DCIT(CC)-8(3), MUMBAI vs. SHAPOORJI PALLONI AND COMPANY PRIVATE LIMITED, MUMBAI

ITA 1217/MUM/2025Status: DisposedITAT Mumbai23 January 2026AY 2013-1437 pages
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What did the Tribunal hold?

The Tribunal restored the issue of determining the Arm's Length Price (ALP) for financial guarantees back to the TPO/Assessing Officer, following previous decisions in the assessee's own case. For performance guarantees, the Tribunal found that the assessee had an obligation to step in and indemnify the guarantee holder in case of the AE's failure, thus distinguishing it from prior cases.

What were the facts?

The assessee company issued performance and financial guarantees to its associated enterprises. The Assessing Officer treated these as international transactions and made transfer pricing adjustments for non-recovery of guarantee commission. The CIT(A) partly allowed the assessee's appeal.

What were the issues?

Whether the issuance of performance and financial guarantees constitutes an international transaction, and if so, what is the arm's length price for the guarantee commission. Additionally, issues regarding deductibility of stamp duty expenses under Section 35DD and time-barring of assessment proceedings were raised.

Which sections of the Income-tax Act were involved?

Section 92B,Section 143(3),Section 144C(3),Section 35DD,Section 43B,Section 153

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Heard together (4 matters)

ITA No.1150/MUM/2025
ITA No.1149/MUM/2025
ITA No.1211/MUM/2025
ITA No.1217/MUM/2025

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL “H” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI JAGADISH, ACCOUNTANT MEMBER ITA No.1149/MUM/2025 (Assessment Year: 2012-2013) (Assessment Year: 2013-2014)

Shapoorji Pallonji and Company Private Limited 1st Floor, 41/44, S. P. Centre, Minoo Desai Marg, Colaba, Mumbai - 400005. Maharashtra. [PAN:AAACS6994C] Income Tax, Central Circle – (3), Mumbai)

Room No.656, 6th Floor, Aayakar Bhavan, Mumbai - 400020. Maharashtra ITA No.1217/MUM/2025 (Assessment Year: 2012-2013) (Assessment Year: 2013-2014)

Deputy Commissioner of Income Tax, Circle 3(3)(1), Mumbai Respondent (now transferred to Deputy Commissioner of Income Tax, Central Circle – (3), Mumbai)

Room No.656, 6th Floor, Aayakar Bhavan, Mumbai - 400020. Maharashtra Vs Appellant Shapoorji Pallonji and Company Private Limited 1st Floor, 41/44, S. P. Centre, Minoo Desai Marg, Colaba, Mumbai - 400005.

Maharashtra. [PAN:AAACS6994C] Appearance For the Appellant/Assessee Shri Rajan Vora, Shri Nikhil Tiwari Ms. Palak Mehta For the

The order continues below.

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