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2018 (12) TMI 61 - HC - Income TaxTransfer pricing - International transaction or not - money routed through the AE by the assessee for the purpose of acquisition of distributorship - Held that:- Explanation to Section 92B clarifies certain doubts. As per clause (c) of this explanation, capital financing including any type of long-term or short-term borrowings, lending or guarantee, purchase or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other debt arising in the course of business would be included within the expression “international transaction”. Revenue had heavily relied on this explanation. Having regard to the nature of entire arrangement and the different transactions, noted above, in our opinion, the said explanation would not cover the present situation. As noted, the present case is a simple one where the money was routed through the AE by the assessee for the purpose of acquisition of distributorship. This is not a case of either financing or landing or advancing of any moneys. The back to back agreements, the contents thereof and most significantly, the fact that neither at the point of payment nor at the point of refund of money, the AE retained the same for any significant period of time, in our opinion, would be crucial. This transaction did not result into diversion of income of the assessee to its AE. The Tribunal, therefore, committed no error - once we come to the conclusion that the transaction did not give rise to the international transaction, the rest of the issues would become academic. Income Tax Appeal dismissed
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