Income Tax Appellate Tribunal Chennai Sundaram Fasteners Limited, Chennai vs Dcit Corporate Circle 6(2), Chennai on 26 July, 2024 आयकर अपीलीय अिधकरण, 'डी' यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL 'D' ी एबी टी. वक , ाियक सद एवं ी अिमताभ शु ा, लेखा सद के सम BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3236/Chny/2017 िनधा रण वष /Assessment Year: 201314 M/s.Sundram Fasteners Ltd., v. The DCIT, 98A, 7th Floor, Corporate Circle6(2), Dr.Radhakrishnan Salai, Chennai. Mylapore, Chennai600 004. [PAN: AAACS 8779 D] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Shri Vikaram Vijayaraghavan, Advocate यथ क ओर से /Respondent by : Shri A. Sasikumar, CIT सुनवाईक तारीख/Date of Hearing : 12.06.2024 घोषणाक तारीख /Date of Pronouncement : 26.07.2024 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the impugned order of the Assessing Officer (hereinafter in short 'the AO') dated 30.10.2017, pursuant to the direction of the Dispute Resolution Panel (hereinafter in short 'the DRP') dated 21.09.2017 and pertains to Assessment Year (hereinafter in short 'AY') 201314. ITA No.3236/Chny/2017 (AY 201314) M/s.Sundram Fasteners Ltd. :: 2 :: 2. Ground Nos.2 to 2.1.2 relates to the issue of TP adjustment towards international transactions amounting to Rs.3,88,48,718/. The TPO noted that assessee has given loan to its AE's as under: No Loan granted Amount Rate of Interest Amount To Interest (in Rs.) 1 Peiner 346,873,500.00 6% p.a. 2,12,03,715 Umformtechnik GmbH, Germany 2 TVS Peiner 45,168,500.00 6% p.a. 13,70,111 Services, Germany 3 Windbolt 35,365,000.00 9% p.a. 1,48,53,174 GmbH, Germany 2.1 According to the TPO, it can be seen from the chart (supra) that the assessee has charged interest @9% for the loans given to one of the related company M/s Windbolt GmBH, Germany, whereas, it has charged only 6% on the loans given to other two related parties. So, according to him, interest rate should be @9% from the other two AEs also and accordingly, made an adjustment of Rs.3,52,83,780/ as under: No Loan granted Amount Rate of Interest Amount To Interest (in Rs.) 1 Peiner 346,873,500 9% p.a. 3,12,18,615 Umformtechnik GmbH, Germany 2 TVS Peiner 45,168,500 9% p.a. 40,65,165 Services, Germany Total 3,52,83,780 2.2 The DRP has confirmed the action of the TPO. The Ld.AR of the assessee pointed out that Companies to whom assessee gave loan @6% were wholly owned subsidiary of the assesse's/Pioneer Group; and further ITA No.3236/Chny/2017 (AY 201314) M/s.Sundram Fasteners Ltd. :: 3 :: submitted that the loan advanced to them were for the purpose of business; and since, both the AEs were not in good financial health, considering the commercial expediency, the assessee had advanced loan to them; and also pointed out that even though, interest was charged @6%, the assessee had to eventually waive off the interest and thus, the assessee in fact had advanced the amount interestfree to these subsidiary/AE's. And in this context, the Ld.AR pointed out that the assessee had enough ownmoney to give interestfree loan to related parties/AE's and therefore, no adjustment was warranted; and submitted that similar issue had cropped up in the assessee's own case for AYs 201011 & 201112, and the Tribunal had remitted back the very same issue to the file of the AO to verify the actual surplus funds available with the assessee and gave certain direction [refer order for AY 201011]. Therefore, according to him, for the year under consideration also the issue of disallowance of interest may