TaxTMI 
TaxTMI 
2023 (2) TMI 1457
X X X X Extracts X X X X
X X X X Extracts X X X X
....fficer (AO) on two counts: I) Determination of arm's length price (ALP) of Corporate Guarantee extended by assessee to its AE, Global Offshore Services B.V. (GOSBV) at 2% thereby making adjustment of Rs. 8,98,25,206/-. II) Determination of ALP of Performance Guarantee extended on behalf of AEs Garware Offshore International Services Pte. Ltd. (GOISPL) and Global Offshore services B.V. (GOSBV) at 2%, thereby making adjustment of Rs. 22,03,747/-. 2. The brief facts of the case as emanating from records are: The assessee is primarily engaged in the business of charter of offshore vessels. During the period relevant to assessment year under appeal, the assessee inter alia entered into international transactions with its AEs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nded corporate guarantee in respect of the borrowings made by AE. The assessee charged guarantee fee at 0.5%, the TPO increased the guarantee rate commission to 2% based on average bank guarantee commission. The learned Counsel submits that in AYs 2011-12 and 2012-13 in assessee's own case, the Tribunal had accepted 0.25% corporate guarantee commission at arm's length. The learned Counsel pointed that the Tribunal upheld 0.25% guarantee commission. After considering the fact that the fair market value of the vessels exceeded the loan amount. The learned Counsel further submits that in respect of performance guarantee, the assessee had not charged any fee. The TPO determined the ALP thereof at 2% which was upheld by the DRP. The learned AR p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Sr. No Name of Vessel Acquired in AY Liability (USD in Mn) Book Value as on March 2017 (USD- MN) Market Value as on March 2017* (USD in Mn) 2011-12 2012-13 2017-18 1 MV Cristal (earlier known as MV Beaucephalus) ** 2011-12 48.17 48.13 35.08 50.92 49.00 as on November 2016 2 MV Makalu 2014-15 - 38.35 47.68 45.00 as on November 2016 3 MV Shergar 2013-14 - 6.44 13.56 10.00 as on November 2016 4 MV Olympus 2015-16 30.51 37.75 44.75 as on October 2014 Total 48.17 110.38 149.9 1 148.75 6. We have heard the submissions made by rival s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e guarantee, since no reference was made to the TPO, guarantee fee charged by the assessee was accepted by the Department. The assessee has also filed a chart giving comparative analysis of loan liability and market value of the vessels. An analysis of the same shows that the market value of the vessels is much more than the loan liability. Thus, the loan liability is fairly secured against the assets of the AE. The upward adjustment made by the TPO is thus, directed to be deleted. The assessee succeeds on ground no. 1 of the appeal. 7. In ground no. 2 of appeal, the assessee has assailed ALP adjustment in respect of performance guarantee. We find that in AYs 2011-12 and 2012-13 arm's length rate of performance guarantee commission at 0.....