Tonnage Tax Scheme Prevails: Transfer Pricing Adjustments Overridden for Shipping Company's Transactions and Tax Refund Income

ITAT ruled on multiple transfer pricing and tax issues for an Indian shipping company. The tribunal held that tonnage tax scheme provisions override standard transfer pricing methods for qualifying ships, rejecting TP adjustments on loan interest and ship-related transactions. Corporate guarantee commission was remanded to TPO/AO for arm's length price determination using prescribed methods. Regarding interest income from income tax refund, the tribunal classified it under 'Income from other sources' rather than business income, citing Section 244A. The decision followed precedent from earlier cases, providing relief to the assessee on transfer pricing adjustments related to qualifying ships and maintaining the standard treatment of tax refund interest. .....

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