESTED PARTY FOR DETERMINING THE ARM'S LENGTH INTEREST RATE THAT WOULD HAVE BEEN EARNED BY THE ASSESSEE BY ADVANCING LOANS TO THE UNRELATED THIRD PARTY. 8.10 THE TRANSFER PRICING REGULATION ARE BASED ON THE DEEMING PRINCIPLE BY TAKING INTO ACCOUNT A HYPOTHECAL SITUATION THAT INSTEAD OF HAVING TRANSACTION WITH AE HAD THE ASSESSEE TRANSACTED WITH UNRELATED PARTY WHAT WOULD HAVE BEEN THE FINANCIAL/COMMERCIAL RESU LT OF THAT TRANSACTION. THUS, THE EFFECT OF TRANSACTION ON THE INCOME OF THE ASSESSEE IS TO BE SEEN AND CONSIDERED AND NOT EFFECT ON THE COST OR INCOME OF THE AE. THEREFORE, THE TESTED PARTY IS ALWAYS THE TAX PAYER AND NOT THE AE. NONE OF THE FACTORS UNDER THE TRANSFER PRICING REGULATIONS REQUIRE TO CONSIDER WHETHER THE AES WOULD HAVE INCURRED OR EARNED MORE OR LESS; BUT IT IS ALWAYS CONSIDERED WHETHER THE ASSESSEE HAD EARNED MORE OR LESS BY DOING A SIMILAR TRANSACTION WITH AN UNRELATED PARTIES. 8.11 EVEN UNDER RULE 10B OF THE IT RULES, THE FACTORS PRESCRIBED FOR INCLUSION OR EXCLUSION OF COMPARABLES TO DETERMINE THE ALP ARE ALSO BASED ON THE COMPARISON OF THE ASSESSEE WITH THE CHOSEN ENTITIES AND THE AE HAS NO RULE IN THE EXERCISE OF SELECTING THE COMPARA BLES. THUS, IN OUR VIEW, THE INTEREST THAT WOULD HAVE BEEN EARNED BY THE ASSESSEE BY ADVANCING OR PLACING THE SAID AMOUNT 6 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 WITH UNRELATED PARTIES WOULD BE THE ARM'S LENGTH INTEREST IN RELATION TO THE INTEREST FREE LOANS/ADVANCES TO THE AE. THE SAFEST COMPAR ABLES, WHICH CAN BE TAKEN AS ARMS LENGTH INTEREST RATE IN SUCH A CASE WOULD BE THE INTEREST ON FD WITH THE BANK FOR A TERM EQUALENT TO THE TERM FOR WHICH THE LOANS GIVEN TO THE AES. 8.12 IT IS PERTINENT TO NOTE THAT IN CASE OF FD WITH THE BANK, THE I NVESTMENT IS SAFE AS IT IS FREE FROM RISK OF CREDIT AND INTEREST. ON THE OTHER HAND, IF THE LOAN/ADVANCES IS GIVEN TO THE UNRELATED PARTY, THEN ALWAYS THERE IS SOME RISK OF CREDIT AND INTEREST INVOLVED I SUCH TRANSACTION. THERE IS ONE MORE REASON FOR TAKIN G THE FD AS AN APPROPRIATE AND GOOD COMPARABLE BECAUSE THE LENDING RATE BY FINANCIAL INSTITUTIONS/BANK VARIES DEPENDING UPON THE CREDIT RATING OF THE BORROWER AND FURTHER ON THE GUARANTEE AND SECURITY PROVIDED TO SECURE THE LOANS. 8.13 THOUGH IN PRINCIPL E WE DO CONCUR WITH THE VIEW OF DRP ON THIS ISSUE, HOWEVER, SINCE THE ISSUE OF LIBOR HAS BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN VARIOUS CASES AS RELIED UPON BY THE ASSESSEE (SUPRA), THEREFORE, TO MAINTAIN THE RULE OF CONSISTENCY, WE FOLLOW THE DECI SION OF THE COORDINATE BENCHS OF HIS TRIBUNAL, AND ACCEPT LIBOR FOR BENCHMARKING INTEREST ON INTEREST FREE LOANS TO AES. SINCE THE LIBOR IS A RATE APPLICABLE IN THE TRANSACTIONS BETWEEN THE BANK AND FURTHER THE LOANS ADVANCED BY THE BANK TO CLIENTS ARE SEC URE BY SECURITY AND GUARANTEE, THEREFORE, A LOAN WHICH HAS BEEN ADVANCED WITHOUT ANY SECURITY OR GUARANTEE AS IN THE CASE OF THE ASSESSEE HAS TO BE BENCHMARK BY TAKING THE ARMS LENGTH INTEREST RATE AS LIBOR PLUS. THOUGH THE TPO TOOK ALP AS LIBOR + 3% , HO WEVER, IN OUR VIEW, THE APPROPRIATE RATE WOULD BE LIBOR PLUS 2%. WE ACCORDINGLY, DIRECT THE AO/TPO TO DETERMINE THE ARM/S LENGTH INTEREST BY CONSIDERING THE LIBOR PLUS 2% ON THE MONTHLY CLOSING BALANCE OF ADVANCES DURING THE FINANCIAL YEAR RELEVANT TO THE AY UNDER CONSIDERATION. 7. WE FIND THAT THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE AND THE ISSUE INVOLVED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08 (SUPRA). THE COORDINATE BENCH HAS DECIDED THE IDEN TICAL ISSUE AND DIRECTED THE AO /TPO TO DETERMINE THE ARMS LENGTH INTEREST 7 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 IN QUESTION BY CONSIDERING THE LIBOR PLUS 2% ON THE MONTHLY CLOSING BALANCE OF THE ADVANCES DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. D R DID NOT CONTROVERT THE FACT THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS IDENTICAL TO THE ISSUE DECIDED BY THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08. T HE LD. CIT(A) HAS DECIDED THE ISSUE BY FOLLOWING THE DECISION OF THE COOR DINATE BENCH . SINCE THE COORDINATE BENCH HAS ALREADY DECIDED THIS ISSUE, WE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THE APPEAL OF THE REVENUE AND FURTHER DIRECT THE AO/TPO TO WORK OUT T HE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTIONS APPLYING LIBOR PLUS 2% OF MONTHLY CLOSING B A LANCE OF ADVANCES TO ITS SUBSIDIARIES, IN TERMS OF THE ORDER DATED 24.03.2015 OF THE LD. CIT (A). ITA NO. 4809/MUM/2015 (ASSESSMENT YEAR: 2010 - 11 ) THE RE VENUE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS: - . 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE AO TO WORK OUT THE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTION IN THE APP ELLANTS CASE APPLYING LIBOR PLUS 2% ON MONTHLY CLOSING BALANCE OF ADVANCE TO SUBSIDIARIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN REJECTING THE ACTION OF THE TOP IN WORKING OUT THE RATE OF BENCHMARKING @ 9. 77% BASED ON THE MATERIAL ON RECORDS BY INVOKING YIELD METHOD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN REJECTING THE VIEW OF THE TPO THAT LOANS ADVANCED BY ASSESSEE TO AES ARE IN THE NATURE OF SHORT TERM WORK ING CAPITAL REQUIREMENT AND HENCE INTEREST RATE OF 1 - 2 YEARS BONDS IS APPLIED RELYING ON THE INFORMATION OBTAINED FROM CRISIL AND NOT BASED ON LIBOR PLUS. 8 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN NOT BRINGING IN ANY COMPARABLE TRANSACTIONS, AND DELETING THE ADJUSTMENT MADE BY TPO. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN NOT CONSIDERING THE FACT THAT THE TPO HAS WORKED OUT THE INTEREST RATE OR YIELD METHOD AFTER AN ALYZING THE RATE AT WHICH THE ASSESSEE WOULD HAVE EARNED IN ADVANCING LOAN OF ABOVE AMOUNT TO UNRELATED THIRD PARTIES WITH SIMILAR FINANCIAL STRENGTH AS THAT OF ITS SUBSIDIARY. 2. THE FACTS AND THE ISSUES INVOLVED IN THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS AND ISSUE INVOLVE IN THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2009 - 10. SINCE, WE HAVE DISMISSED THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2009 - 10, CONSISTENT WITH OUR FINDINGS, WE UPHOLD THE ORDER PASSED BY THE LD. CIT (A) AND DISMISS THIS APPEAL OF THE REVENUE FOR THE SAME REASONS AND FURTHER DIRECT THE AO TO WORK OUT THE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTION APPLYING LIBOR PLUS 2% ON MONTHLY CLOSING BALANCE OF ADVANCES MADE TO THE SUBSIDIES , IN TERMS OF THE ORDER OF THE LD. CIT (A). IN THE RESULT, APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR S 2009 - 10 AND 2010 - 2011 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST . OCTOBER, 2018 . SD/ - SD/ - ( B.R. BASKARN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 31 / 10 / 2018 ALINDRA, PS 9 ITA NO S. 4809 & 4810 /MUM/201 6 ASSESSMENT YEAS : 2009 - 10 & 20 10 - 11 / COPY OF T HE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI