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2015 (11) TMI 853 - AT - Income TaxAdjustment of corporate guarantee provided to associated enterprise - Held that:- As for the assessment year 2007-08 [2015 (8) TMI 40 - ITAT CHENNAI ], a similar adjustment was made wherein this Tribunal after placing its reliance on the decision of Bharti Airtel Ltd. v. Addl. CIT [2014 (3) TMI 495 - ITAT DELHI] found that providing corporate guarantee to its associated enterprise does not involve any cost to the assessee, therefore, it is outside the ambit of international transaction to which the arm's length price adjustment has to be made. Thus the addition made by the lower authorities to the extent of ₹ 5,49,000 is deleted. - Decided in favour of assessee. Disallowance of trade mark licence fee - Held that:- This Tribunal found that nothing uncommon in the assessee's making payment to use the trade mark "Redington" to M/s. Redington Distribution Pte. Ltd., Singapore. By placing its reliance on the order of this Tribunal in the assessee's own case for the assessment year 2009-10 and the judgment of the apex court in S. A. Builders Ltd. v. CIT (Appeals) [2006 (12) TMI 82 - SUPREME COURT ] this Tribunal found that the expenditure claimed by the assessee is an allowable expenditure. Since the facts are identical, this Tribunal is of the considered opinion that the claim of the assessee has to be allowed as business expenditure. - Decided in favour of assessee. Disallowance under section 14A - assessee now claims before this Tribunal that the investment was made out of its own funds accrued internally - Held that:- n the immediately preceding year the investment was ₹ 23,808.73 lakhs. No material is available on record with regard to internal accrual of funds in the regular course of its business activity. As rightly submitted by learned counsel, if the assessee has its own funds for making investment then there is no question of any disallowance of notional interest on the borrowed funds. Since the assessee specifically claims that no borrowed funds were diverted for investment in other companies, this Tribunal is of the considered opinion that funds available with the assessee on the date of making investment has to be examined. Accordingly, the orders of the lower authorities are set aside and the issue of disallowance made by the Assessing Officer under section 14A of the Act to the extent of ₹ 2,55,33,000 is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue afresh and find out the available interest-free funds with the assessee and thereafter decide the issue in accordance with law after giving a reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes.
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