TaxTMI 
TaxTMI 
2024 (12) TMI 420
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....t documentary evidence duly considered in the light of Rule 18(6) of the ITAT Rules, 1963. 3. Briefly stated the facts of the case are that the assessee is an engineering procurement and construction contracting company established in 1979. It provides turnkey solutions for the construction of roads, bridges, fully integrated rail & metro systems, commercial building & airports and setting up power generation plants, power transmission & distribution systems, chemical process plants, water and waste management and complete mining and metal purification systems. 3.1. Return for the year was filed electronically on 15/02/2021 declaring total income of Rs. 174,06,88,920/-. The return was selected for scrutiny and accordingly statutory notice....
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....AE Description of International Transactions Amount (in Rs.) Method adopted 1 TQ Services Europe Gmbh Secondment of technical personnel/ employees 348473 TNMM 2 Industrial Quality Services LLC Oman Secondment of technical personnel/ employees 4349196 TNMM 3 TQ Services Europe Gmbh Sub-contracting of quality and inspection services 16934257 CUP 4 Industrial Quality Services LLC Oman Sub-contracting of quality and inspection services 84980123 CUP 5 IND Project Engineering (Shanghai) Co. Ltd Sub-contracting of quality and inspection service 100460600 CUP 6 NESMA Tata Projects Limited Corporate Guarantee given 342605062 CUP 7 Industrial Quality Services LLC Oman Recovery of expenses 8883113 2156036 8 IND ....
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....lly relevant. In the interest of protecting the goodwill and reputation of the group, it is strategically important for the parent to support the subsidiary and ensure that there is no default committed by the subsidiary in meeting its financial obligation. Effectively, the consequences of providing explicit guarantee are no different compared to implicit obligation which the parent undertakes in its own business interest. The consequences arising on account of default by the subsidiary resulting in deterioration in the credit rating of the group would be far more onerous. It was strongly contended that the underlying facts in the issue do not require benchmarking of the corporate guarantee since it is a transaction between subsidiary and h....
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....0% Grabal Alok Impex Limited TS-532-ITAT-2016(Mum)-TP ITA No. 1776/Mum/2015 2009-10 0.50% Nimbus Communications Ltd. Asst. Commissioner of Income Tax-11(1) TS-43-ITAT- 2016(Mum)-TP, ITA:: 1424/Mum/2014; ITA:. 1332/Mum/2014 2009-10 0.50% Everest Kanto Cylinder Ltd. vs ACIT TS-105-ITAT-2015(Mum)-TP ITA NO.550/Mum/2014 ITA NO. 1386/Mum2014 2008-09 0.50% Manugraph India Lid: OME TS-113-ITAT-2015(Mum)-TP ITA No. 4761/Mum/2013 2007-08 0.50% Aditya Birla Minacs Worldwide Ltd. vs DCIT TS-114-ITAT-2015(Mum)-TP ITA No. 7033/Mum/2012 ITA No. 7142/Mum/2012 2008-09 0.50% Rain Commodities Limited TS-594-ITAT-2015(HYD)-TP ITA No. 157/Hyd/2014 ITA No. 276/Hyd/2014 2009-10 and 2010-112008-09 0.50% Cox and Kings Ltd TS-540....
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....B of the Act, on corporate guarantee to be not international transaction, but the Hon'ble jurisdictional High Court has taken view that corporate guarantee is an international transaction and accordingly bound by the judicial decision and also to follow the jurisdictional High Court decision, we are of the considered view that corporate guarantee issued by the assessee on behalf of its AE subsidiary company is an international transaction. However, while arriving at rate the AO has taken comparables from commercial banks to at arrive at mean margin of 1.04% and adopted such rate to determine the ALP of corporate guarantee issued by the assessee. Since, the jurisdictional High Court in the case of CIT vs Everest Kanto Cylinder Ltd. has c....
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....td. v. DCIT (supra), reads as follow:- "8. We have heard the parties on this issue and perused the record. We notice that the Tribunal is consistently holding the transaction of providing Corporate Guarantee as an international transaction. Hence the same is required to be examined under Arms length principles. There should not be any dispute that the provision of Corporate guarantee to its subsidiary in order to enable it to avail loans would bring benefit to the subsidiary, in which case, it is proper to compensate the assessee for those benefits under Arms length principles. We notice that the TPO has made an adjustment of 2%, considering the interest benefit @ 4% and taking the view that half of the same should be attributed to the be....