TMI Blog2022 (12) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the learned counsel for the assessee are concerned, these in our opinion are distinguishable and not applicable to the facts of the present case. In our opinion, every case depends on its own sets of facts and cannot be applied as a binding precedent in other cases. In view of the detailed reasoning given by the DRP/A.O., we uphold the order of the A.O./TPO/DRP on this issue. Accordingly, the grounds raised by the assessee on this issue are dismissed. - ITA No.1893/Hyd/2018 - - - Dated:- 23-6-2022 - SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER Appellant By : Shri PVSS Prasad Respondent By : Shri Rajendra Kumar ORDER Per Shri Rama Kanta Panda, A.M. : This appeal filed by the assessee is directed against the order dt.20.07.2018 passed by the Dy. Commissioner of Income Tax, Circle 14(1), Hyderabad passed u/s. 143(3) r.w.s. 144C of the Income Tax Act, 1961 (in short the Act ) for the Assessment Year 2014-15. 2. Facts of the case, in brief, are that the assessee is a company registered in India under the Companies Act, 1956, which was formerly existing under the name of Animation and Multi Media Pvt. Ltd. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Guarantee Fee DQ Entertainment (Ireland) Ltd. Nil Trade receivables. DQ Entertainment (Ireland) Ltd. 85,43,01,143 He noted that the assessee company has chosen TNMM as MAM for benchmarking the transactions relating to production, income and receipt of professional consultancy fees. For transactions relating to reimbursement of expenses and loan given, the assessee company has chosen CUP as the MAM. For investment in equity share capital, Corporate Guarantee fee, trade receivables and reimbursement receivable, the assessee company has chosen MAM method. 3. After considering the submissions made by the assessee from time to time, the TPO made the following TP adjustments : S.No. International Transaction Adjustment in Rs. 1 Profit attributable 2,84,73,482 2 Commission on Corporate Guarantee 86,96,183 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment of Rs.1.69,66,363/- failing to appreciate that it is the onerous responsibility of parent company DQE India to provide corporate guarantee to its subsidiary DQE Ireland, which is to be categorized as shareholders activity. 6. The Ld. TPO has erred in law and facts in issuing a letter to AO dated August 30, 2018 for enhancing the Transfer Pricing adjustment failing to appreciate the fact that the Final Assessment Order u/s 143(3) r.w.s. 144C dated July 20, 2018 has already been passed by the AO by then. 7. The Ld. AO has erred in law and facts by pronouncing a modification/consequential order dated August 31, 2018 giving effect to the letter of TPO, thereby enhancing the adjustment made in the Final Assessment Order dated July 20, 2018 without appreciating the fact that the Final Assessment Order passed consequent to DRP directions cannot be modified further as per law. 8. Without prejudice to the above grounds the Ld. AO vide his modification order dated August 31, 2018 erred in law and facts by not providing the Minimum Alternate Tax ( MAT ) credit u/s. 115JAA which the Appellant is genuinely eligible for. 9. Any other ground that may be urged at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the TPO has computed the guarantee fee at 1.6% p.a. to the assessee company in connection with corporate guarantee given to the AE of Rs.106,03,97,701 at Bank guarantee rate of SBI which is taken at 1.6% which resulted an adjustment of Rs.169,66,383 for the A.Y. 2013-14. Referring to various decisions, he submitted that corporate guarantee at the rate of 0.27% to 0.5% has been held as reasonable. He further submitted that the assessee, in the instant case, has collected whatever amount it has incurred for the bank guarantee and nothing has been paid from the assessee s coffers. He submitted that charging of commission @ 1.6% on the corporate guarantee appears to be on the higher side and therefore the same should be reduced to 0.5%. For the above proposition, he relied on the decision of the co-ordinate Bench of the Tribunal in the case of DCIT Vs. Lanco Infratech Ltd. (2017) 81 taxmann.com 381 and various other decisions. 9. Learned Departmental Representative, on the other hand, supported the orders of A.O./TPO/DRP. So far as the Transfer Pricing Adjustment is concerned, he submitted that although the issue has been decided by the Tribunal in the preceding assessment year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which may be taken to compute the ALP adjustment on guarantee commission. He accordingly submitted that the order of the Assessing Officer on this issue be upheld. 10. We have heard the rival arguments made by both the sides, perused the orders of authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited by both sides. So far as the Transfer Pricing adjustment of Rs.2,84,73,482 on account of profit attributable is concerned, we find the issue stands decided in favour of the assessee by the decision of the co-ordinate Bench of the Tribunal in assessee's own case in ITA No.1890/Hyd/2017 order dt.17.08.2017 for the Assessment Year 2013-14 where the Tribunal has held as under : 4.3 Having regard to the rival contentions and material on record, we find that this issue is covered in favour of the assessee by the decision of the coordinate bench of this Tribunal in assessee s own case for AY 2010-11 onwards; and one of us i.e. JM is signatory to the orders of the Tribunal for AYs 2011-12 and 2012-13. For the sake of convenience and ready reference, we reproduce the findings of the Tribunal in AY 2012-13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd existences of group companies. There is no doubt, there exists tax planning. There can be tax planning within the four corners of the taxation laws. There is enough mechanism in the existing Act and also there is DTAA - arrangement with Ireland, which will take care of the situations of tax avoidance. The revenue has not brought any cogent evidence to prove that there exists any tax avoidance. In our considered view, the action of the TPO is not justified and accordingly, the grounds raised by assessee are allowed . 7. Since the facts and circumstances of the case for the A.Y before us are similar, respectfully following the decision of the Coordinate Bench, we allow the assessee's ground of appeal and hold that there is no international transaction during the relevant financial year. Grounds of appeal 2 3 are accordingly allowed. Respectfully following the said decision, we hold that there is no international transaction during the relevant AY and the addition made by the AO is accordingly deleted. Thus, Ground Nos. 2 3 are allowed. Since the facts of the impugned assessment year are identical to the facts of the assessee's own case decided in the immed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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