TMI Blog2018 (6) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... affirmed by Hon’ble Bombay High Court [2015 (5) TMI 395 - BOMBAY HIGH COURT]wherein the rate of commission has been adopted @0.5%. Respectfully, following the same, we estimate the impugned additions @0.5% per annum. The Ld. AO is directed to quantity the addition and re-compute the income of the assessee in terms of our above order - decided partly in favour of assessee - ITA No. 1557/Mum/2017 - - - Dated:- 6-6-2018 - Sri Mahavir Singh And Sri Rajesh Kumar, JJ. Appellant by: Shri Anuj Kisnadwala, AR Respondent by: Shri Jayant Kumar, DR ORDER Mahavir Singh, This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-55, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-55/IT-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f import of oil from PSPL. Thus the learned CIT(A) erred in not appreciating that when the price at which imports are made is at arm's length then issuance of corporate guarantee will also be at arm's length. 1.3 Without prejudice to the above and without admitting, on facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the benchmarking rate of guarantee commission @ 1.75% p.a. when similar guarantee commission is paid by the appellant on other transactions @ 0.3%. 1.4 Without prejudice to the above and without admitting, on facts and circumstances of the case and in law, the learned CIT(A) erred in not appreciating that the calculation of guarantee commission should be for the period of util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arking the transaction It is seen that the bank guarantee rates vary generally between 2 % to 3% giving an average of about 225%. Similarly, based on assessee's internal comparable also the guarantee commission rate works out to 2 2%. As per the decision of Bombay High Court, a corporate guarantee commission rate has to be slightly lower than bank guarantee rate. Accordingly, the rate of 2.2% arrived on the basis of internal comparable and rate of 2.25% arrived on the basis of external CUP obtained from bank is further reduced by 05%. Therefore, guarantee commission is charged @ 1.75%. Aggrieved, assessee preferred the appeal before CIT(A). 4. The CIT(A) confirming the action of the AO by observing in Para 2.6 as under: - 2.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e guarantee commission which should be charged on the basis of bank guarantee rates prevailing during F.Y.201 112 as follows: and requested to consider the above for arriving at the guarantee commission to he chargeable. The above submission of the assessee cannot he considered in view of decision of predecessor CIT(A) on similar facts for the A.Y.2009-10 (dated 24.02.20I5) in para no.3 4 as the assessee's submissions were dealt by my predecessor comprehensively while deciding the appeal against the assessee. Also on similar issue for A.Y.201112, the appeal was dismissed by the undersigned. In view of the above, as the facts remain similar in this appeal also, the assessee's grounds of appeal Nos.1.1, 1.2 and 13 dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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