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TMI Blog2021 (4) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... % arrived by the TPO. The TPO in the cited case also arrived at 2% by taking the credit rating of the tax payer just like this case. Thus we direct the AO/TPO to make TP adjustment in respect of corporate guarantee at 0.50% for the assessment years under consideration. It is ordered accordingly. - ITA No.1574/Bang/2019, ITA No.1575/Bang/2019, ITA No.1576/Bang/2019 - - - Dated:- 12-4-2021 - Shri George George K, JM Shri B.R.Baskaran, AM Appellant by : Smt.Suman Lunkar, CA Respondent by : Ms.Neera Malhotra, CIT-DR O R D E R Per George George K, JM : These appeals at the instance of the assessee are directed against three orders of the CIT(A). Two orders of CIT(A) are dated 03.04.2019 and one is dated 06.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the ALP analysis undertaken by the assessee and proposed an aggregate transfer pricing adjustment of Rs.51,53,000, 53,80,000 and 59,95,000 being as 2% on corporate guarantee given by the assessee for the loan taken by the AE for A.Y s 2012-2013 to 2014-2015. The TPO had imputed the guarantee fee of 2% by adopting the commission charged by bank to similar entities (by taking credit rating of the tax payer). 6. Aggrieved by the orders passed by AO/TPO for A.Y s 2012- 2013 to 2014-2015, , the assessee preferred appeals to the first appellate authority. The CIT(A) confirmed the view taken by the AO/TPO. The relevant finding of the CIT(A) reads as follow:- 11. In this context, it may be noted that undisputed facts show the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1165 of 2013 judgment dated 08.05.2015). 8. The learned Departmental Representative, on the other hand, relied on two orders of the Hyderabad Bench of the Tribunal in the case of (i) Infotech Enterprises Ltd. v. Addl.CIT (2014) 41 taxmann.com 364 (Hyd.Trib.) and (ii) Prolific Corporation Ltd. v. DCIT(2015) 55 taxmann.com 225 (Hyd.Trib.). The learned DR submitted that the orders of the Hyderabad Bench of the Tribunal is essentially on the question whether the corporate guarantee given to the bank on behalf of the AE, whether it is an international transaction or not. In this context the Hyderabad Bench of the Tribunal had decided that the corporate guarantee on behalf of an AE is an international transaction. The learned DR submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 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. However, we notice 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 AR 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.AR did not highlight the parity of facts between the assessee and the case of Asian Paints Ltd. Hence, on the conspectus of the matter, we are of the view that the T.P. adjustment in respect of Corporate Guarantee may be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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