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TMI Blog2018 (9) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ear ("A.Y.") 2007-08. The First Appeal, namely, ITA No. 7033/Mum/2012 was filed by the assessee, whereas, the Second Appeal, namely, ITA No. 7142/Mum/2012 was filed by the Deputy Commissioner of Income Tax. By the impugned order, the appeal filed by the Revenue was dismissed and the appeal filed by the assessee was partly allowed. 2. According to Mr. Pinto, the learned counsel appearing on behalf of the Revenue, the impugned order gives rise to the following questions of law which read thus: (1) "Whether in law and on the facts of the instant case, was the Tribunal justified in directing the AO/TPO to adopt 0.5% as the ALP of the guarantee commission charges provided by the Respondent Co.; without appreciating that the TPO had determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the Tribunal right in ignoring the decision of the Karnataka High Court in CIT Vs. Himatasingike Seide Ltd. (286 ITR 255, on the issue of set off losses; that was upheld by the Apex Court in CA 1501 of 2008?". 3. As far as question No.1 is concerned, namely, whether the Tribunal was justified in directing the AO/TPO to adopt 0.5% as the Arms' Length Price ("ALP") of the guarantee commission charges provided by the Respondent Co., we find that this question is squarely covered by a decision of this Court in The Commissioner of Income Tax, Mumbai Vs M/s Everest Kento Cylinders Ltd. decided on 8th May, 2015, and reported in (2015) 378 ITR 57 (Bom.). In this decision, question No.3 was, whether the ITAT Bombay was right in deleting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4,47,649/- was not conceded in the return but was adhoc acceptance during the course of assessment, the assessee could not be bound by it. The Tribunal as the second fact finding authority had gone into factual aspects in great detail and therefore having interpreted the law as it stood on the relevant date the order passed cannot be faulted. In the matter of guarantee commission, the adjustment made by the TPO were based on instances restricted to the commercial banks providing guarantees and did not contemplate the issue of a Corporate Guarantee. No doubt these are contracts of guarantee, however, when they are Commercial banks that issue bank guarantees which are treated as the blood of commerce being easily encashable in the event of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire us to admit an appeal filed by the Revenue on this question. 5. As far as question Nos. 3,4,5 and 6 are concerned, Mr Pinto, learned counsel appearing on behalf of the Revenue very fairly stated before us that these questions are covered by a recent decision of the Supreme Court in the case of Commissioner of Income-Tax and Another Vs Yokogawa India Ltd. reported in (2017) 391 ITR 274 (SC). This being the position, we find that even question Nos.3,4,5 and 6 do not give rise to any substantial question of law that would require us to admit the present appeal. 6. This now only leaves us with question No.2. As far as question No.2 is concerned, we find from the impugned order that the same has not been answered in favour of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obal Logistics Ltd. (ITA No. 4909 and 4910/ M/2012) dated 11 June 2014 (Mumbai Tribunal) . PMP Auto Components P. Ltd. (ITA No. 1484/Mum/2014) dated 22 August 2014. 4.4 On the other hand, the Ld. DR has relied upon the orders of authorities below and submitted that the TPO has specifically pointed out that the money given by the assessee was enjoyed and used by the subsidiary without issuing the shares for about more than two years, therefore, so long the money was lying with the AE without issuing the shares, the same will be deemed as loan. 4.5 We have considered the rival submissions as well as relevant material on record. Though there was a delay in issuing the shares against the share application money given by the assessee to its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office by permanent establishment in India as a deduction. Further, the payment of interest also directly violates the conditions imposed by RBI in its letter dated 3/11/1998. Therefore, the order of the Assessing Officer was upheld. 7. However, the Tribunal allowed the respondent - assessee's appeal. During the course of the proceedings before the Tribunal the revenue contended that the borrowings on which the interest has been claimed as a deduction are in fact capital of the assessee and brought only under the nomenclature of loan for tax consideration. It was the case of the appellant-revenue before the Tribunal that debt capital is required to be re-characterized as equity capital. However, the Tribunal held that in India as the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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