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TMI Blog2025 (2) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... nd if the answer to the above be in the affirmative the consequential transfer pricing adjustments that may be warranted.
In our considered opinion, therefore, the end of justice would merit that the matter being remanded to the AO with the clarification that the remit shall be confined to examining whether the undertaking of the obligation in question amounts to an international transaction, to be answered first and at the outset. X X X X Extracts X X X X X X X X Extracts X X X X ..... l is stated to have constituted a Special Bench to determine whether a corporate guarantee would constitute an international transaction. That reference came to be disposed of by the Special Bench on 23 August 2017 in the following terms: "The Ld. AR submitted at the outset that the question proposed for consideration and decision before this special bench does not arise in the present appeal. He submitted that the assessee only gave an undertaking and not a corporate guarantee for the Bonds issued by its Associated Enterprise. To fortify the point, he referred to certain clauses of the Agreement. This was opposed by the Ld. DR. We have extensively heard both the sides. In our opinion, the assessee only incurred an obligation by giving an undertaking, which is short of guarantee. As such, the question before the special bench - as to whether the giving of corporate guarantee is an international transaction? - does not arise in the instant appeal. This reference is accordingly returned to be placed before the Hon'ble President for taking an appropriate decision in this regard." 6. It was pursuant to the aforesaid order that the matter came to be placed before the regular B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate guarantee for the bonds issued by its associated enterprises. The assessee supported this fact by referring to certain clauses of the agreement. The special bench as per its order dated 23/8/2017 has held that after hearing extensively to both the parties, in their opinion, assessee only incurred an obligation by giving an undertaking which is short of guarantee. As such the question before the special bench as to whether the giving of corporate guarantee is an international transaction does not arise in the instant appeal. Therefore the special bench returned the finding to be placed before the President of the ITAT. He therefore submitted that when the special bench says that the assessee only incurred an obligation by giving an undertaking which is short of guarantee but not a guarantee the learned assessing officer should have accepted it and could not have proceeded to make the adjustment. He further referred to the order of the President ITAT dated 24/8/2017 wherein after taking the order of the special bench into account it was stated that the undertaking given by the assessee was not the corporate guarantee and when there is no corporate guarantee provided in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the matter being remanded to the TPO. According to Mr. Jolly, the nature of the international transaction having already been ruled upon, there was no occasion for the matter being remitted and it was thus incumbent upon the Tribunal itself to examine the issue. 10. Mr. Rai, learned counsel appearing for the respondents, however, draws our attention to the conclusions which were ultimately rendered by the Special Bench and which had held that while the transaction did not answer the attributes of a corporate guarantee, it was liable to be viewed as the incurring of an obligation by giving an undertaking. Whether the incurring of an obligation by giving an undertaking would amount to an international transaction, as envisaged under Section 92B of the Act, according to Mr. Rai, is an issue which would necessarily have to be examined and evaluated by the TPO. 11. However, and as we view Para 63 of the order of the Tribunal, we find that the same does not render any clarity on this aspect. A bare reading of Para 63 indicates that the Tribunal's terms of remit are couched in extremely broad terms and evidently fail to clarify that the solitary question which remained for considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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