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2016 (5) TMI 262 - AT - Income TaxTransfer pricing adjustment - application of the rate of 3% take by the Transfer Pricing Officer to determine the arm's length rate of the international transaction of provision of corporate guarantee on behalf of the associated enterprise - Held that:- The Hon'ble Bombay High Court in the case of Everest Kento Cylinders Ltd.(2012 (11) TMI 1099 - ITAT MUMBAI) considering a somewhat similar situation has explained that instances of commercial banks providing guarantees could not be compared to instances of issuance of corporate guarantee. As per Hon'ble Bombay High Court, when commercial banks issue bank guarantees, the same is quite distinct in character, than the situation where a corporate issues guarantee to the effect that, if a subsidiary associated enterprise does not repay a loan, the same would be made good by such corporate. Keeping the said ratio it is quite clear that the manner in which the Transfer Pricing Officer has proceeded to determine the arm's length rate based on the probable rate being charged by the commercial banks is not justified. In this view of the matter, we are unable to approve 3% rate of guarantee commission fee determined as arm's length rate by the income-tax authorities. In the alternative, the addition that is required to be sustained is the position canvassed by the assessee before the Transfer Pricing Officer i.e. adoption of 0.50% as arm's length rate for the purpose of determining the arm’s length income on account of guarantee commission fee in the present case. Considering the entirety of facts and circumstances of the case and on the basis of the material available on record, we, therefore, proceed to uphold the rate of 0.50% for the purpose of determining the arm's length rate of the guarantee commission fee. Depreciation on data cable and other computer peripherals - @15% OR 60% as per assessee - Held that:- It was a common point between the parties that similar issue has been decided against the assessee for assessment year 2007-08 ) by following earlier decision of the Tribunal for assessment year 2006-07. Depreciation @ 15% confirmed - Decided against assessee
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