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2018 (9) TMI 293 - HC - Income TaxTPA - ALP determination - adopt 0.5% as the ALP of the guarantee commission charges provided by the Respondent Co. - Held that:- Referring to The Commissioner of Income Tax, Mumbai Vs M/s Everest Kento Cylinders Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT] held the considerations which applied for issuance of a corporate guarantee are distinct and separate from that of a bank guarantee, and accordingly, took a view that the commission charged cannot be called in question, in the manner Transfer Pricing Officer had done. It was the view of the Division Bench that the comparison is not as between like transactions but are between guarantees issued by the commercial banks on the one hand as against the corporate guarantee issued by a holding company for the benefit of its associated enterprise on the other. Money advanced to the AE as share application money to be considered as loan - this money was being utilized as working capital and not deposited in an escrow account in cases where monies are received in cases of share application - Held that:- There was a delay in issuing the shares against the share application money given by the assessee to its AE, however, the assessee has duly explained the cause of delay and it was not a deliberate delay for using the money by subsidiary in the garb of share application money or by providing the fund by the assessee in the garb of share application money. The delay was due to obtaining necessary approval from the securities and Exchange Commission, Phillipines. Finally, the shares were issued as per the share certificate dated 25.05.2008 which has been produced by the assessee as additional evidence. Since the document of issuance of equity shares in the name of the assessee by the subsidiary/AE vide share certificate were not before the authorities below, therefore, to the extent of limited purpose of considering the said document, we set aside this issue to the record of AO/TPO to consider the same.
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