TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1323
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.... "1. The Ld. CIT(Appeals) erred both in law and on facts of the case in granting relief to the assessee. 2. Whether the on the facts and in the circumstances of the case and in law, the CIT(Appeals) is justified in directing to charge corporate guarantee fee @ 0.53% relying on decision of the CIT(A)/ DRP for earlier assessment years without undertaking an independent comparability analysis for the year under consideration. 3. Whether on the facts and circumstances of the case and in law, the CIT(Appeals) is justified in directing to charge the corporate guarantee fee at 0.53% contravening the India Transfer Pricing Regulations, which prescribe that the data to be used for the purpose of comparability analysis should relate to the ye....
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....he notice u/s 143(2) of Income Tax Act, 1961 (the Act) was issued on 22.09.2019. It was duly served upon the assessee. Subsequently, notice u/s 142(1) was issued on 15.12.2020 which was served on the assessee. The case was also referred to the TPO for determining ALP and the adjustment of Rs. 22,80,06,000/- was determined on account of ALP. Subsequently the assessment was completed by making certain additions / disallowance including addition on account of TP adjustment at Rs. 22,80,06,000/- and disallowance u/s 14A of the Act at Rs. 10,23,73,985/-. Thus, assessment was completed u/s 143(3) r.w.s. 144C(3) of the Act assessing the total income of Rs. 361,27,68,435/-. 4. Feeling aggrieved with such assessment order, assessee filed appeal bef....
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.... the Tribunal had taken the corporate guarantee at 0.5% as against 1% determined by the DRP. In para 8.3 of the order passed in the case of M/s. Aurobindo Pharma Limited (ITA 485/Hyd/2022 dt.27.04.2023) the Tribunal has held as under : "8.3. We have considered the submissions and found that the charges paid by the assessee cannot be compared for the purposes of determining the ALP of corporate guarantee commission. In our view, no third party would provide similar type of services/corporate guarantee on behalf of its AE and expose itself to the risk of giving the corporate guarantee. Therefore, the charges paid by the assessee to SBI cannot be compared for the purpose of determining the ALP of corporate guarantee commission. The Co-ordina....
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....nd claiming that 1.8% should be applied as against 0.53% as applied by the ld.CIT(A). As the ld.CIT(A) had decided the issue on the basis of the order passed by the Tribunal in the case of assessee in A.Ys. 2012-13 2016-17 to 17-18 and further this Bench in the case of M/s. Aurobindo Pharma Limited (supra) also applied 0.50% as corporate guarantee, therefore, we do not find any merit in the appeal of the Revenue and uphold the order of ld.CIT(A) whereby the ld.CIT(A) has restricted the interest payable on corporate guarantee at 0.53% instead of 1.8% as determined by the TPO. Thus, these grounds of the Revenue are dismissed. 11. The other grounds i.e., grounds 5 to 7 raised by the Revenue are with respect to Section 14A of the Act. In this ....
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....4A of the Act by insertion of explanation by Finance Act, 2022 and also to the decision of the Guwahati Bench of the Tribunal, referred above. 7. In the case of Era Infrastructure (India) Ltd., (supra) Hon'ble Delhi High Court considered the effect of amendment made by the Finance Act, 2022 to section 14A of the Act by insertion of a non obstante clause and explanation after the proviso, subsequent to the decision of the Hon'ble Delhi High Court in the case of PCIT vs. IL&FS Energy Development Co. Ltd., (2017) 84 taxmann.com 186, Hon'ble Delhi High Court and also the memorandum of Finance Bill, 2022 accordingly to clauses 5 to 7 thereof. The Hon'ble High Court analysed the same in the light of the decision of the Hon'....