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| The Tax Publishers2020 TaxPub(DT) 0930 (Visakhapatnam-Trib) INCOME TAX ACT, 1961
Section 92B
As revenue could not bring any evidence to establish that assessee had incurred any expenditure for extending corporate guarantee, therefore, corporate guarantee given by assessee on behalf of AE did not constitute international transaction within meaning of section 92B and no ALP adjustment could be made.
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Transfer pricing - International transaction - Extension of corporate guarantee on AE's behalf for business purpose - Assessee not having incurred any expenditure towards corporate guarantee.
Assessee had not incurred any expenditure towards corporate guarantee abroad for business purpose without charging any guarantee fee. TPO suggested ALP adjustment on account of arm's length guarantee commission. Held: Revenue could not bring any evidence to establish that assessee had incurred any expenditure for extending corporate guarantee, therefore, corporate guarantee given by assessee on behalf of AE did not constitute international transaction within meaning of section 92B and no ALP adjustment could be made.
Followed:ITAT Kolkata, “C' Bench in the case of DCIT v. EIH Ltd. (2018) 89 taxmann.com 417 (Kol-Trib) : 2018 TaxPub(DT) 0722 (Kol-Trib); Dr. Reddy Laboratories Ltd. v. Addl. CIT (2017) 81 Taxmann.com 398 (Hyd)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
INCOME TAX ACT, 1961
Section 92C
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