| |
| The Tax Publishers2019 TaxPub(DT) 7194 (Kol-Trib) INCOME TAX ACT, 1961
Section 92CA
It could be verified from the fact that no third party would have agreed to grant loans, on an independent basis, to the tune of Rs. 5 Crores to Tega Bahamas (AE) given its skewed debt-equity ratio reflected in the balance sheet, as equity funding was mere Rs. 23 Lakhs, therefore, corporate guarantee was a shareholder's activity and no TP adjustment on account of corporate guarantee fee was called for.
|
Transfer pricing - Determination of ALP - Provision of corporate guarantee - Shareholder's activity
Assessee provided corporate guarantee for loans taken from ICICI Bank, U.K. TPO suggested ALP adjustment in respect corporate guarantee fee @2.5%. Assessee's case was that provision of corporate guarantee was in the nature of mere shareholder activity.Held: It could be verified from the fact that no third party would have agreed to grant loans, on an independent basis, to the tune of Rs. 5 Crores to Tega Bahamas (AE) given its skewed debt-equity ratio reflected in the balance sheet, as equity funding was mere Rs. 23 Lakhs, therefore, corporate guarantee was a shareholder's activity and no TP adjustment on account of corporate guarantee fee was called for.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10 to 2011-12
INCOME TAX ACT, 1961
Section 92C
 SUBSCRIBE FOR FULL CONTENT
|