TMI Blog2018 (6) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ing those dates. Hence, as per the decision rendered by Hon'ble Bombay High Court in the case of HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT], no disallowance out of interest expenditure is called for as per Rule 8D(2)(ii) of the I.T Rules. Disallowance to be made under rule 8D(2)(iii) out of administrative expenses, only those investments which have yielded exempt income have to be considered for working out the average value of investments, as per decision rendered by Delhi Special Bench of the Tribunal in the case of Vireet Investment (P) Ltd. [2017 (6) TMI 1124 - ITAT DELHI]. As stated earlier that the assessee has furnished a statement of working of disallowance under Rule 8D(2)(iii) by considering only those investments which have yielded exempt income, as per which the disallowance worked out to ₹ 32.71 lakhs, i.e. more than the amount disallowed by the assessee. Hence for the limited purpose of verifying the above said statement, we restore this issue to the file of the Assessing Officer. If the is satisfied with the workings given by the assessee, the disallowance u/s. 14A of the Act should be restricted to ₹ 41.33 lakhs, i.e. the voluntary disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely. He submitted that the Overdraft facility is a facility given by the bank to its AE, which would enable the AE to withdraw funds whenever required. He submitted that the interest shall be charged by the bank on the actual amount of loan taken by the assessee. He submitted that the AE is having its own asset and receivables and has also provided margin of 25% to IDBI Bank to avail over draft facility. Accordingly, he submitted that the IDBI bank has taken corporate guarantee from the assessee as a safer course only. In respect of corporate guarantee given on the Guarantee given by IDBI on behalf of M/s Taj TV, the Ld A.R submitted that it is only a counter guarantee given by the assessee to IDBI. The learned AR submitted the risk involved in the counter guarantee is very much lower, since the liability for the assessee would arise only if IDBI Bank invokes main guarantee in case of failure on the part of Taj TV to honour its commitments. In view of the backing of assets, the possibility of Taj TV failing to honour its commitments and the possibility of invoking guarantee given by the assessee is very less. 6. The Learned AR submitted that the issue relating to corporate guar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en guarantee to IDBI Bank for both facilities named overdraft facilities and guarantee facility extended by it to AE of the assessee. Hence, TP adjustment may be made at uniform rate of 0.5% on both the facilities. He submitted that the guarantee is included in the definition of International Transaction in sec. 92B of the Act. 9. We have heard rival contentions and perused the record. We noticed that the Coordinate Bench of the Tribunal has considered the issue relating to giving of corporate guarantee in the assessee s own case and has held that guarantee commission should be worked out at 0.50% of the average amount of loan outstanding. Before us, the assessee has argued that the corporate guarantee given by the assessee should not be considered to be an international transaction. However, since a particular view has already taken by the Coordinate Bench of the Tribunal in assessee s own case in A.Y. 2008- 09, we prefer to follow the same. Accordingly, in respect of corporate guarantee given on overdraft facility, following the order passed by Tribunal in AY 2008- 09, we direct the Assessing Officer to restrict TP adjustment to 0.5% of average amount of loan outstanding dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring those dates. Hence, as per the decision rendered by Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (supra), no disallowance out of interest expenditure is called for as per Rule 8D(2)(ii) of the I.T Rules. 14. With regard to disallowance to be made under rule 8D(2)(iii) out of administrative expenses, only those investments which have yielded exempt income have to be considered for working out the average value of investments, as per decision rendered by Delhi Special Bench of the Tribunal in the case of Vireet Investment (P) Ltd. (supra). The assessee has given working of the disallowance u/r. 8D(2)(iii) by considering only those investments which have yielded dividend income. As per the working, disallowance works out to ₹ 32.71 lakhs whereas, the assessee itself has disallowed a sum of ₹ 41.33 lakhs. Accordingly, learned AR submitted that the disallowance made by the assessee voluntarily should be sustained and enhancement made by the Assessing Officer should be excluded. We agree with the contentions of the assessee in view of the decision rendered by the Special bench in the case of Vireet Investments (supra). We have stated earlier that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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