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| The Tax Publishers2020 TaxPub(DT) 3401 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
As regards corporate guarantee given in favour of AE, TPO was directed to consider ALP of corporate guarantee fee at 0.5% as against 3% applied by TPO.
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Transfer pricing - Determination of ALP - Corporate guarantee fee -
Assessee provided corporate guarantee to its AE on term-loan facility of USD 100 million issued by Standard Chartered Bank and assessee charged 0.25% guarantee commission from. AE. TPO considered guarantee fee 3.006% as at arm's length and thus suggested TP adjustment. Held: TPO was directed to consider ALP of corporate guarantee fee at 0.5% and further reduce 0.25% already charged by assessee and make adjustment accordingly.
Followed:Virgo Engineers Ltd. v. Dy. CIT IT(TP)A No. 3718/Mum/2017 for assessment year 2011-12, dated 8-1-2019 and Everest Kanto Cylinder Ltd. v. Dy. CIT 34 Taxmann.com 19.
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 115JB
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