Transfer pricing interest, guarantee fee, and exempt-income disallowance relief upheld on consistency and prior precedent

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Transfer pricing on loans to associated enterprises was confined to the LIBOR-based rate already accepted in earlier precedent, so no further interest adjustment was warranted. Corporate guarantee commission was retained at 0.35% on consistency with earlier years and the interest-saved approach. Deduction for rail and water systems as infrastructure facility under section 80-IA was allowed because the earlier orders had attained finality. The section 14A disallowance was restricted: interest disallowance was deleted where interest-free funds exceeded investments, and administrative expenditure was computed only on investments yielding exempt income, with corresponding book-profit relief. The gain on prepayment of sales tax deferral was treated as capital receipt, and the write-back of project creditors was not taxable under section 28(iv).....