i) ALP of interest on loan granted to European AE has to be based on Euribor, (ii) If technical know-how is transferred by reserving certain rights, there is no "transfer" for s. 2(47) capital gains, (iii) interest u/s 244A is not taxable if withdrawn.

Mylan Laboratories Ltd vs. ACIT (ITAT Hyderabad)

(i) As the assessee has advanced the loan in foreign currency PLR rate of interest will not be applicable. Moreover, since the AE is situated at Belgium EURIBOR rates would be more appropriate (Tata Autocomp Systems Ltd. Vs. ACIT, 2012(5) TMI 45 followed);

Though, technical know-how is a capital asset, it does not necessarily follow that all receipts from exploitation of such asset are to be treated as capital receipts. Revenue receipts can also be generated by exploiting capital assets.

iii) If the interest granted u/s 244A was subsequently withdrawn by the department, effectively no income on account of interest granted under section 244A accrues to the assessee. Therefore, the income already shown by the assessee by taking into account the interest granted earlier under section 244A requires to be reduced from the taxable profit for assessment year. The fact that the assessee’s appeal is pending is not relevant.