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2018 (9) TMI 1545 - AT - Income TaxTPA - guarantee commission benchmarking - assessee-company provided corporate guarantee on behalf of its associated enterprise - Held that:- Looking to the fact that the Tribunal in various cases has accepted guarantee commission chargeable between 0.5% to 1%, we hold that guarantee commission of 1% should be chargeable. Here in this case, assessee itself has agreed to charge guarantee commission @ 0.38%% of the outstanding guaranteed amount, accordingly, we also hold that a guarantee commission should be benchmark by taking the rate of 1% of the outstanding guaranteed amount in line with the consistent views taken by the coordinate Benches, from its AE and adjustments should be made accordingly. Thus, this ground raised by the Revenue is treated as partly allowed. Loss on embezzlement by the employee and the employment of the employee - Held that:- Hon’ble Supreme Court has considered the matter and laid down the law in this regard in two decisions in BadridasDaga vs CIT [1958 (4) TMI 2 - SUPREME COURT] and Associated Banking Corporation of India Ltd, v. CIT [1964 (10) TMI 7 - SUPREME COURT] wherein it was held that the loss resulting from embezzlement by an employee or agent of a business is admissible as a deduction under section 10(1) of the 1922 Act [corresponding to section 28 of the 1961 Act], if it arises out of the carrying on of the business and is incidental to it, and loss must be deemed to have arisen only when the employer comes to know about it and realizes that the amounts embezzled cannot be recovered. Since the loss caused by the embezzlement by the employee and the employment of the employee is incidental to the carrying on of business, then the losses which are incidental to such employment are also incidental to the carrying on of the business. The loss caused by embezzlement by the employee was incidental to the employment and entrustment of duty and should be allowed in computing the business income of the year under consideration, that being so we decline to interfere in the order passed by CIT(A), his order on this issue is hereby upheld and grounds of appeal raised by the revenue is dismissed.
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