https://www.taxtmi.com/caselaws?id=313905 ITAT Mumbai held that corporate guarantee transactions constitute international transactions requiring transfer pricing adjustments under Section 92B. The tribunal confirmed that advances given without interest to joint venture partners were not loans but fulfillment of JV obligations, directing deletion of adjustments. For performance guarantees, the tribunal accepted 0.93% as arm's length rate based on bank charges. Corporate guarantee fee was determined at 0.6% instead of TPO's 2% rate, considering reduced default risk due to government undertaking security. The tribunal allowed mark-to-market losses on hedging contracts as deductible expenditure but denied education cess deduction following SC precedent in Chambal Fertilizers case. en-us Wed, 31 May 2023 00:00:00 +0530 Tue, 07 May 2024 23:06:21 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=313905 ITAT Mumbai held that corporate guarantee transactions constitute international transactions requiring transfer pricing adjustments under Section 92B. The tribunal confirmed that advances given without interest to joint venture partners were not loans but fulfillment of JV obligations, directing deletion of adjustments. For performance guarantees, the tribunal accepted 0.93% as arm's length rate based on bank charges. Corporate guarantee fee was determined at 0.6% instead of TPO's 2% rate, considering reduced default risk due to government undertaking security. The tribunal allowed mark-to-market losses on hedging contracts as deductible expenditure but denied education cess deduction following SC precedent in Chambal Fertilizers case. Case-Laws Income Tax Wed, 31 May 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=313905