https://www.taxtmi.com/caselaws?id=764939 ITAT Delhi held that for determining arm's length price of Stand-by Letter of Credit issued to foreign associated enterprise, the rate of 1% charged by assessee's bank should be considered as comparable under CUP method, rather than bank guarantee rates used by TPO/DRP. The tribunal directed AO/TPO to apply 1% as ALP for the international transaction. Regarding disallowance under section 35(2AB), ITAT ruled that expenditure exceeding DSIR quantified amount should be allowed as revenue expenditure under section 37(1), as tax authorities failed to examine whether differential amount was for business purposes. Both grounds were allowed in favor of assessee. en-us Mon, 02 Dec 2024 00:00:00 +0530 Wed, 22 Jan 2025 08:21:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=764939 ITAT Delhi held that for determining arm's length price of Stand-by Letter of Credit issued to foreign associated enterprise, the rate of 1% charged by assessee's bank should be considered as comparable under CUP method, rather than bank guarantee rates used by TPO/DRP. The tribunal directed AO/TPO to apply 1% as ALP for the international transaction. Regarding disallowance under section 35(2AB), ITAT ruled that expenditure exceeding DSIR quantified amount should be allowed as revenue expenditure under section 37(1), as tax authorities failed to examine whether differential amount was for business purposes. Both grounds were allowed in favor of assessee. Case-Laws Income Tax Mon, 02 Dec 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=764939