2024 (1) TMI 1407 - HC - Income Tax

TP adjustment - Corporate guarantee given by the Assessee on behalf of its Associated Enterprises - HELD THAT - Tribunal has examined the aspect and found that the average rate of corporate guarantee commission has been accepted for several decisions of the Tribunal at 0.5% and the assessee in the instant case has already charged a guarantee commission at 0.5% from the associated enterprises. As found on facts that this charge of commission compares favourably with the Bank of Singapore usually charge commission in the range of 0.15%. Therefore, it was held that the upward adjustment made on account of corporate guarantee commission cannot be sustained and, accordingly, the same was deleted. The Tribunal noted the decision of Redington (India) Ltd. 2020 (12) TMI 516 - MADRAS HIGH COURT and applied the same to the facts of the case and held in favour of the respondent/assessee. No substantial question of law

Summary

The High Court of Calcutta dismissed the appeal filed by the revenue under Section 260A of the Income Tax Act, 1961. The appeal was against the order of the Income Tax Appellate Tribunal regarding transfer pricing adjustment on corporate guarantee commission. The Tribunal's decision was upheld as it found the commission rate charged was reasonable compared to market rates. The appeal was dismissed, and no substantial question of law was found.