The Tax Publishers2019 TaxPub(DT) 7482 (Kol-Trib)

INCOME TAX ACT, 1961

Section 92B

Explanation to section 92B was introduced by Finance Act, 2012 only on 10-6-2013. Hence, the Explanation could be made applicable only from assessment year 2013-14 onwards and thus provision of corporate guarantee to AE was not an international transaction during the concerned year and accordingly, no ALP adjustment was called for.

Transfer pricing - International transactions - Extension of corporate guarantee to financial institution for lending money to AE before introduction of Explanation to section 92B -

Assesee extended corporate guarantee to financial institution for lending money to its AE abroad. TPO considered this as international transaction in view of explanation to section 92B and accordingly suggested ALP adjustment towards gurantee fee. Held: Explanation to section 92B was introduced by Finance Act, 2012 only on 10-6-2013. Hence, the Explanation could be made applicable only from assessment year 2013-14 onwards and thus provision of corporate guarantee to AE was not an international transaction during the concerned year and accordingly no ALP adjustment was called for.

Followed: Dy.CIT v. EIH Ltd. [ITA Nos. 110 & 153 (Kol) of 2016, dt. 12-1-2018] : 2018 TaxPub(DT) 722 (Kol-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

INCOME TAX ACT, 1961

Section 92C

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