TMI Blog2018 (5) TMI 1816X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT, MUMBAI] in support of its contention that the CUP method should be used for determination of arm’s length price and that such exercise would result in determination of ALP at 0.20%, we do not apply the same, as factually they are variations in facts. The credit rating of an organisation etc. plays an important role in determination of the rate. Geographical location, local government regulations etc. are also to be considered. In this case, corporate guarantee has been provided by the assessee to ABN AMRO Bank for AE BAMPL Mauritius and Strategic Food International Co. LLC, Dubai. Royal Bank of Scotland has given a free quote of 0.25%. This quote constitutes the ALP of this International Transaction in question. The average adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ALP of 3%. The DRP in its order dated 13.12.2016 considered the submissions of the assessee and directed the TPO to adopt interbank lending rate as a benchmark for determination of ALP. The DRP considered it reasonable to impute a percentage of 150 bps as the interbank lending rate varied between 150 and 2bps, as found by the TPO. It also took into account the factor that BAMPL had low credit rating. It directed the TPO to substitute 150 bps i.e. 1.5% in place of 3%. Aggrieved the assessee is in appeal on the following grounds. 1. For that on the facts and in the circumstances of the case and in law, the TPO as well as the Hon'ble DRP failed to appreciate that the issuance of corporate guarantees did not have any bearing on profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds, the manner methodology adopted by the Hon'ble DRP to ascertain the fees for corporate guarantee at 150 bps was unjustified, flawed incorrect and therefore the upward adjustment of ₹ 2,27,19,431/- is liable to be deleted and/or reduced. 5. For that on the facts and in the circumstances of the case and in law and without prejudice to the preceding grounds, the CG Commission quote of 0.20% obtained by the appellant from banking institution was a good parameter to benchmark the corporate guarantee commission of 0.20% charged from the AE and in that view of the matter the upward adjustment of ₹ 2,27,19,431/- made on account of corporate guarantee commission may kindly be deleted in full and/or reduced. 3. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise would result in determination of ALP at 0.20%, we do not apply the same, as factually they are variations in facts. The credit rating of an organisation etc. plays an important role in determination of the rate. Geographical location, local government regulations etc. are also to be considered. 5. In this case, corporate guarantee has been provided by the assessee to ABN AMRO Bank for AE BAMPL Mauritius and Strategic Food International Co. LLC, Dubai. 6. Royal Bank of Scotland has given a free quote of 0.25%. In our view, this quote constitutes the ALP of this International Transaction in question. The average adopted by the assessee as ALP is in our view not the right approach as averages do not always give logical results. As t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
