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2017 (2) TMI 1085 - AT - Income TaxTPA - CIT-A applying Arm’s Length Price @ LIBOR + about 2% (assessee’s appeal in AY 2006-07) and reducing the ALP adjustment of LIBOR+ about 0.75% - Held that:- The correspondence in question is with the assessee’s banker, i.e. State Bank of India, through which the remittance to M/s. Rubamin FZE, UAE was made alongwith RBI approval. Therefore, the document assumes a regulatory character which is in the files of the schedule bank and RBI. The assessee contends that the other copious evidence did not earlier satisfy the TPO about the business exigencies of advancing the loans; hence the additional evidence. A catena of judgments is available by now wherein the LIBOR+ and varying degree of incremental value has been adopted, which is evident from the fact that ld. CIT(A) has adopted a rate of LIBOR+ 2% in AY 2006-07 and 0.75% in AY 2007-08. In the entirety of facts and circumstances, we are inclined to admit the additional evidence and acceding to the alternate request of the ld. DR to remit the issue back to the ld. TPO to decide the same de-novo in view of above observations, for which the assessee has no objection. Allowability of deduction u/s 80IB on the amount of sales tax subsidy - Held that:- Once the sales tax subsidy is held to be Revenue in nature, the same amount becomes the income of the assessee’s industrial undertaking; consequently, deduction u/s 80IB is to be allowed in favour of the assessee. Respectfully following the Hon’ble Supreme Court judgments in the case of M/s. Shree Balaji Alloys [2016 (4) TMI 1161 - SUPREME COURT] & M/s. Meghalaya Steel Ltd (2016 (3) TMI 375 - SUPREME COURT ) this ground of the assessee is allowed. Corporate Guarantee given by the assessee being a domestic transaction is outside the purview of TP provisions is claimed to be covered in favour of the assessee and against Revenue in the case of Micro Inks Limited vs. ACIT, reported in [2015 (12) TMI 143 - ITAT AHMEDABAD] wherein held he issuance of corporate guarantees were in the nature of shareholder activities- as was the uncontroverted claim of the assessee, and, as such, could not be included in the 'provision for services' under the definition of 'international transaction' under section 92 B of the Act.
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