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2023 (10) TMI 1363 - AT - Service TaxLevy of Service tax on the corporate guarantee given to the subsidiaries by the appellants - banking and other financial services - demand confirmed on the basis of the calculation of notional income made by the appellants as per the requirements under the Transfer Pricing under the Income Tax Act, 1961 - Income Tax department had charged guarantee commission as arm’s length commission on the issuance of corporate guarantee to overseas companies - HELD THAT:- The assessment order passed by the Income Tax Officer was appealed against before the learned Commissioner of Income-Tax (Appeals), Mumbai, which was allowed in favour of the appellants, with direction to the assessing officer to delete the addition, holding that no guarantee fee was actually charged on the loans concerned. Further, it is also found that the appellants did not charge any consideration for providing the corporate guarantees. Insofar as levy of service tax is concerned, the same should be on the amount of consideration received for provision of such service. In the present case, since there is no involvement of any commission amount in the form of consideration, the appellants cannot be saddled with the service tax liability as demanded in the impugned order There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellants - appeal allowed in favour of appellant.
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