1. This appeal by Revenue under Section 260A of the Income Tax Act,1961 (the Act) assails the order dated 30.4.2012 passed by the Income Tax Appellate Tribunal (the Tribunal). The assessment year involved is A.Y. 2007- 08.

2. The appellant-Revenue proposes the following questions for our consideration:—

"(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in treating lending transactions on par with borrowing transactions in conservation to the provision of Section 92B, thereby overlooking crucial factors of opportunity cost and risks borne by the lending entity which is a resident of India, as distinguished from the transaction where the lender is not a resident in India?

(b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in directing the Assessing Officer to benchmark the interest at prevailing EURIBOR rate instead of rupee loan rate to compute the Arms Length interest on the loan amounting to EURO 20,50,000 advanced by the assessee to its AE, ignoring the fact that EURIBOR does not govern the monetary markets or interest rates in India, which is the residence country of assess