2017 (11) TMI 1750

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....22/Hyd/2014, ITA No. 309/Hyd/2015 and 259/Hyd/2016. 2. The common issue involved in all these appeals is that the assessee had entered into an international transaction of offering corporate guarantee to its associate enterprises. The Tribunal in its order for the A.Y 2009-10 and 2010-11 has held 0.50% to be reasonable corporate guarantee fee, while in ITA No. 259/HYD/2016 for the A.Y 2011-12, the Tribunal had held that the transaction of corporate guarantee is not an international transaction as it has become an international transaction only by virtue of the amendment of Sec. 92B of the Finance Act 2012 with retrospective effect from 01-04-2012. To come to this conclusion, the Tribunal followed the decision of the Coordinate Bench of t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the corporate guarantee has been specifically brought into an international transaction and therefore it cannot be treated to be retrospectively applicable. 5. Having regard to the rival contentions and material on record, we find that the Coordinate Bench of the Tribunal in the case of Siro Clinpharm Private Ltd (supra) has considered all the above arguments of the Revenue to hold that the corporate guarantee cannot be treated as an international transaction prior to the amended provision of u/s 92B of the IT Act with effect from 01-04-2012 i.e from the A.Y 2013-14 onwards. Further, it is also seen for the A.Ys 2009-10 and 2010-11, the assessee had raised the ground that the corporate guarantee is not covered under the definition of in....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 14. In the result, ground Nos. 12 & 14 are allowed and other grounds i.e Nos. 8 to 11 and 14 to 16 are not adjudicated as it would only result in an academic exercise. 21. Ground Nos. 2 to 8 are against the transfer pricing adjustment suggested by the TPO on corporate guarantee provided by the assessee to its AEs in USA. Brief facts relating to this issue are that during the financial year under consideration, the assessee through a common set of agreements, dated 17.07.2007, has provided a corporate guarantee for a combined loan of USD 150 million. The assessee did not charge any fee for the corporate guarantee given, whereas the TPO was of the opinion that the assessee has to charge guarantee fee. We find that this iss....