The Tax Publishers2021 TaxPub(DT) 2756 (Hyd-Trib)

INCOME TAX ACT, 1961

Section 92B

The Madras High Court's latest decision in Redington India Pvt. Ltd. v. Dy. CIT, [Tax Appeal Nos. 590 and 591 of 2019, dt. 10-12-2020 : 2020 TaxPub(DT) 5340 (Mad-HC)] had settled the law that a corporate guarantee, indeed, forms an international transaction and covered by Explanation to section 92B with retrospective effect as well, thus, appeal of assessee was dismissed.

Transfer pricing - TP adjustment - Adjustments pertaining to corporate guarantees -

Assessee filed this appeal contending that a corporate guarantee is a shareholder's activity which was wrongly treated as an international transaction under section 92B read with Explanation inserted by the Finance Act, 2012 with retrospective effect from 1-4-2002. He next sought to draw a distinction between the twin impugned assessment years that such a corporate guarantee furnished in assessment year 2012-13 could not fall under section 92B since the foregoing Explanation came to be inserted vide Finance Act, 2012 as against financial year involved herein 2011-12 only.Held: There was no merit in assessee's instant legal argument in principle since the Madras High Court's latest decision in Redington India Pvt. Ltd. v. Dy. CIT, [Tax Appeal Nos. 590 and 591 of 2019, dt. 10-12-2020 : 2020 TaxPub(DT) 5340 (Mad-HC)] had settled the law that a corporate guarantee indeed forms an international transaction and covered by Explanation to section 92B with retrospective effect as well. Thus, appeal was dismissed.

Followed:Pr. CIT v. Redington (India) Limited [Tax Appeal No. 590 and 591 of 2019, dt. 10-12-2020] : 2020 TaxPub(DT) 5340 (Mad-HC)

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13 & 2013-14


INCOME TAX ACT, 1961

Section 92C

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