Charitable trust income application permits verified capital expenditure but rejects deferred pre-operative claims and requires reconsideration of con...
Reinsurance premium deductions require established regulatory breaches, while independently acquired software qualifies within the computer depreciati...
Rectification of mistake remains limited to self-evident record errors, preventing merits review through miscellaneous applications and preserving fin...
Tender creditworthiness conditions may extend to de facto Promoter Directors, with post-participation challenges generally barred absent arbitrariness...
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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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