TMI Blog2019 (5) TMI 1942X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples. There should not be any dispute that the provision of Corporate guarantee to its subsidiary in order to enable it to avail loans would bring benefit to the subsidiary, in which case, it is proper to compensate the assessee for those benefits under Arms length principles. We notice that the TPO has made an adjustment of 2%, considering the interest benefit @ 4% and taking the view that half of the same should be attributed to the benefit of the assessee. Hon'ble Bombay High Court has approved the T.P adjustment of 0.50% in respect of Corporate guarantee given in the case of Everest Kento Cylinders Ltd [ 2015 (5) TMI 395 - BOMBAY HIGH COURT] . Though the Ld A.R has pleaded for an adjustment of 0.20% by placing reliance on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yielded exempt income should be considered. Accordingly we direct the AO to compute the disallowance u/r 8D(2)(iii) accordingly. - ITA No.236/Bang/2015, ITA Nos.163, 164, 165/Bang/2016, ITA No.388/Bang/2016 - - - Dated:- 2-5-2019 - SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER Assessee by : Shri Padamchand Khincha, C.V Revenue by : Shri K.V Arvind, Sr. Standing Counsel,Shri Dilip, Jr. Standing Counsel ORDER PER BENCH:- All these appeals filed by the assessee relate to assessment years 2008-09 to 2012-13. All these appeals are directed against the assessment order passed by the AO in pursuance of directions given by Ld Dispute Resolution Panel (DRP). Since common issues are urg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the loans obtained by it. Accordingly he submitted that the Corporate guarantee given by the assessee to its subsidiary company has not really impacted the interest rate, as presumed by the TPO. He submitted that the assessee, being main shareholder in the subsidiary company, has provided Corporate Guarantee as a shareholder and on commercial considerations. Accordingly he submitted that there is no requirement of making any T.P adjustment in respect of Corporate Guarantee provided by the assessee. 6. On the other hand, the Ld D.R submitted that the provision of Corporate Guarantee is an international Transaction and hence T.P adjustment was rightly made by the TPO/AO. 7. In the rejoinder, the Ld A.R submitted that the Mumbai be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce that the Hon'ble Bombay High Court has approved the T.P adjustment of 0.50% in respect of Corporate guarantee given in the case of Everest Kento Cylinders Ltd (supra). Though the Ld A.R has pleaded for an adjustment of 0.20% by placing reliance on the decision of Asian Paints Ltd (supra), yet we notice that the Ld A.R did not highlight the parity of facts between the assessee and the case of Asian Paints Ltd. Hence, on a conspectus of the matter, we are of the view that the T.P adjustment in respect of Corporate Guarantee may be made @ 0.50% as per other decisions of Tribunal and Hon'ble Bombay High Court referred above. Accordingly we set aside the order passed by the AO on this issue and direct the AO/TPO to make T.P adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of investments and accordingly apply the provisions of Rule 8D(2)(ii) by duly following the decision rendered by Hon'ble Bombay High Court in the case of HDFC Bank Ltd (supra). 12. In respect of disallowance to be made u/r 8D(2)(iii) out of administrative expenses, the Special bench of Tribunal has held in the case of Vireet Investments Ltd (supra) that only those investments, which have yielded exempt income should be considered. Accordingly we direct the AO to compute the disallowance u/r 8D(2)(iii) accordingly. 13. The assessee has raised many legal issues. The Ld A.R submitted that those legal issues may be kept open, if the assessee gets substantial relief on issues urged on merits. We notice that the ground relating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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