2023 (2) TMI 523 - ITAT KOLKATA

TP Adjustment - International transaction - corporate guarantee furnished by the assessee to a bank on behalf of the assessee’s step-down subsidiary - HELD THAT:- The said transaction comes under the purview of international transaction and which thus calls for the calculation of upward adjustment towards corporate guarantee fee.

Computation of corporate guarantee fee - TPO applied 2% rate and on the other hand, the assessee has given an alternate submission applying 0.25% rate. We, however, find that under similar set of facts and circumstances of the case, we have sustained the addition for corporate guarantee fee applying 0.5% rate. We draw support from the decision of coordinate Bench, Guwahati in the case of Greenply Industries Limited [2022 (7) TMI 1045 - ITAT GUWAHATI] wherein the issue has been examined at length and Arm's Length fee has been restricted @ 0.5%.

Thus we direct ld. AO to compute the corporate guarantee fee @ 0.5% of the outstanding loan at the year end as against 2% charged in the assessment proceedings. Thus, ground no. 2 raised by the assessee is partly allowed.

Disallowance u/s 14A r.w.r. 8D - suo moto disallowance offered by the assessee - HELD THAT:- As relying on H.T. Media Ltd case [2017 (8) TMI 962 - DELHI HIGH COURT] considering the fact that most of the investments held by the assessee are brought forward from preceding year and also the major portion of the investment is in the sister/group concerns of the assessee and thus, reverse the finding of ld. CIT(A) and delete the disallowance made by ld. AO and accept the suo moto disallowance offered by the assessee.

Addition of disallowance u/s 14A for the purpose of computing book profit u/s 115JB - HELD THAT:- Issue is well-settled by the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Jayshree Tea & Industries Ltd [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] wherein held that provisions of Section 115JB of the Act in the matter of computation is a complete code in itself and resort need not and cannot be made to Section 14A of the Act. Similar view was also taken by ACIT vs. Vireet Investments Pvt. Ltd [2017 (6) TMI 1124 - ITAT DELHI] as well as Hon'ble Bombay High Court in the case of CIT vs. Bengal Finance & Investments Pvt. Ltd [2015 (2) TMI 1263 - BOMBAY HIGH COURT] Respectfully following the same, common ground no. 4 raised by the assessee are allowed.

Disallowance of deduction u/s 80G - HELD THAT:- As assessee gave donation to Assam Investment Advisory Society considering it to be a donation eligible for deduction u/s 80G of the Act but till the time of completion of assessment proceedings, the donee was not in the process of getting the required eligibility certificate which the assessee is in the process to receive from the donee. Thus, considering the prayer made by the assessee, we set aside this issue to ld. AO to examine the veracity of the claim of deduction on account of donation u/s 80G of the Act and if found in order, may be allowed to the assessee in accordance with law.

Computing the tax liability and MAT credit - also claimed that the MAT has been erroneously computed @ 18.3% instead of @ 18.50% of book profit - HELD THAT:- Considering the prayer of the assessee, we direct ld. AO to recompute the tax liability and also recompute the available MAT credit and grant it in accordance with law. Thus, ground no. 9 is allowed for statistical purposes.