Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 743 - AT - Income TaxTransfer pricing - arms length interest rate on loan for loan given to Associated Enterprise. - Held that:- CIT(A) has rightly held, the arm’s length interest rate for a financing transaction in France should take into account only the average French interest spread and not the average European interest spread as admittedly the conditions in entire European financial market are not the same. Determination of arms length price on the corporate guarantee provided by the appellant company to the banks on behalf of Associated Enterprise - Held that:- the 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 92B of the Act. We have also held, taking note of the insertion of Explanation to Section 92B of the Act, that the issuance of corporate guarantees is covered by the residuary clause of the definition under section 92B of the Act but since such issuance of corporate guarantees, on the facts of the present case, did not have "bearing on profits, income, losses or assets", it did not constitute an international transaction, under section 92B, in respect of which an arm's length price adjustment can be made. Decided against the revenue.
|