2021 (2) TMI 1012

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.... SUBMIT 1. The above-mentioned appeal was disposed of by the Hon'ble Income-tax Appellate Tribunal ("the Tribunal"), "K" Bench, Mumbai vide order dated 27.05.2020 for the Assessment Year 2011-2012 (hereinafter referred to as "the Order"). 2. The Applicant, with due respect to the Hon'ble Bench, submits that there are certain mistakes apparent in the Order and therefore the Order of the Tribunal may be rectified and necessary order may be passed. 3. The Applicant is a company registered under the Companies Act, 1956 and had issued various corporate guarantees on behalf of its subsidiaries for the facilities obtained by them. The details of corporate guarantee issued by the Applicant on behalf of its Associa....

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....n lease. The rental payments of such lease are backed by corporate guarantee of the Applicant. In case of default by the AE, the lessor will terminate the lease agreement, take back the machinery/equipment on lease and can recover the rental outstanding & due from the Applicant. Name of the Borrower Name of the FI Guarantee Amt (Rs) Loan o/s as on 31.03.2011 Essel Propack America LLC ("EP USA") De Lage Lande Financial Services 38,79,76,500 5,07,24,262 Arista Tubes INC, USA De Lage Lande Financial Services 37,90,57,500 5,48,29,472 Arista Tubes Limited UK GE Capital 16,09,43,355 16,09,43,355 In the case of EP USA above, the Applicant has charged a guarantee commission of 1%, while in ot....

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....fer pricing adjustment is warranted. 10. The aforesaid contention of the Applicant is recorded in para 9 of the impugned order. The Hon'ble Tribunal after accepting the submission of the Applicant that 0.5% of the guarantee amount should be treated as arm's length, while directing the AO/TPO to recompute the amount of guarantee commission has committed an inadvertent error. The relevant extract of Para 12 of the Order is as under. "12. For rest of the guarantee commissions, before us, the Id AR for the assessee made two fold submissions; i.e. in first set of submissions the Id AR submits that extending corporate guarantee is not an international transaction and that the provisions of Chapter X is not applicable and....