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2017 (4) TMI 864 - AT - Income TaxTPA - ALP - Addition on corporate guarantee given to Associated Enterprise (AE) - Held that:- As decided in Videocon Industries vs. DCIT [2017 (3) TMI 187 - ITAT MUMBAI] in similar circumstances the details of loans vis-à-vis the security thereof had already been reproduced above. It has also been brought on record that State Bank of India has charged bank guarantee commission to assessee by giving 50% concession on the rate of 1.75% which works out to approximately 0.875%. If various factors and risk involved are evaluated which is quite normal under the foreign guarantee like, country risk, currency risk and entity risk etc., then charging of corporate guarantee commission would fall down below 0.5%. Thus, this constitutes a kind of internal CUP available to the assessee to benchmark the transaction of giving corporate guarantee/letter of undertaking. Moreover, there are catena of decisions wherein this Tribunal has held that corporate guarantee commission around 0.50% can be accepted as ALP. Accordingly, we hold that the corporate guarantee commission fee which is to be recovered from AE should be 0.50% which would meet the arms length requirement. Thus, under the facts and circumstances of the case, we direct the TPO/Assessing Officer to take the corporate guarantee fee @ 0.50% and make the adjustment accordingly Disallowance of depreciation on intangible assets confirmed Disallowance on account of provisions for post retirement medical scheme - Held that:- As held in assessee’s own case for Ay 2009-10 similar liability has been held to be an unascertained liability which was not allowable as a deduction under section 37(1) of the Act. Disallowance of prior period expenses - Held that:- Assessee has not filed any documentary evidence even before us to substantiate his claim or the payment receipt with regard to service tax for claiming exemption u/s 43B of the Act. However, considering the contention of ld. AR of the assessee, we restore this ground of appeal to the file of AO to examine the issue afresh, if the claim of the assessee is covered by the prevision of section 43B of the Act and passed the order in accordance with law.
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