2023 (4) TMI 389

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....ppellate 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 UK PIC for acquiring another company. In connection with the....

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....ve 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, fairly accepted the legal position that provision of corporate guarantee f....

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....002, 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 in terms of section 92B of the Act. The Hon'ble Madras High Court in case of PCIT v.....