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TMI Blog2025 (1) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... d in directing to restrict the charging of commission for corporate guarantee at 0.5%, relying on the decision of Hon'ble ITAT in the case of Everest Kanto, without discussing & appreciating the facts brought on record by TPO?" (b) "Whether on the facts and circumstances of the case and in Law, the Hon'ble ITAT was correct in allowing interest expenditure/s 36(1)(iii) of the I T Act, 1961 relying on the decision of the Hon'ble Apex Court in S.A. Builders Vs. CIT, Without appreciating the fact that commercial expediency in advancing interest free loans to sister concern will depend on ultimate utilization of expenditure and hence cannot be used too widely to inhibit effective interpretation?" 3. In so far as question (b) is concerned, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is called for, with which we are not convinced as had that been the position, there would have been no requirement to provide the said guarantee. The assessee considering the same to be a benefit to its AE, had proposed to charge guarantee fees of 0.5%. Hon'ble Bombay High Court in CIT Vs. Everest Kento Cylinders Ltd. (supra) has affirmed guarantee adjustment of 0.50% as upheld by the Tribunal. In various other judicial pronouncements, CG has been benchmarked in the range of 0.20% to 0.50%. Therefore, keeping in mind the overall facts and circumstances of the case, we restrict TP adjustment against bank guarantee to 0.50% on CG given by the assesee. Further, we are of the considered opinion that CG stood in force at all time and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There can be no absolute proposition that the range of corporate guaranteed fees or determining the arm's length price should follow a particular range or formula. 8. The observations in paragraphs 7 and 8 of Sap Labs India (P.) Ltd. (supra) are relevant and are transcribed below for the convenience of reference. "7. Therefore, while determining the arm's length price, the Tribunal has to follow the guidelines stipulated under Chapter X of the IT Act, namely, Sections 92, 92A to 92CA, 92D, 92E and 92F of the Act and Rules 10A to 10E of the Rules. Any determination of the arm's length price under Chapter X dehors the relevant provisions of the guidelines referred to hereinabove, can be considered as perverse, and it may be considered as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed while determining the arm's length price. Therefore, we are of the opinion that the absolute proposition of law laid down by the Karnataka High Court in the case of Softbrands India (P) ltd. (supra) that in the matter of transfer pricing, determination of the arm's length price by the Tribunal shall be final and cannot be subject matter of scrutiny and the High Court is precluded from examining the correctness of the determination of the arm's length price by the Tribunal in an appeal under Section 260A of the IT Act on the ground that it cannot be said to be raising a substantial question of law cannot be accepted. As observed hereinabove, within the parameters of Section 260A of the IT Act in an appeal challenging the determination ..... X X X X Extracts X X X X X X X X Extracts X X X X
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