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TMI Blog2025 (2) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... mission / fees to the period of actual guarantee given by the assessee. TDS u/s 192 - assessee has failed to deduct TDS on salaries and wages paid to employees - as argued assessee is required to deduct TDS on estimated income of the employee and in case, the estimated income of the employee, including income from salary is less than the taxable income, then there is no requirement of deducting TDS - HELD THAT:- Since the assessee claims that in many of the employees' cases, the income does not exceed the taxable net, the assessee has not deducted TDS. AO and the DRP completely erred in disallowance of 30% of salary expenses u/s 40(a)(ia) of the Act without verifying the evidence filed by the assessee. Since the assessee has filed various evidences to justify its case and the DRP has not considered additional evidence filed by the assessee and further, these evidences were not filed before the AO during the assessment proceedings, in our considered view, the matter needs to be set aside to the file of AO for further verification. Thus, we set aside the order passed by the AO on this issue and restore the issue back to the file of JAO for the limited purpose of verification of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0(a)(ia) of the Act on account of non-deduction of tax from salary paid to it's employees. 8) The Ld. TPO/DRP/A.O. has failed to appreciate that the reference made to the TPO by the A.O. is bad in law. The Ld. TPO/DRP/A.O. ought to have appreciated that the mandatory conditions to invoke the jurisdiction u/s. 92CA of the Act did not exist." 3. Ground Nos.1, 4, 5, 6 and 8 are not pressed by the learned counsel for the assessee and hence, the same are dismissed as not pressed. Ground no.2 4. The learned counsel for the assessee submitted that this issue is covered in favour of the assessee by the decision of Hyderabad Bench in assessee's own case for A.Y. 2020-21 in ITA No.913/Hyd/2024 wherein similar issue has been considered and the Tribunal after considering facts, expunged the observations of the DRP and kept open the issue to be decided in subsequent years, if need arises. 5. On the other hand, the ld.CIT-DR fairly agreed that this issue is covered in favour of the assessee by the decision of Hyderabad Bench in assessee's own case for A.Y. 2020-21 in ITA No.913/Hyd/2024. 6. We have heard both the parties, perused the material available on record and gone through the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer/TPO to benchmark the corporate guarantee fee by applying 0.53% commission on total corporate guarantee fee given by the assessee and also restrict commission to the actual period of guarantee given to it's A.E. The relevant portion of the Tribunal is as under : "19. We have heard both the sides and perused the material available on record. In the present case the assessee has given the corporate guarantee to its various AEs as mentioned in the details hereinabove. From the perusal of the details of corporate guarantee hereinabove it is abundantly clear that the guarantees were given for the period varying from 365 days to 95 days. In our considered opinion the interest of corporate guarantee or the charges of corporate guarantee is required to computed on the basis of actual period, instead of one year, as the actual periods were available in the form of chart with the Ld. AO / TPO. Therefore, we are of the considered opinion that the TPO / DRP are required to restrict the charging of the corporate guarantee charges for the actual period as against one year. In the light of the above, we issue the direction to TPO/AO to restrict the charging of the corporate gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e external commercial borrowings has been borrows. In the case of ECB loans, risk and rewards are more than the corporate guarantees. The Corporate guarantee is required to be enforced in case of failure on the part of part of borrower. In case of ECB, not only the principle borrowed, is required to pay borrowed sum beside that other action can also be taken. Moreover, the Co-ordinate Bench in the case of Reliance Industries Ltd. v. ACIT (supra) and Dabar India Limited (supra) have already adjudicated the issue and held that the interest benefit if any is required to be splitted between the guarantor and borrower. 23. No facts and figures brought to our notice as to whether the credit rating of the AE of the assessee was substantially low and at what rate the interest would have been borrowed by it or at what rate the bank would issue the corporate guarantee in its favour. In our considered opinion that the ECB rate is already determined by the TPO at 1.67%, then in our considered opinion corporate guarantee cannot be 1.67% it is to be substantially less therefore we are of the considered opinion that the view taken by the Co-ordinate Bench in the case of Hetero Labs Limited, v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice issued by the Assessing Officer, because the notices issued by the Assessing Officer was missed the attention of the assessee, but the fact remains that the assessee has filed complete details of employees, salaries paid to them and also explained why TDS has not been deducted. The DRP has admitted the additional evidence filed by the assessee and also called for the remand report from the Assessing Officer. But the Assessing Officer failed to submit the remand report to the DRP and the DRP without considering additional evidence filed by the assessee, sustained addition made by the Assessing Officer and therefore, he submitted that the addition made by the Assessing Officer should be deleted. 16. On the other hand, the ld.CIT-DR submitted that going by the facts brought on record, it shows that the additional evidence filed by the assessee are not admitted while passing the order. Therefore, the matter may be remanded back to the file of Assessing Officer/ TPO, as claimed by the learned counsel for the assessee for further verification and decide the issue in accordance with the law. 17. We have heard both the parties, perused the material on record and gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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