2024 (12) TMI 420

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....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 notices were issued and served upon the assessee. A reference u/s 92CA of the Act was made for computation of Arm's length price (ALP) in relation to international transactions as reported in Form 3CEB filed by the assessee. The assessee is having following AEs with whom it had international transactions during the year:- Sr. No. Name of the AE Registered Office Location Nature of business carried on by the AE 1. TQ Services Europe GmbH Fritze-Vomfe Ide-Str. 34, D-40547 Dusse Idorf Entity is engaged in providing inspection services in European markets 2. Industrial Quality Services LLC A 16, 5th Floor, Building No. 1/A/30, Muscat Grand Mall, AlKhu wair, Muscat, Sultanate of Oman Primarily engaged in rendering service activities incidental to extraction of petroleum and natural gas, excluding surveying. 3. ....

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....ame Rate Standard Chartered Bank 0.75% CITI Bank 0.90% Union Bank of India 1.20% HDFC 1.80% IDBI 2.00% State Bank of India 2.10% ICICI 2.50% Count 7 Median 1.80% 35th Percentile 1.20% 65th Percentile 2.00% 5.1.1. The TPO found that the average bank guarantee rates are 1.80%. Accordingly, a show cause notice was issued to the assessee explaining it to show cause as to why adjustments should not be made @1.80% on corporate guarantee provided by the assessee to its AE. The assessee filed detailed reply strongly contending that the relationship between the parent and the subsidiary is significant and economically 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 deteriorat....

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.... 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-ITAT-2015(Mum)-TP I.T.A. No. 1354/M/2014 I.T.A. No. 7770/M/2014 2010-11 0.50% Manugraph India Ltd vs DCIT TS-463-ITAT-2015(Mum)-TP ITA No. : 491/Mum/2015 ITA No. : 1072/Mum/2015 2007-08 0.50% M/S Everest Kento Cylinders Ltd TS-200-HC-2015(BOM)-TP INCOME TAX APPEAL NO. 1165 OF 2013 2006-07 And 2007-08 0.50% Godrej Sara Lee Ltd vs. ACIT ITA No. : 7227/Mum/2011 2005-06 0.50% Godrej Household Products Ltd. (TS-330-ITAT-2013(Mum)-TP) 2006-07 0.50% Reliance Industries Limited vs. ACIT in ITA No.4475/Mum/2007 2006-07 0.38% M/s. Asian Paints Ltd. v. ACIT, LTU ITA No. 408/Mum/2010 2005-06 0.25% M/s. Everest Kanto Cylinder Ltd. vs. DCIT ITA No.542/Mum/2012 2007-08 0.60% Asst. CIT v M/s Nimbus Communications Ltd. 2005-06 0.50% Asst. CIT v M/s Nimbus Communications Ltd. 2006-07 and 2007-08 0.50% 8. It would be pertinent to refer to the decision of the Co-ordinate Bench in the case of II & Fs Technologies Ltd. Mumbai vs. Asst. Cir -14(2)(1), Mumba....

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....e Tribunal had imputed 0.50% as cost, instead of 2% arrived by the TPO. (A copy of TPO's order u/s 92CA in the case of Manipal Global Education Services Pvt.Ltd. is placed on record). The TPO in the cited case also arrived at 2% by taking the credit rating of the tax payer just like this case. The relevant finding of the ITAT in the case of Manipal Global Education Services Pvt. Ltd. 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 benefit of the assessee. However, we notice that the Hon&#....