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TMI Blog2021 (2) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, we direct that at page No. 14 in paragraph No. 12, line No. 16 17 the sentence in additions to the commissions already charged by the assessee is corrected as in case the commission already charged by the assessee is less than 0.5% . X X X X Extracts X X X X X X X X Extracts X X X X ..... ged any guarantee commission. b) The following loans taken by the AEs are only backed by corporate guarantee of the Applicant. Name of the Borrower Name of the Bank/ FIs Guarantee Amt (Rs) Loan o/s as on 31.03.2011 Lamitube Technologies Ltd., Mauritius SBI Mauritius 22,29,75,000 16,72,31,250 Lamitube Technologies Ltd., Mauritius Axis Bank HK 53,51,40,000 53,51,40,000 Lamitube Technology (Cyprus) Ltd. DBS Singapore 55,74,37,500 53,51,40,000 In all the case, the Applicant has charged a guarantee commission of 1.5%. c) The following AEs have entered into operating lease for taking machinery/ equipment on lease. The rental payments of such lease are backed by corporate guarantee of the Applicant. In case of default by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. 9. Before the Hon'ble Tribunal, the Applicant submitted, inter alia, that in a number of decision ns, 0.5% of the guarantee amount has been held to be an arm's length commission for giving corporate guarantee. Refer: • CIT Vs. Everest Kento Cylinders Ltd. [378 ITR 57 (Bom)] • Zee Entertainment Enterprises Ltd. Vs. ACIT (81 taxmann.com 379)(Mum) Further, the assessee submitted in view of the above, the ALP of guarantee commission should be computed at 0.5% and therefore where the assessee has already charged commission in excess of 0.5%, no transfer pricing adjustment is warranted. 10. The aforesaid contention of the Applicant is recorded in para 9 of the impugned order. The Hon'ble Tribunal after accepti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on the operating lease must be computed on the basis of lease rental outstanding only, and not on the aggregate of all future lease rentals. Needless to direct that before fresh computation the TPO /AO shall grant a fair and proper hearing to the assessee. The assessee is also directed to provide the necessary details to the TPO/AO. In the result ground No. 1 of the appeal is partly allowed. " 11. The Applicant submits that direction to the TPO/AO that the transfer pricing adjustment should be computed at 0.5% of the guarantee commission "in additions to the commissions already charged by the assessee" is an inadvertent error. The Applicant submits that the direction ought to be "in case the commission already charge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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