TaxTMI 
TaxTMI 
2025 (1) TMI 1002
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....e Act"] for the AY 2020-21. 2. Brief facts of the case are that the assessee-company is engaged in the business of manufacture and trading of edible oils and its by-products, bakery shortenings and margarine, specialty fats by importing raw material from its Associated Enterprises, filed its original return of income on 30/12/2020 for the AY 2020-21 declaring an income of Rs. 39,08,11,110/- and book profit under MAT is shown at Rs. 57,79,23,496/-. The return was initially processed U/s. 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and a notice U/s. 143(2) was issued to the assessee and in response the assessee's Authorized Representative appeared from time to time and furnished the details as called for ....
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.... ALP adjustment, the transaction has to qualify as an 'international transaction' in the first stage. Referring to section 92B(1) the assessee submitted before the Ld. TPO that the said section provides for computation of income arising from international transaction by applying arm's length principle. The assessee also submitted that no service has been rendered by 3F India and further when a parent company extends an assistance to the subsidiary, being an AE, such as corporate guarantee to a financial institution for lending money to the subsidiary, which does not cost anything to the parent company and which does not have any bearing on its profits, income losses or assets, it will be outside the ambit of international transaction u/s. 9....
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....nt order dated 29/09/2023, the assessee raised its objections before the Ld. Dispute Resolution Panel, Bengaluru ["Ld. DRP"]. The Ld. DRP, after hearing the submissions of the assessee and on perusal of the objections raised against the TP adjustment made by the Ld. TPO, observed that they do not find any merit in the contentions raised by the assessee and the grounds raised by the assessee are rejected and accordingly passed the directions dated 29/05/2024. Giving effect the directions of the Ld. DRP, the Ld. AO passed the final assessment order on 24/06/2024 and determined the total income of the assessee at Rs. 41,47,47,932/-. Thereafter, the Ld. AO [Deputy Commissioner of Income Tax, Circle-1(1), Hyderabad passed order U/s. 143(3) r.w.s....
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....t prejudice to the above ground, the Hon'ble DRP erred in not appreciating the fact that corporate guarantee fee @ 0.5% has been computed by the company for AY 2020-21 and is offered to tax in computation of income for the AY 2023-24. 6. Other grounds: a. Levy of Interest U/s. 234B of the Act. b. Levy of interest U/s. 234C of the Act. c. initiating penalty proceedings U/s. 271(1)(c) of the Act. " 5. In the grounds of appeal, though the assessee has raised six grounds, but the only issue involved is: (i) Whether the TP adjustment made by the Ld. TPO in the corporate guarantee commission @ 1.9% on the amount guaranteed as corporate guarantee given to AEs is justifiable or not? 6. At the outset, the....
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....e Bombay High Court in the case of CIT vs. Everest Kanto Ltd reported in 378 ITR 57 this Bench of the Tribunal has held as under: "8. We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. We have also gone through the decision of this Tribunal in the assessee's own case for the AY 2014-15 (ITA No.473/Viz/2017, dated 16/2/2023) wherein the Tribunal, after analyzing the issues at length, held that the corporate guarantee commission is an international transaction and should be charged @ 0.50% on the corporate guarantee amount given to the AEs. For the sake of reference and brevity, we hereby extract the relevant paragraphs of the said Tribunal's order for the AY 2014-....
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.... considered view that the corporate guarantee commission is an international transaction and should be charged @ 0.50% on the corporate guarantee amount given to the AEs. We therefore partly allowed the grounds raised by the assessee." 9. Considering the identical facts and circumstances of the instant case with that of the assessee's own case decided by this Tribunal in ITA No.473/Viz/2018 (supra) as well as following the principles of consistency and respectfully following the decision of this Tribunal, we hereby hold that the corporate guarantee commission is an international transaction and should be charged @ 0.50% on the corporate guarantee amount given to the AEs. It is ordered accordingly. Thus, the Ground No.1 raised by the asse....