TaxTMI 
TaxTMI 
2019 (8) TMI 1450
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....on making corporate guarantee adjustment(s) of Rs. 8226/- and Rs. 29,592/- ; assessment year wise; respectively. Suffice to say that it transpires at the outset that this tribunal's co-ordinate bench's decision in ITA No. 1912/Kol/2012 Tega Industries Ltd V/s. DCIT for AY 2008-09 decides the issue against the department in holding that a corporate guarantee does not amount to an international transaction u/s. 92B of the Act. 4. There is further no dispute that the legislature has introduced Explanation to section 92B of the Act vide Finance Act, 2012 w.e.f 1-4-2002. This tribunal's yet another decision in DCIT, Cir-4(2), Kolkata V/s. M/s. Manaksia Limited decided on 28- 09-2018 concludes that the above stated explanation inserted in the statutory provision is made clarificatory in nature. Relevant discussion to this effect reads as under:- "5. Ground No. 2, is on the issue of determination of ALP on corporate guarantee on loans availed by AE. The ld. CIT(A) held that the TP Provisions do not apply to the transactions of providing corporate guarantee prior to the amendment brought in by way of an explanation to Section 92B of the Act, by Finance Act, 2012. Furth....
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....t indicate that the various transactions mentioned in section 92B(1) of the Act, (i.e. purchases, sales, provision for services, lending or borrowing or any other transaction) should have bearing on the profits, incomes, losses or assets of such enterprises. In our opinion, the condition precedent of a transaction having a bearing on profits, incomes, losses, or assets would apply to each of the aforesaid transactions namely purchase, sale, or lease of tangible or intangible property or provision of services, or lending or borrowing money or any such transaction. This understanding of ours gets further clarified by way of insertion of Explanation in section 92B(1)by the Finance Act 2012 with retrospective effect from 01.04.2002 vide clause (a) to (d). We find that in the said explanation, clause (e) alone has been carved out as an exception wherein, the transaction thereon has been specifically mandated to be an international transaction where a transaction of business restructuring or reorganization, entered into by an enterprise with an AE irrespective of the fact that it has bearing on the profits, incomes, losses, or assets of such enterprises at the time of transaction or at a....
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....al supra after considering the decision of the Hon'ble Bombay High Court in Everest Kanto Cylinder Ltd. (supra) observed as under: "We are unable to see, in the judgment of Hon'ble Bombay High Court, any support to the proposition that issuance of corporate guarantee is inherently within the ambit of definition of 'international transaction' under section 92B irrespective of whether or not such transactions have any 'bearing on profits' incomes, losses, or assets of such enterprises'. Revenue, therefore, does not derive any help from the said decision." ITA No. 980/Kol/2017 Assessment Year: 2012-13 M/s. Manaksia Limited 12.14. The ld CIT DR would have had a case where a fee has been charged for the intra service which has been rendered (in the context of corporate guarantee), and, therefore, the assessee or the Court has treated it as an international transaction, then the charge of corporate guarantee has to be in accordance with Arm's Length principle. This means that the price for corporate guarantee should be that which would have been paid and accepted by independent enterprises in comparable circumstances. In that cas....
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....38101 & Rs. 13,68,167/- as well as Rs. 25,34,347/- and Rs. 39,26,353; head wise/assessment year-wise respectively whilst disallowing the impugned sum of Rs. 65,752,848/- and Rs. 52,92,520/- over and above, the suo motu figures. The CIT(A) has affirmed the same in his lower appellate finding. 7. Coming to assessee's first and former plea qua the instant issue of section 14/R.W.R 8D disallowance that the lower authorities have nowhere recorded any satisfaction regarding corresponding explanation as per its books of account u/s. 14A(2) of the Act, we find no merit since the Assessing Officer had found no reson to accept the above stated suo motu figures. It has further filed necessary details of the financial position as well as either heads of avialbility of funds in the paper book. The same suggests that the assessee had made assessment year wise investments of Rs. 170.32 corres and Rs. 217.42 crores in exempt income yielding investments whereas corresponding non interest bearing amount in assessment year wise of Rs. 326.08 and Rs. 386.59 corres; respectively. These clinching figures have gone rebutted from the revenue side. Hon'ble Bombay High Court's landmark decision in CIT V/....