Income Tax Appellate Tribunal - Delhi
Addi Cit Spl. Range- 6, New Delhi vs Maharashtra Seamless Ltd., New Delhi on 27 June, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'I', NEW DELHI
Before Dr. B. R. R. Kumar, Accountant Member,
Sh. Vimal Kumar, Judicial Member
ITA No. 7700/Del/2019 : Asstt. Year: 2013-14
Addl. CIT, Vs Maharashtra Seamless Ltd.,
Special Range-6, Plot No. 5, 2nd Floor, Pusa Road,
New Delhi-110002 New Delhi-110005
(APPELLANT) (RESPONDENT)
PAN No. AAACM0511B
ITA No. 7066/Del/2019 : Asstt. Year: 2013-14
Maharashtra Seamless Ltd., Vs DCIT,
Plot No. 5, 2nd Floor, Pusa Circle-16(1),
Road, New Delhi-110005 New Delhi-110002
(APPELLANT) (RESPONDENT)
PAN No. AAACM0511B
Assessee by : Sh. Ved Jain, Adv. &
Ms. Supriya Mehta, AR
Revenue by : Sh. Prakshit Singh, Sr. DR
Date of Hearing: 25.06.2024 Date of Pronouncement: 27.06.2024
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by the Revenue and the assessee against the orders of ld. CIT (A)-44 dated 28.06.2019.
2. At the o utset, both the parties fairly submitted that the issue s involve d in the grounds of appeal are similar to the issue s taken up by the assessee in the earlier As sessment Year 2012-13 whic h stands adjudicated by the order of the Tribunal in ITA No. 7065/Del/2019 for A.Y. 2012-13 vide order dated 2 ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
27.02.2024. For the sake ready refere nce, the order of the Tribunal is reproduced as under :
"3. The brief facts of the case are that the assessee is a company engaged in the business of manufacturing of Seamless, ERW Pipes and Tubes, and trading of Pipes and Tubes. The assessee has filed its return of income in original on 28.09.2012. During the year under consideration, the assessee has advanced loan to Jindal Pipes (Singapore) Pte. Ltd (JPSPL) of around US$ 33,64,847.52, equivalent to Rs. 16,99,24,281/-. The assessee has charged interest of Rs. 19,88,755/- on such advances at the rate of 1 months LIBOR plus 300 basis points which is 3.23% p.a. approx and the same was declared in the return of income filed by the assessee.
4. The above International transaction of interest received of Rs. 19,88,755/-was benchmarked by the assessee adopting CUP method, being the appropriate method. The assessee has considered JPSPL, its Associated Enterprise as the internal comparable because JPSPL (AE) has also taken the loan from Citibank N.A. Singapore for the tenure of 3 months at the rate of 6 months LIBOR + 225 basis points i.e. 2.937% p.a. approx. and the assessee has charged the higher rate of interest from JPSPL, AE, being 1 month LIBOR + 300 basis points i.e. 3.23% p.a. approx., thus the transaction of the assessee is at arm's length.
5. During the course of Transfer Pricing proceeding, the assessee submitted the rate charged by assessee to JPSPL is 1 month LIBOR + 300 basis points which comes out to be 3.23% p.a. approx. is already more than the rate of interest charged by Citibank, Singapore, and the transaction is considered at arm's length.
6. The TPO rejected the comparable provided by assessee citing following reasons:
• The loan granted by Citibank, Singapore is just for a period of 3 months. • There involves a guarantee in the agreement between JPSPL and Citibank, Singapore where assessee stands as a guarantor.
• The two agreements pertains to different financial year and hence they are not comparable ignoring the fact that assessee has given loan in November 2011 to February 2012 and the agreement entered into between the JPSPL and Citibank, Singapore is dated April 2012.3
ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
7. The TPO has benchmarked the interest amount on the basis of Master circular on ECB and trade credits issued by RBI. While adopting the rate to be applied, the TPO has adopted 6 month Libor + 500 basis points i.e 5.687% p.a. approx. which was ceiling rate given for loans exceeding 5 years and thus, made the addition of Rs. 15,02,959/-
on the basis of interest at the rate of 5.687% p.a. as under:
Particulars Balance/Transac Amount in INR No. of Interest Interest tion days Rate (6 amount in months INR LIBOR + 500 bps) New Loan 11.11.2011 32,55,001.22 142 5.687 72,016.14 14.11.2011 15,51,39,500.00 139 5.687 33,59,909.28 22.02.2012 98,39,336.90 39 5.687 59,788.93 Total Interest 34,91,714.36 Arms' Length 34,91,714.36 Interest Less: Interest 19,88,755.00 receied Difference to be 15,02,959.36 adjusted
8. Aggrieved by the order of the AO, assessee filed the appeal before CIT(A), who directed to consider LIBOR +350 points, resulting in filing of appeal before the Tribunal.
9. Heard the arguments of both the parties and perused the material available on record.
10. With regard to the tenure of loan granted by Citibank, Singapore being for a period of 3 months, the assessee explained that one of clauses of loan agreement entered into between the assessee and JPSPL is that the loan is repayable on demand and is for meeting temporary fund requirement which is evident from the agreement.
Thus it is in essence a short term loan. On the other hand, the loan agreement between JPSPL and Citibank was for the period of 3 months which also qualifies as a short term loan. Thus when both the loans are for short term, they are aptly comparable. The assessee further submitted that the loan granted by assessee has also been repaid back to it by JPSPL in the year 2012 itself i.e. within 12 months from the date of grant.
11. With regard to the guarantee in the agreement between Citibank, Singapore and JPSPL, it was submitted that JPSPL has obtained loan from Citibank, Singapore of around USD 2,90,00,000/-. No bank would provide such a huge amount of loan without taking any security in return, the security being any asset or any guarantee. In such circumstances, JPSPL has obtained loan backed by assessee's guarantee. The TPO has not brought on record any facts or material which depicts that the interest rate charged 4 ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
by bank is impacted by the securities offered by the borrower of the loan. The assessee holds 30% shareholding of JPSPL and the guarantee has been advanced by the assessee as a matter of commercial prudence primarily to protect the business interest of the group by fulfilling the shareholder's obligation.
12. With regard to the fact that two agreements pertains to different financial year, it was submitted that both the transactions pertain to the same period in which LIBOR rates are applied i.e. in 2012. It is noticeable that agreement between JPSPL and Citibank, Singapore pertains to Year 2012 and since the tenure of loan is for a period of 3 months, the interest will be accrued in same calendar year i.e. 2012. On the other hand, with reference to loan agreement between JPSPL and the assessee, it is undisputed that one of the clause in the agreement between assessee and JPSPL reads that interest shall be charged at 1 month LIBOR + 300 basis points as on the last business day of the financial year, in which interest is being accrued. This transaction belongs to FY 2011-12 and thus the interest shall be charged at LIBOR prevalent in the year 2012. Accordingly, the ground of the TPO that the matter pertains to two different financial years is baseless as LIBOR of year 2012 only are being considered in both the cases.
13. Reliance is placed on the following judgments:
DABUR INDIA LTD. VERSUS ADDL. CIT. RANGE-10. NEW DELHI in 2021 (2) TMI 1250 - ITAT DELHI - Dated.- February 18. 2021.
COMMISSIONER OF INCOME TAX-I VERSUS M/S COTTON NATURALS (II PVT.LTD. In 2015 (3) TMI 1031 - DELHI HIGH COURT - Dated.- March 27. 2015. INSLICO LTD. VERSUS DCIT, CIRCLE 11 (11 . NEW DELHI in 2015 (12) TMI 1779
- ITAT DELHI - Dated.- December 4. 2015 M/S E4E BUSINESS SOLUTIONS INDIA PVT. LTD., VERSUS THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-3 (1) (2) BANGALORE AND VICE- VERSA in 2015 (11) TMI 1545 - ITAT BANGALORE - Dated.- November 4, 2015. GHARDA CHEMICALS LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX 9 (1). MUMBAI in 2009 (11) TMI 653 - ITAT MUMBAI - Dated.- November 30.
2009.
M/S. AG1LA SPECIALTIES PVT. LTD. NOW MERGED WITH MYLAN LABORATORIES LTD.. VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX. CIRCLE 1 (1) (1).
5ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
BANGALORE AND VICA-VERSA in 2015 (12) TMI 33 - ITAT BANGALORE Dated.- October 9. 2015.
TECNIMONT ICB P. LTD. AND ANOTHER VERSUS ADDITIONAL COMMISSIONER OF INCOME-TAX AND ANOTHER in 2013 (9) TMI 595 - ITAT MUMBAI Dated.- July
17. 2012
14. In view of the above, it is comprehensible that interest has been earned by assessee at arm's length rate and accordingly, no adjustment on account of arm's length rate is required to be carried out. Therefore the addition sustained of Rs. 5,81,986/- is hereby directed to be deleted."
3. With regard to corporate guarantees, having heard the arguments of both the parties who re lied on the respective orders of the AO and the ld. CIT(A), we find no reason to inter fere with the reaso ned order of the ld. CIT(A). (para 7 .5 to 7.8) which relied on the order of the Tr ibunal in case of DCIT Vs. Spentex Industries Ltd. (94 taxmann 419) and the judgment of Hon'ble High Cour t of Mumbai in the case o f CIT Vs. Everest Cantor Cylinder Ltd. (378 ITR 57). For the sake of ready reference, the relevant part of the ld. CIT(A) is reproduced be low:
" 7 .5 Gr ou n d s No . 7 , 8 & 9 p e rta i n t o th e c ont en t i on of t h e a p p el l an t th a t t h e A O/ T P O h a d e r r ed i n c ha rg i n g c o rp o ra t e-g ua ra nt e e a t th e r a t e o f 0 .1 2 % f r om it s A E a n d m a k in g a t r a n s f e r p ri ci n g a dj u s tm en t u si ng 1 .3 % as p e r S BI r at e o n g u a ra nt e e . Th e a pp ell a n t h a d p r ov id e d c o rp o r at e gu a r an t e e of USD 13 c ro r e s to ba n k s on b eh a l f of it s AE n a m el y Ma h a r a s h t ra S e aml e s s ( Si ng a p o r e) Pt e . Ltd . a n d D ev D ri lli n g Pt e . L t d . T h e app ell an t a rgu ed t h a t th e it s t ra n sa ct i o n w e r e a t a r m' s l en g th .
7 .6 Th e H on 'bl e D e lh i I TA T in t h e ca s e o f D C 1 T v s S p en t e x I n du st ri e s Lt d . 2 0 18 9 4 t a xm a nn . c o m 4 1 9 ( D elh i -- T rib ) d at e d 1 7. 0 5 .2 01 8 ha s h el d th a t t ran s f er pr i ci n g a dj us t m en t a r e a pp li ca b l e f r om A Y 2 0 13 - 1 4 onw ar d s 6 ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
in vi e w o f th e a m e n dm ent t o s ect i on 92 B o f th e A ct b y t he F in a n c e Ac t , 2 01 2 w h ich w a s h el d t o b e p r o sp e cti v e a n d n ot r e tr o s p e ct i v e. H en c e , t h e c ont en ti on of th e a pp e lla n t t h a t th e tr a n s a c ti on p e rt a i ni n g to c o r po r at e gu a r an t e e w as n ot a n in t e rn ati on a l t r a n sa cti on w it h in th e de fin i t i on o f th e tra ns f e r p r i ci n g r e g ul a ti on s in I n di a is n ot c o r r ec t . Mo r e o v e r, the c o rp o rat e gu a r a n t e e ha s b e en c h a rg e d b y t h e a p p ell a n t it s el f d u r i n g th e y ea r un d e r r e fe r en c e .
7 .7 I t i s s e en t ha t t h e H on 'bl e B om b a y T ri b un a l in t h e c a s e o f Ev e r e st K a nt o C yli n d er L td v er su s A CI T 2 01 5 1 13 T DR M um b a i ( TR IB) 1 08 w h i c h h a s b e en a ffi r m ed b y th e B o m ba y H ig h Co ur t in C I T v e rsu s E v er e st C a n t o r C yl i nd e r Lt d ( 20 1 5) 3 7 8 I TR 5 7 ( B OM) 1 19 T D R 0 3 9 4 ( B O M ) ha s s ta t e d a s f oll ow s: -
" Th e T ran s f er P ri c in g Of fi c e r in h i s o r d e r d a t e d 28 / 10 / 2 0 1 0 , ob s e rv ed th a t du r i ng t h e fin a n ci a l y ea r 2 0 0 6 - 0 7 t h e a s s o c ia t e d e nt e rp ri s e h a d ta k en a l oan of R s . 8 6 .1 8 c r o r es , th a t i s US D 2 0 ,0 0 0 , 00 0 fr o m ICI CI Ba n k and on e of th e c l a u s es of t h e te r m l oa n w a s t o p r o vid e a c o rp o rat e gu a r a n t e e b y t h e a s se s s e e . I n th i s b eh a lf , t he a ss e s s e e pr o v id ed a c o rp o ra te gu a r a n t e e/ gu a ra n t e e r ep a y me n t o f b o r r ow in g s ma d e by th e a s s oc i a t ed en t e rp ri s e a t D u ba i fo r pu r ch a s e o f a s s et s an d in v en t o ri e s an d f o r w o rk i ng ca p it a l a n d a s a t e r m l o a n . T h e a ss e ss ed h ad ch a rg ed gu a ra n te e c om m i s si on at 0. 5 %. Th e , t ra n sf e r p ri c in g o ffi c e r fo u n d t ha t t h e gu a r a n t e e fe e c h a rg e d w a s a t a l o w er r a t e an d pr o c e ed ed t o c omp a r e th e gu a r a n t e e c o s t s. Th e p r ov is io n o f gu a ra n t e e w a s f oun d t o b e a n in t e rn a t i on a l t ra n s a ct io n a s d e fi n ed u n de r s ect i on 9 2 B of t h e A ct a nd w as f ou n d th a t t h e t ra n s a ct i on w ou ld h a v e a be a rin g on p ro fi t s , in c o m e, l os s e s o r a s s et s o f t h e a ss e s s e e . It w a s ob s e rv e d t ha t ov e ra ll r is k ex p osu r e o f t h e a s s e s s e e c o m pa ny b e c om e s h igh e r b y v i rt u e o f t he a mo u n t o fg ua r a n te e a n d th e c o m pa n y b e c om e s mo r e l e v e rag e d i n c l ud in g b y vi r t u e of i t s d ebt e qu it y ra t io w h i c h w ou l d u lt ima t el y e f f e c t t h e c o s t of b o rr o w in g . Th e D u b a i s ub si d ia r y w a s n ew l y f or m ed w as u n kn o w n ha d a l ow c r e di t ra t in g a n d a s su c h t h e t ra n s fer pri c in g o f fi c er c on c l ud e d th a t i f t h e gu a r a n t e e h a d n o t b e en p r o vid ed , IC I CI ban k w oul d n ot h a v e l en t a n a d v a nc ed m oni e s t o t h e a s s o ciat e d 7 ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
ent e rp ri s e . R el y i ng u pon t h e p rin cip l es o f c o m pu ti n g g ua r a nt e e f e e s in th e ca s e o f G en er a l El e c t ri c C a pit a l Ca n a d a I n c v e r s u s H e r Ma j e s ty , t h e Qu e en ( 2 00 9 ) T C C 5 63 , t h e d i ff e r en ce b et w e en th e ba n k ra t e a n d t h e pri m e l end i n g r a t e i t sh ow e d a r et u rn f o r b ea ri n g ris k f ol l o w ed b y o t h e r ba n k s d u ri ng th e r el e v a nt y ea r wits 6% w hi le th e a v e ra g e p rim e len di n g r a t e w a s 1 1.3 5 %. Th i s s h ow s th a t t h e r etu rn f o rb e a r i ng r i s k w a s a r ou n d 5 .35 % . I t w a s a l s o f ou nd i n a n ot h e r c a s e t a k en u p f o r c omp a ri s on th a t a p ub li c c o m p a n y wi t h l i mi t e d lia bil it y i n wh i ch 51 % s ta k e was h el d by D ut c h state, FMO ( N eth e rl a n d s Fi na n ci e ri ng s Maa t s ch a pp ij V o or Ont w ik k eli ng s l a n d en N V) had ch a rg ed 2.5% for fu rn i sh in g g u a ra nt e e i n t h e c a s e o f R a bo I n di a F in a n c e P ri va t e Lim it ed de spi t e t h e fa ct t h a t F MO a n d R a b o w er e n ot r el a t e d e nt it i e s. T h e tra ns f e r p ri cin g o ff i c e r c a m e t o t h e c onc lu s i o n t ha t th e b a nk s a n d c omp ani e s a r e c h a rgin g a t l ea s t 3 % f o r p r o vi din g gu a ra n t ee s a n d th e r e f o r e th e b en ch m a rk ed a rm ' s l eng t h p ri c e f o r gu a ra n t e e g iv en b y th e a ss e s s e e t o I C I C I f o r b en e fi t of th e a s s o cia t ed en t e r p ri s e a t 3 % of th e a m ou n t of gu a r a n t e e. I n th i s ma n n e r h e a r ri v e d a t a n a m ou nt of R s .3 4 ,9 9 , 0 03 a s g u a r a nt e e c om m i s s i o n a nd ma d e a n a d ju stm e nt of R s .2 8 ,5 0 , 3 53 s in c e t he a m ou nt o f R s .6 , 48 , 6 50 e q ui v a l en t t o 0 .5 % h ad a lr e a d y b e en pr o vi d ed fo r .
9. M r . Pa rd iw a l a t h en a s s a il e d th e T ra n sf e r P ri cin g O f fi c e r' s fi n di ng s by m aki n g a r ef e r e n c e t o th e o rd e r o f t h e Tr i bu n a l. H e p oi nt e d ou t i n pa ra g ra p h 1 4 ( b) t ha t t h e a ss o ci a t ed en t e rp ri se c ou l d h a v e b o r r ow ed mon e y a s p e r t h e p r e v a i l i ng ra t e in t h e a s s o ci a t e h e a d en t e r pr i s e c oun t ri e s wh i ch w e r e a r ou nd 5 .5 % p e r a nn u m a n d du ri n g th e sa i d pe ri o d t h e a s s o ci a t ed en t er p ri se ha d bo r r ow e d a t th e ra t e o f Li b o r + 0 .8 3 % fo r t e r m l o a n f o r w o rk in g c a p it a l pu rp os e . T hu s i f i t cou ld ha v e bo r r ow e d at th e sa i d ra t e, th e p r eva ili n g Li b o r ra t e s ra n g in g f r om 5 .3 % a n d e ff e ct i v e ra t e o f b o r r ow i ng w a s 6 .1 3 % f o r th e t e rm l oa n a nd 5. 8 % f or t h e w o rk i n g c a pi ta l l o a n w h i ch wa s in li n e w it h t h e no rm a l ra t e s pr e vai li ng i n t h e a s s oc ia t ed ent e rp ri s e cou n t r y. M r . Pa rd i w a l a fur t h e r s ub mi tt ed t hat t h e a s s o c ia t e d en t e rp ri se h a d o bt a in e d a l o a n f r o m i t s ba n k e r s on fi r st c h a rg e t ow a rd s th e f i x ed a s s et a nd fa rt h e r h yp ot h e cat io n o f in v ent o r y a n d b o o k d e b ts . A s s o ci a t ed en t e rp ri s e h a s a 8 ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
gr o ss fi x ed a ss et base v a lu ed at a b ou t US D 13 m ill i o n a nd had in v en t o ry val u e d a t U SD 7 .6 mi l l i on, b o ok d eb t s o f US D 5 .4 mi ll i on a n d c a sh an d ban k b a l a nc e o f U S D 1 .8 mi lli on . A p oin t ed ou t th a t a g a in st a lo a n ou t st an di ng o f US D 10 m il li on a s o f ' 3 1 / 0 3 / 20 0 7 , a ss et s a va i lab l e w er e t o t h e t un e of USD 2 7 .4 m il li on. A c c o rdin gl y , it w a s n o qu es ti on th e a s s o ciat e d en t e rp ri s e n ot b ei ng a bl e t o o b ta in a lo a n w it h out t hi s c o rp o rat e gu a r a n t e e i s su e d b y t h e a ss e s s e e.
1 0... ... ... ... ... ...... .
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In t h e mat t e r of gu a r a n t e e c o m mi s si on , th a t a dj us t m en t ma d e b y t h e tra ns f e r p ri ci n g o ffi c e r were ba s ed on i n s ta n c e s; r e s t ri c t ed to c om m er ci al ba n k s pr o vi di n g gu a ra n t e e s a nd di d n ot c on t em pl a t e t h e is su e of c o rp o r a t e gu a ra n t e e . No d ou bt t h ese are c on t ra ct s of gu ar an t e e s, h o w ev e r , w h en th e y a r e co mm e r ci a l b a nk s t h a t i s s u e b an k gu ar an t e e s wh i ch a r e t r ea t e d a s t h e b l o od o f c o m m e r c e bei n g ea s il y en ca sh a h a b l e in th e e v en t o f d e fa ul t , a n d if th e b a n k gu a r a n t e e h a d t o be o bta i n e d f r o m co mm e r ci a l b a nk s , th e h igh e r c o m mi s si on c ou ld , h a v e be en j u st i fi ed . I n t he p r e s ent c a s e , it i s a s s e s se e com p a ny t ha t i s is sui ng c o rp o ra t e g ua r a n t e e to th e e ff e ct that if th e su b s id ia r y a s s o ci at e d ent e rp ri s e d o es n ot r ep a y t h e l o a n a v a il ed of i t f ro m IC IC I, th en i n s u c h e v en t , , t h e a s s e ss e e w o ul d ma k e g o od t h e a m ou nt a n d r ep a y t h e l o an . Th e c on si d e r a ti on s w hi ch a pp li ed f o r i s su a n c e o f a c o rp o rat e gu a ra n t e e a r e d i s t in c t a n d s ep a r a t e f r o m t h a t o f t h e b an k gu ar an t e e a ri d a c c o rdi ng ly , w e a r e o f t h e vi ew th a t th e c om m i s si on c ha rg ed can n ot b e c a ll ed in qu es ti on , in t h e m a n n e r t h e t ra n sf e r- pri c in g offi ce r ha s d on e . I n ou r vi e w , t h e c om p a ris on a re n ot a s bet w e en li k e t ra n s a ct i on s bu t th e c o mp a ri s on s a r e b et w e en g ua r a nt e e s is su ed b y th e c o m me r c i a l ba n k s a s a ga i n st t h e c o rp o r a t e gu a r a n t e e is su ed b y h ol d in g c om pa n y f o r th e b e n e fi t of a s s oc i a t ed e n te rp ri s e , a s ub si d i a ry c omp a n y. I n v i ew o f th e a b o v e d i s cu ss ion w e a r e o f t h e vi e w th a t t h e a pp ea l d o e s n ot ra i s e a n y su b s t a n ti a l qu e s ti on of l a w a n d it i s di s mi ss e d. "9
ITA Nos. 7066 & 7700/Del/2019 Maharashtra Seamless Ltd.
7 .8 I n th e ca s e of E v e r e st K a nt o Cyl in d e r s Lt d . (su p ra ) th e a p p el l an t it s el f h a d b en c hm a r k ed i ts c o rp o ra t e g ua r a n t e e 0 .5 % p e r a n nu m a n d h a d pa i d b an k gu a r an t e e s of 0 .3 5 % t o 4 % du rin g th e y ea r a n d th a t th e rat e u s ed b y t h e TP O wa s th e b a n k g ua r a nt e e ra t e a nd n o t t h e c o rp o ra t e gu a r an t e e ra t e. Th us t h e H on 'b l e H ig h C ou rt ha d a c cep t ed t h e ra t e o f 0 .5 % sh ow n b y t h e a p p e l la n t . T h e Hi gh C o u r t h el d th a t t h e r e w a s a di f f e r enc e b et w e en b a nk guarantee a nd c o rp o ra t e gu a ra n t ee . Hen c e , r el yi ng u p on th e o r de r of t h e B o mb a y Hig h C o u r t i n t h e c a s e of Ev er e s t K a nt o C y li n d er s L t d . ( su p r a ) a n d on t h e ba si s o f th e fa ct s a n d t h e ci r cum s ta n c e s of- t h e c a s e, it i s h eld th a t it w oul d b e r ea s on a b l e t o ben c h m a rk c o rp o r a t e gu a ra n t e e a t th e r a t e o f 0 . 5 % in s t e a d o f 1 .3 % a s don e b y t h e A O/ T P O o r 0 .12 % m a d e by t h e a p p el l a n t . T h e A O / T P O i s di r e ct e d t o a l l ow r el ie f t o th e a p p ell a n t a c c o rdi ng ly .
4. In the result, LIBOR + 300 points be charged and corporate guaranteed commission be charged @ 0 .5%.
5. In the result, the appeal o f the Revenue is dismissed and the appeal of the assessee is partly allowed.
Order Pronounced in the Open Court on 27/06/202 4.
Sd/ - Sd/-
(Vimal Kumar) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 27/06/2024
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR