Our View: A Ltd. and B Pte. Ltd. are associated enterprises and B Pte. Ltd is a foreign company providing IT services that are covered under the scope of transfer pricing. Therefore, the transaction between A Ltd. and B Pte. Ltd. is an international transaction.
A Ltd. pays interest to C Ltd. which is an expense deductible under Income Tax Act,1961. Therefore, the interest on advancement of loan by C Ltd. to A Ltd. is a specified domestic transaction.