assessment year-wise, respectively
regarding its corporate guarantee(s).
4. Learned counsel vehemently contended during the
course of hearing that the authorities below have erred ... money. He sought to buttress the
point that such a corporate guarantee is purely a shareholder
activity not forming any international transaction
charged on the
optionally convertible loan granted to the AEs.
(ii) Corporate guarantee charges: Rs 4,19,22,177
17. The next ... million; Period: 365 days). So
far as these corporate guarantees are concerned, the assessee charged guarantee
commission @ 1% from the respective AEs. The assessee also
guarantee is not in the nature of bank guarantee, the rate
applicable to bank guarantee provided by the bank cannot be
applied to corporate guarantee ... guarantee given is a shareholder corporate guarantee as
opposed to commercial bank guarantee.
6. a) Determining the guarantee fee on the entire amount
of loan
thus, adopted 12% as ALP and accordingly made the adjustment.
CORPORATE GUARANTEE :
6. The TPO noted that the assessee did not file any submission
regarding ... assessee, vide letter dated 09.01.2013, furnished particulars of
corporate guarantee given by it in 2006 i.e., from February to December,
2006. The TPO noticed
Officer, it was noticed that the assessee company has extended
a corporate guarantee in respect of loan of Rs 101.48 crores taken by its
subsidiary ... perused. These are
dealt with issue-wise as below:
7.6.1 Providing Corporate Guarantee is not a service: The issue has been dealt
with in detail
made the adjustment on
account of commission in respect of corporate guarantee
provided by the appellant to its AE. Applicant submitted ... ACIT Vs. Dishman Pharmaceuticals & Chemicals Ltd. & Others
8
that corporate guarantee does not come under the
purview of TP adjustments. Appellant relied upon
guarantee provided by the assessee cannot be equated to bank guarantee
and resultantly the commission rate for bank guarantee cannot be applied to
the corporate ... guarantee is not
in the nature of bank guarantee, the rate applicable to bank guarantee provided by
the bank cannot be applied to corporate guarantee
made for three items; one for
reimbursement of expenses, second for corporate guarantee and third was on IT
enabled services ... reimbursement of expenses. With regard to the
adjustment done for corporate guarantee, ld AR submitted that corporate guarantee
was not an international transaction and sought
erred in
law and on facts in considering the corporate guarantee provided by the appellant along with
its co-guarantor to Essar Oilfield Services Limited ... following:
(a) Rs.10,39,44,092/- for providing corporate guarantee of Rs1,320 crores along with Essar
Shipping & Logistics Ltd., Cyprus to Essar
corporate guarantee as under:
Name of the AE Corporate Percentage ALP of the corporate Percentage Adjustment
guarantee guarantee commission
commission
charged ... corporate guarantee cannot be
compared with bank guarantee. Further, the guarantee rates charged to
the assessee cannot be the same as the guarantee rate chargeable
