The Income Tax Appellate Tribunal (ITAT) issued its decision on 6 August 2013 in the case of Micro Inks Ltd. v. ACIT (ITA No. 1668/AHD/2006) that interest-free loans to an associated enterprise (AE) can be commercially justified under certain circumstances..
(a) Facts. The Taxpayer (i.e. Micro Inks Ltd) is engaged in the business of manufacturing and sale of printing inks and other intermediate and allied products. The Taxpayer wholly owned Micro Inks GmbH, Austria (Micro Austria) which …