Political contribution deductions require recipient party compliance with contribution-reporting conditions; banking-channel donations alone do not qu...
Aggregation under TNMM prevents selective testing of intra-group services without comparable uncontrolled transactions, while appellate additional cla...
Protective assessment cannot duplicate identical receipts under competing characterisations; remote services did not establish a taxable permanent est...
Current account treatment of overseas tournament services removed most FEMA findings, but excess EEFC remittance and delayed repatriation remained bre...
Modification of bail conditions remains available through inherent jurisdiction where onerous deposits undermine justice and cannot recover disputed d...
Merchant banker regulation consolidates registration, governance, capital, reporting, outsourcing and investor-protection requirements under an update...
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The ITAT held that once the corporate guarantee given by the assessee for the benefit of its associated enterprise (AE) was invoked by the EXIM Bank, the transaction between the assessee and the EXIM Bank did not constitute an international transaction u/s 92B(2) of the Income Tax Act. The vital constituent of an international transaction is that it should be between associated enterprises. After the surety (assessee) paid the guaranteed debt, it was subrogated to the rights of the creditor (EXIM Bank) against the principal debtor (AE). However, this subrogation did not create a new debt in the books of the guarantor. Therefore, the tax authorities erred in treating the invoked guarantee as a loan to the AE and charging arm's length interest on the same.
The ITAT held that once the corporate guarantee given by the assessee for the benefit of its associated enterprise (AE) was invoked by the EXIM Bank, the transaction between the assessee and the EXIM Bank did not constitute an international transaction u/s 92B(2) of the Income Tax Act. The vital constituent of an international transaction is that it should be between associated enterprises. After the surety (assessee) paid the guaranteed debt, it was subrogated to the rights of the creditor (EXIM Bank) against the principal debtor (AE). However, this subrogation did not create a new debt in the books of the guarantor. Therefore, the tax authorities erred in treating the invoked guarantee as a loan to the AE and charging arm's length interest on the same.
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