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2017 (6) TMI 179 - AT - Income TaxALP addition in respect of transaction relating to interest on advance for investment - assessee has given advances to its AE’s - Held that:- Since the assessee has not carried/submitted any comparative study before finalizing the LIBOR rate, we find it appropriate to direct the AO to follow the direction of DRP to compute the interest rate at LIBOR + 200 points. Accordingly, ground raised by the assessee and revenue are dismissed. ALP addition in respect of transaction relating to corporate guarantee - Held that:- As decided in case of Four soft Ltd. [2011 (9) TMI 634 - ITAT HYDERABAD ] the corporate guarantee is very much incidental to the business of the assessee and hence, the same cannot be compared to a bank guarantee transaction of the Bank or financial institution. In view of this matter, we hold that no TP adjustment is required in respect of corporate guarantee transaction done by the assessee company. The amendment to section 92B by the Finance Act, 2012, this amendment can only be prospective and not retrospective as held in the case of Siro Clinpharm Pvt. Ltd. [2016 (5) TMI 633 - ITAT MUMBAI ]. This provision is applicable from AY 2013-14 onwards. Hence, addition of corporate guarantee in this AY is deleted. Accordingly, the ground raised by the assessee is allowed Disallowance u/s 14A - Held that:- Since the assessee has not received any exempt income during the year, we direct the AO/TPO to delete the addition made on this count. - Decided in favour of assessee.
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