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2020 (4) TMI 522 - AT - Income TaxMAT Computation - surplus on sale of shares received as gift to the book profit for taxation under section 115JB - HELD THAT:- As decided in own case [2016 (4) TMI 348 - ITAT AHMEDABAD] Ld.AO has rightly added the long term capital gain from sale of shares to the book profits u/s 115JB of the Act, and accordingly this grounds of appeal is decided against the assessee. TP Adjustment - upward adjustment of interest on loan to the AE to the income of the appellant company on account of determining the Arm’s Length Price of International Transactions - HELD THAT:- Transactions under consideration is in the nature of quasi capital. Hence, there was no requirement charge an arm's length price. Keeping in mind all these factors, as also entirety of the case, we deem it fit and proper to delete the arms length price adjustment in respect of interest on loan to AE, which, according to the revenue authorities, should have charged on the loan granted to the AE’s to bring back preferential shares capital in India. Upward adjustment of guarantee fee charges - determining the arm’s length price of the international transactions - HELD THAT:- Corporate guarantee has been given for obtaining a loan from a bank which is used for redeeming assessee preference shares in the AE. BHPL has brought back moneys invested as preference shares + guarantee charges paid to the Bank. Hence, the ALP of that transaction equivalent to the guarantee commission expenses paid is not justified. BHPL not claimed guarantee charges paid as deduction against any taxable income. Chapter X –Section 92 and 92Cconstitute anti-avoidance provisions which result in determination of ALP and adding back the ALP and the price recorded in the books of accounts to the total income to levy tax. In the instant case BHPL itself has not claimed it as a deduction from any income and guarantee charges accordingly has been offered to taxation. The amount paid as guarantee charges has already suffered disallowance while filling return of income itself. Hence, again addition the same to total income results in double taxation. TP Study report rejected without a speaking order. BHPL has filed Transfer Pricing Documentation and has undertaken T P Study on the basis of Interest Saver (IS) approach. In view of the foregoing, the upward adjustments on account of bank guarantee are therefore, deleted.
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