2023 (4) TMI 389

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....-10. The impugned order of the Income Tax Appellate Tribunal is a common order dated 28.2.2022 relating to aforesaid both the assessment years. The controversy raised by the appellants in the present appeals relates to adjustment made on account of ALP on the corporate guarantee. The Income Tax Appellate Tribunal has considered the controversy in paragraphs 9 and 9.1 to 9.7 and remanded the matter to the Assessing Officer for denovo adjudication. Paragraphs 9 and 9.1 to 9.7 read as under: "9. The issue raised in ground no. 3 relates to adjustment made on account of ALP of corporate guarantee. 9.1 Briefly the facts are, assessee's AE in USA, i.e., HSL Holdings Inc. had taken a loan of USD 50 million from ICICI Bank U....

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....e issue. 9.2 Before us, learned Departmental Representative submitted, after amendment to section 92B of the Act vide Finance Act, 2012 with retrospective effect from 01.04.2002, the scope and ambit of international transaction has been expanded and various types of capital financing, including provision of guarantee have been included within the definition. Thus, he submitted, the decision of learned Commissioner (Appeals) that provision of corporate guarantee is not an international transaction, is erroneous. In support of his contention, he relied upon the decision of Hon'ble Madras High Court in the case of PCIT v. Redington (India) Ltd. (2021) 430 ITR 298 (Mad.)(HC). 9.3 Learned counsel for the assessee, though, f....

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....e to section 92B of the Act by Finance Act, 2012 with retrospective effect from 01.04.2002, the scope and ambit of the expression 'international transaction' was widened with the insertion of Explanation to section 92B of the Act. Clause (i)(c) of the Explanation clearly says that 'capital financing, including any type of long term or short term borrowings, lending or guarantee, purchase or sale of marketable securities or any types of advance payments or deferred payments or any other debt arising during the course of business can be regarded as international transaction'. Thus, keeping in view the amendment made to section 92B of the Act, provision of corporate guarantee has to be regarded as an international transaction i....