issuance of Letter of Comfort.
The ld. CIT(A) after appreciating the contention of assessee concluded that
issuance of Letter of Comfort does not constitute ... difference between corporate guarantee and Letter of Comfort. In a
Letter of Comfort, the party issues only a letter that a subsidiary or group
company
stated to have
arisen on the basis of 'Letter of Guarantee/Letter of
Comfort', while respondent No.1 is not a party ... such
'Letter of Guarantee/Letter of Comfort'.
14. It is stated that the dispute as framed by the
petitioner would make
that no adjustment as
regards providing of Corporate guarantee/Letter of Comfort (LOC) and Stand
By Letter Of Credit (SBLC) to the foreign banks ... Elsamex SA, the
guarantee charges (ranging between 1.25% to 2.60% depending upon the
nature of guarantee/letter of comfort/SBLC) of the banks that
difference between
corporate guarantee and Letter of Comfort. In a Letter of Comfort, the party
issues only a letter that a subsidiary or group company ... issuing Letter of Comfort to the lender of its AE and
therefore, the issuance of Letter of Comfort is an international transaction as
held
corporate guarantee
does not include letter of comfort, implicit corporate guarantee, performance
guarantee or any other guarantee of similar nature:"
41. Further ... issuing Letter of Comfort to the Bankers of AE, the assessee did not incurred
any cost. The issuance of Letter of Comfort by assessee have
determined the Arm's Length Guarantee
Margin (ALGM) as 0.75% for guarantee commission for letter of comfort and 1.5%
guarantee commission on issuance ... comfort
guarantee and financial guarantee. The ld. TPO also proposed an additional adjustment of
Rs.2,40,52,088/- for issuance of letter of comfort
determined the Arm's Length Guarantee
Margin (ALGM) as 0.75% for guarantee commission for letter of comfort and 1.5%
guarantee commission on issuance ... comfort
guarantee and financial guarantee. The ld. TPO also proposed an additional adjustment of
Rs.2,40,52,088/- for issuance of letter of comfort
determined the Arm's Length Guarantee
Margin (ALGM) as 0.75% for guarantee commission for letter of comfort and 1.5%
guarantee commission on issuance ... comfort
guarantee and financial guarantee. The ld. TPO also proposed an additional adjustment of
Rs.2,40,52,088/- for issuance of letter of comfort
nature of letter of comfort
given in favour of M/s Ramky Cleantech Services Pvt
Ltd, while arguing that the letter of comfort is
functionally ... guarantee based on the guarantee provided by the
tax payer. Therefore, it amounts to giving bank
guarantee even though worded as a letter of comfort
letter of comfort. In course of proceedings
before the Transfer Pricing Officer(TPO), he found that the assessee had issued non contractual
letters of comfort ... such letter of comfort / support towards the loan
availed by the AE. He submitted, as per the terms of the letter of comfort / support, assessee
