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2019 (4) TMI 858 - BOMBAY HIGH COURTDisallowance of notional interest under TP - Purchase of preference share of AE - Transfer Pricing adjustment u/s 92B - AO alleged that it is interest free loans to AE - TPO had re-characterised the transaction of subscription of shares into advancing of unsecured loans - HELD THAT:- We are broadly in agreement with the view of the Tribunal. The facts on record would suggest that the assessee had entered into a transaction of purchase and sale of shares of an AE. Nothing is brought on record by the Revenue to suggest that the transaction was sham. In absence of any material on record, the TPO could not have treated such transaction as a loan and charged interest thereon on notional basis. No question of law arises. Allowabilty of interest u/s. 36(1)(iii) - HELD THAT:- interest free advances to an AE - HELD THAT:- Tribunal came to the conclusion that the assessee had sufficient interest free loans out of which subject advances are made. The Tribunal referred to and relied upon the decision of this Court in the case of Commissioner of Income-tax V/s. Reliance Utilities and Power Ltd. reported in [2009 (1) TMI 4 - BOMBAY HIGH COURT] and deleted the disallowances. Addition for corporate guarantee commission by TPO - Tribunal restricted addition to 1% as against 5% by TPO - HELD THAT:- This Court in the case of CIT v. Everest Kento Cylinders Ltd. Reported in [2015 (5) TMI 395 - BOMBAY HIGH COURT] and submitted that there is a substantial difference between a bank guarantee and a corporate guarantee. He pointed out, that this Court in the said judgment has recognised that in view of inherent differences between the two lines of guarantee, rate of commission to be charged in each cases would be different. The Tribunal applied a lower percentage of commission in the present case considering that, what the assessee had provided was a corporate guarantee and not a bank guarantee. No question of law arises.
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