TMI Blog2016 (5) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... n the probable rate being charged by the commercial banks is not justified. In this view of the matter, we are unable to approve 3% rate of guarantee commission fee determined as arm's length rate by the income-tax authorities. In the alternative, the addition that is required to be sustained is the position canvassed by the assessee before the Transfer Pricing Officer i.e. adoption of 0.50% as arm's length rate for the purpose of determining the arm’s length income on account of guarantee commission fee in the present case. Considering the entirety of facts and circumstances of the case and on the basis of the material available on record, we, therefore, proceed to uphold the rate of 0.50% for the purpose of determining the arm's length rate of the guarantee commission fee. Depreciation on data cable and other computer peripherals - @15% OR 60% as per assessee - Held that:- It was a common point between the parties that similar issue has been decided against the assessee for assessment year 2007-08 ) by following earlier decision of the Tribunal for assessment year 2006-07. Depreciation @ 15% confirmed - Decided against assessee - ITA No. 859/MUM/2014, ITA No. 768/MUM/2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hpur property'. The Appellant submits that since such expenses are of capital in nature and the depreciation claim should be allowed as deductions in computing the total income. Revenue s Grounds of Appeal:- 1. Whether on the facts and circumstances of the case whether the CIT(A) is right in allowing depreciation on printers scanners at the rate of 60% instead of 15% relying upon the decision of Hon'ble Kolkata ITAT in Samiran Majumdar {280 ITR (AT) 74 (Kolkata)]. 2. Whether on the facts and circumstances of the case whether the CIT(A) is right in allowing depreciation on Switches Routers at the rate of 60% instead of 15% relying upon the decision of Hon'ble ITAT, Special Bench, Mumbai in the case of Datacraft India Ltd. [ITA No. 7462 754/Mum/2007]. . 2. Before we proceed to adjudicate the respective Grounds of appeal, the background of the case is that the assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter-alia, engaged in the business of tour operator, travel agent, authorized dealer in foreign exchange, global service card and call centre. The Assessing Officer finalized an assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come accordingly in terms of section 92CA(4) of the Act. The CIT(Appeals) has also affirmed the aforesaid action and accordingly assessee is in further appeal before us. 3.1 It is noted that before the lower authorities, assessee had resisted the aforesaid action on various grounds. Firstly, the stand of the assessee was that providing of a corporate guarantee on behalf of the associated enterprise is not an international transaction within the meaning of section 92B of the Act. Secondly, the claim made was that the corporate guarantee was given on behalf of a step-down subsidiary and, therefore, it was a strategic requirement of business and was a shareholder activity. Thirdly, it was pointed out that the providing of corporate guarantee has not resulted to in any interest savings for the associated enterprise and that assessee had also not incurred any cost in respect of such corporate guarantee. Apart therefrom, assessee also opposed the adoption of 3% rate as a measure to determine arm's length rate and instead contended that a rate of 0.50% was quite justified. 4. Before us, the assessee has primarily argued that the rate of 3% adopted by the income-tax authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise to avail banking facilities from HSBC Bank in Mauritius. The Hon'ble Bombay High Court in the case of Everest Kento Cylinders Ltd.(supra) was considering a somewhat similar situation, where in the matter of guarantee commission fee the adjustment made by the income-tax authorities was based on instances of commercial banks providing guarantees. The Hon'ble Bombay High Court has explained that instances of commercial banks providing guarantees could not be compared to instances of issuance of corporate guarantee. As per Hon'ble Bombay High Court, when commercial banks issue bank guarantees, the same is quite distinct in character, than the situation where a corporate issues guarantee to the effect that, if a subsidiary associated enterprise does not repay a loan, the same would be made good by such corporate. Keeping the said ratio of the Hon'ble Bombay High Court in mind, it is quite clear that the manner in which the Transfer Pricing Officer has proceeded to determine the arm's length rate based on the probable rate being charged by the commercial banks is not justified. In this view of the matter, we are unable to approve 3% rate of guarantee commission fe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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