CIT v. Everest Kento Cylinders Ltd.

378 ITR 57High Court2015#258 most cited

What is CIT v. Everest Kento Cylinders Ltd. authority for?

Corporate guarantee fees are subject to transfer pricing rules, and adjustments may be needed to account for differences between corporate guarantees and more liquid bank guarantees when determining arm's length price.

304

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2016 to 2026.

Also referred to as

CIT v. Everest Kento Cylinders Ltd. · corporate guarantee · transfer pricing · section 92B · section 92CA · arm's length price · associated enterprises · benchmarking · bank guarantee · discount · 378 ITR 57

Also reported as

58 Taxmann.com 254232 Taxmann 307

Sections most often in play

Section 92BSection 143(3)Section 14ASection 115JBSection 35(2AB)Section 37(1)Section 92CASection 92CA(3)
Read the full judgment

Issues it is cited on

corporate guaranteesafe harbour rulessection 92b(1)safe harboursection 92bsection 92fcup methodassociated enterprisessection 92c(3)retrospective amendmentbenchmarking analysissection 92ca(3)

Judgments citing CIT v. Everest Kento Cylinders Ltd.

Deputy Comm. of Income Tax (It)-3(2)(2, Mumbai vs. M/S Mizuho Bank Limited, Mumbai

In the result the grounds no

ITA 2870/MUM/2022[2015-2016]Status: DisposedITAT Mumbai17 Jan 2023AY 2015-2016

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Soumendu Kumar DashFor Respondent: Mehul Talera
Section 163Section 40

…s used and risks undertaken by the assessee bank. 8. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was night in the allowing relief to the assessee based on the decision of the Bombay High Court in Everest Kento Cylinder Limited (378 ITR 57 (Bom), which clearly stated that no comparison (for transfer pricing purposes) can be made between guarantees issued by commercial banks (like the assessee) with corporate guarantee issued by a holding company for benefit of its AE (subsidiary company) and the commission to be charged in the case of bank guarantees necessarily has to be higher tha…

Deputy Comm. of Income Tax (It)-3(2)(2), Mumbai vs. M/S Mizuho Bank Limited, Mumbai

In the result the grounds no

ITA 2869/MUM/2022[2016-2017]Status: DisposedITAT Mumbai17 Jan 2023AY 2016-2017

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Soumendu Kumar DashFor Respondent: Mehul Talera
Section 163Section 40

…s used and risks undertaken by the assessee bank. 8. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was night in the allowing relief to the assessee based on the decision of the Bombay High Court in Everest Kento Cylinder Limited (378 ITR 57 (Bom), which clearly stated that no comparison (for transfer pricing purposes) can be made between guarantees issued by commercial banks (like the assessee) with corporate guarantee issued by a holding company for benefit of its AE (subsidiary company) and the commission to be charged in the case of bank guarantees necessarily has to be higher tha…

Deputy Comm. of Income Tax (It)-3(2)(2), Mumbai vs. M/S Mizuho Bank Limited, Mumbai

In the result the grounds no

ITA 2868/MUM/2022[2017-2018]Status: DisposedITAT Mumbai17 Jan 2023AY 2017-2018

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Soumendu Kumar DashFor Respondent: Mehul Talera
Section 163Section 40

…s used and risks undertaken by the assessee bank. 8. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was night in the allowing relief to the assessee based on the decision of the Bombay High Court in Everest Kento Cylinder Limited (378 ITR 57 (Bom), which clearly stated that no comparison (for transfer pricing purposes) can be made between guarantees issued by commercial banks (like the assessee) with corporate guarantee issued by a holding company for benefit of its AE (subsidiary company) and the commission to be charged in the case of bank guarantees necessarily has to be higher tha…

Deputy Commissioner of Income Tax (It)-3(2)(2), Mumbai vs. M/S Mizuho Bank Limited, Mumbai

In the result the grounds no

ITA 2867/MUM/2022[2012-2013]Status: DisposedITAT Mumbai17 Jan 2023AY 2012-2013

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Soumendu Kumar DashFor Respondent: Mehul Talera
Section 163Section 40

…s used and risks undertaken by the assessee bank. 8. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was night in the allowing relief to the assessee based on the decision of the Bombay High Court in Everest Kento Cylinder Limited (378 ITR 57 (Bom), which clearly stated that no comparison (for transfer pricing purposes) can be made between guarantees issued by commercial banks (like the assessee) with corporate guarantee issued by a holding company for benefit of its AE (subsidiary company) and the commission to be charged in the case of bank guarantees necessarily has to be higher tha…

DCIT, Chennai vs. Siva Ventures Ltd., Chennai

The appeal of the revenue stand partly allowed in terms of our above order

ITA 1417/CHNY/2016[2008-2009]Status: DisposedITAT Chennai23 Dec 2022AY 2008-2009

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am.

For Appellant: Shri B. Ramakrishnan (CA) – Ld. ARFor Respondent: Ms. Ann L.Kapthuama (CIT) –Ld. DR
Section 143(3)Section 14ASection 250(6)

…So far as the benchmarking of corporate guarantee is concerned, we find that this issue is squarely covered by the decision of Mumbai Tribunal in Everest Kanto Cylinders Ltd. vs. DCIT (34 Taxmann.com 19) as affirmed by Hon’ble Bombay High Court on 08/05/2015 (58 Taxmann.com 254) wherein this transaction was held to be an international transaction and the same was benchmarked @0.50%. Respectfully following the same, we direct Ld. AO / TPO to adopt benchmarking rate of 0.50% and recompute the adjustment. The grounds raised by the revenue stand partly allowed. 3.3 So far as the payment of advisory fees and escrow fe…

Siva Industries and Holdings Limited, Chennai vs. DCIT, Chennai

The appeal of the revenue stand partly allowed in terms of our above order

ITA 1390/CHNY/2016[2008-09]Status: DisposedITAT Chennai23 Dec 2022AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am.

For Appellant: Shri B. Ramakrishnan (CA) – Ld. ARFor Respondent: Ms. Ann L.Kapthuama (CIT) –Ld. DR
Section 143(3)Section 14ASection 250(6)

…So far as the benchmarking of corporate guarantee is concerned, we find that this issue is squarely covered by the decision of Mumbai Tribunal in Everest Kanto Cylinders Ltd. vs. DCIT (34 Taxmann.com 19) as affirmed by Hon’ble Bombay High Court on 08/05/2015 (58 Taxmann.com 254) wherein this transaction was held to be an international transaction and the same was benchmarked @0.50%. Respectfully following the same, we direct Ld. AO / TPO to adopt benchmarking rate of 0.50% and recompute the adjustment. The grounds raised by the revenue stand partly allowed. 3.3 So far as the payment of advisory fees and escrow fe…

Siva Ventures Limited, Chennai vs. ACIT, Chennai

The appeal stand partly allowed in terms of our above order

ITA 1040/CHNY/2014[2009-10]Status: DisposedITAT Chennai23 Dec 2022AY 2009-10

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am.

For Appellant: Shri B. Ramakrishnan (CA) – Ld. ARFor Respondent: Ms. Ann L.Kapthuama (CIT) –Ld. DR
Section 143(3)Section 14A

…So far as the benchmarking of corporate guarantee is concerned, we find that this issue is squarely covered by the decision of Mumbai Tribunal in Everest Kanto Cylinders Ltd. vs. DCIT (34 Taxmann.com 19) as affirmed by Hon’ble Bombay High Court on 08/05/2015 (58 Taxmann.com 254) wherein this transaction was held to be an international transaction and the same was benchmarked @0.50%. Respectfully following the same, we direct Ld. AO / TPO to adopt benchmarking rate of 0.50% and recompute the adjustment. The grounds raised by the revenue stand partly allowed. Taking the same view, TP adjustment against OFCD stand d…

Craftsman Automation Pvt. Ltd., Chennai vs. JCIT, Coimbatore

In the result, the appeal filed by the assessee is partly allowed as indicated above

ITA 652/CHNY/2016[2011-12]Status: DisposedITAT Chennai21 Dec 2022AY 2011-12

Bench: Shri Mahavir Singh, Hon’Ble & Shri Manoj Kumar Aggarwal, Hon’Bleआयकर अपील सं./Ita No.652/Chny/2016 िनधा"रण वष" /Assessment Year: 2011-12

For Appellant: Mr.N.ArjunrajFor Respondent: Dr.S.Palanikumar, CIT
Section 144C(13)Section 144C(5)Section 14ASection 92C

…d be applied. On the other hand, the ld.CIT-DR Dr.S.Palanikumar relied on the order of the TPO and that of the DRP. 2.4 We noted that this issue is covered by the decision of the Hon’ble Bombay High Court in the case of CIT v. Everest Kanto Cylinder Ltd. (378 ITR 57) (Bombay HC), wherein, the Libor + 200 bps point is accepted at the bench mark and hence, respectfully following the same, we upheld the order of the AO/TPO. This issue of the assessee is dismissed. 3. The next issue in this appeal is as regards to the order of the AO making disallowance of expenses relatable to exempt income by invoking prov…

Devi Sea Foods Limited, Visakhapatnam vs. Deputy Commissioner of Income Tax, Circle -3(1), Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 156/VIZ/2022[2018-19]Status: DisposedITAT Visakhapatnam16 Dec 2022AY 2018-19

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A.No.156/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2018-19) M/S Devi Sea Foods Limited Vs. Deputy Commissioner Of 50-1-51/1, A.S.R.Nagar Income Tax Seethammadhara Circle-3(I) Visakhapatnam Visakhapatnam [Pan : Aabcd0248B] अपीलधथी की ओर से/ Appellant By : Shri D.Anand, Ar प्रत्यधथी की ओर से / Respondent By : Shri M.N.Murthy Naik, Cit(Dr) सुिवधई की तधरीख / Date Of Hearing : 01.12.2022 घोर्णध की तधरीख/Date Of Pronouncement : 16.12.2022 O R D E R Per Shri S.Balakrishnan:

For Appellant: Shri D.Anand, ARFor Respondent: Shri M.N.Murthy Naik, CIT(DR)
Section 143(3)Section 144C(5)Section 14ASection 80GSection 92Section 92BSection 92C

…Finance Act, 2012. The ld. AR relied on the following case laws: (i) DCIT vs. EIH Ltd – [2018] 89 taxmann.com 417 (Kolkata Trib). (ii) GVK Power & Infrastructure Ltd vs. ACIT – [2018] 94 taxmann.com 415 (Visakhapatnam Trib.) (iii) CIT vs. Everest Kanto Ltd – 378 ITR 57 (Bombay HC) (iv) PCIT vs. Thomas Cook Ltd – ITA Nos. 712 & 713/2017, dated 26/08/2019. 10. The Ld. AR further submitted that the Hon’ble Courts and Tribunals have held that 0.50% on an average as corporate guarantee commission on the guarantees extended to AE, should it be treated as international transaction. The Ld. AR pleaded that the AE of the…

M/S Greatship (India) Ltd, Mumbai vs. Add/Jt/Dy/CIT/Asstt/ITO/NFAC, Delhi

In the result, appeal filed by the Appellant is allowed

ITA 650/MUM/2022[2017-18]Status: DisposedITAT Mumbai07 Dec 2022AY 2017-18
For Appellant: Shri M M GolwalaFor Respondent: Ms. Samruddhi Hande
Section 133(6)Section 143(3)Section 144BSection 144C(13)Section 144C(5)Section 14ASection 92BSection 92C

…ommission that was paid by the assessee to a bank for standing guarantee on its behalf for a third party. Further, the Tribunal after drawing support from the order of the Hon‟ble High Court of Bombay in the case of CIT Vs. Everest Kanto Cylinders Ltd. (2015) 378 ITR 57 (Bom), had approved the determination of ALP of the corporate guarantee given by the assessee to the bank in order to facilitate raising of loan by its AE i.e on the basis of the aforesaid Internal CUP applied by the assessee. In its aforesaid order the Tribunal had observed as under: 6 Assessment Year: 2017-18 “17. We have carefully considered t…

Asst. Commissioner of Income Tax-3(4), Mumbai-400005 vs. M/S. Everest Kanto Cylinder Ltd., Mumbai-400021

ITA 1172/MUM/2022[2014-15]Status: DisposedITAT Mumbai24 Nov 2022AY 2014-15

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year: 2013-14 & Assessment Year: 2014-15

For Appellant: Shri Shekhar Gupta, A.RFor Respondent: Shri Samruddhi Dhananjay Hande, D.R
Section 92C

…by the Tribunal in assessee’s own case by upholding the corporate guarantee commission @ 0.5% as has been benchmarked by the assessee for A.Y. 2013-14 & 2014-15 which has also been confirmed by Hon’ble Bombay High Court in assessee’s own case cited as (2015) 378 ITR 57 (Bom.), the order passed by Ld. CIT(A) does not suffer from any illegality. 12. The Ld. D.R. for the Revenue has not controverted the legal position settled by the Hon’ble Bombay High Court on this issue in case of assessee itself. 13. So we are of the considered view that since the facts qua the years under consideration are identical and there…

ACIT Cir 3(4), Mumbai vs. M/S. Everest Kanto Cylinder Ltd, Mumbai

ITA 1793/MUM/2021[2013-14]Status: DisposedITAT Mumbai24 Nov 2022AY 2013-14

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year: 2013-14 & Assessment Year: 2014-15

For Appellant: Shri Shekhar Gupta, A.RFor Respondent: Shri Samruddhi Dhananjay Hande, D.R
Section 92C

…by the Tribunal in assessee’s own case by upholding the corporate guarantee commission @ 0.5% as has been benchmarked by the assessee for A.Y. 2013-14 & 2014-15 which has also been confirmed by Hon’ble Bombay High Court in assessee’s own case cited as (2015) 378 ITR 57 (Bom.), the order passed by Ld. CIT(A) does not suffer from any illegality. 12. The Ld. D.R. for the Revenue has not controverted the legal position settled by the Hon’ble Bombay High Court on this issue in case of assessee itself. 13. So we are of the considered view that since the facts qua the years under consideration are identical and there…

Havells India Ltd., Delhi vs. DCIT (Ltu), New Delhi

In the result, these appeals are partly allowed

ITA 7745/DEL/2017[2013-14]Status: DisposedITAT Delhi23 Nov 2022AY 2013-14
For Appellant: Shri Rohit Jain, AdvocateFor Respondent: Shri Mrinal Kumar Das, Senior DR
Section 80ISection 92BSection 92C

…8. Rebutting the argument of the ld. DR, the ld. AR alternatively argued that determination of the corporate guarantee at 1.3% is on a higher side and relied on the judgment of Hon’ble High Court of Bombay in the case of C IT Vs. Everest Kento Cylinders Ltd . 58 Taxmann 254 and also on the judgment of Hon’ble High Court of Bombay in the case of CIT Vs Thomas Cook (India) Ltd. in ITA No. 712 of 2017 order dated 26.08.2019. Keeping in view, the judgments of the Hon’ble Bombay High Court and in the absence of any other judgment contrarily brought to our notice, we hereby direct that the adjustment in respect of corp…

M/S. Havells India Ltd., Delhi vs. DCIT (Ltu), New Delhi

In the result, these appeals are partly allowed

ITA 1259/DEL/2017[2012-13]Status: DisposedITAT Delhi23 Nov 2022AY 2012-13
For Appellant: Shri Rohit Jain, AdvocateFor Respondent: Shri Mrinal Kumar Das, Senior DR
Section 80ISection 92BSection 92C

…8. Rebutting the argument of the ld. DR, the ld. AR alternatively argued that determination of the corporate guarantee at 1.3% is on a higher side and relied on the judgment of Hon’ble High Court of Bombay in the case of C IT Vs. Everest Kento Cylinders Ltd . 58 Taxmann 254 and also on the judgment of Hon’ble High Court of Bombay in the case of CIT Vs Thomas Cook (India) Ltd. in ITA No. 712 of 2017 order dated 26.08.2019. Keeping in view, the judgments of the Hon’ble Bombay High Court and in the absence of any other judgment contrarily brought to our notice, we hereby direct that the adjustment in respect of corp…

M/S United Spirits Limited, Bangalore vs. Joint Commissioner of Income Tax Special Range-7, Bangalore

In the result, ground 7 is allowed for statistical purposes

ITA 3091/BANG/2018[2014-15]Status: DisposedITAT Bangalore22 Nov 2022AY 2014-15

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.3091/Bang/2018 : Asst.Year 2014-2015 M/S.United Spirits Limited The Joint Commissioner Of 6Th Floor, Ub Towers, Income-Tax, Special Range-7 V. Bangalore. # 24 Vittal Mallya Road Bangalore – 560 001. Pan : Aaccm8043J. (Appellant) (Respondent)

For Appellant: Sri.Percy Pardiwala, Senior Counsel and Sri.Ankur Pai, AdvocateFor Respondent: Sri. Manjunath Karkihalli, CIT –DR
Section 115PSection 143(2)Section 143(3)Section 14ASection 234BSection 36(1)(iii)Section 92C

…xmann.com 152 and contended that the adjustment if any should be restricted to 0.2% as held in the above decision. The learned DR relied on the TPO, DRP orders and justified the addition. 8.6.1 The Bombay High Court in CIT v Everest Kento Cylinders Ltd [2015] 378 ITR 57 dismissed the revenue’s appeal and upheld the charging of guarantee commission at 0.5% on the corporate guarantee. Thus, the contention of the learned AR that TP adjustment should not be made cannot be accepted. The co-ordinate bench in the case of Manipal Global Education Services Pvt. Ltd ITA No 388/Bang/2016 and recently in Medreich Ltd ITA No…

DCIT Cent. Cir 8(3), Mumbai vs. M/S 63 Moon Technologies India Ltd, Mumbai

In the result, the appeal by the Revenue is dismissed

ITA 1515/MUM/2022[2011-12]Status: DisposedITAT Mumbai21 Nov 2022AY 2011-12

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Sukhsagar SyalFor Respondent: M/s. Vatsalaa Jha
Section 250

…50/0 to 0.50/0 ignoring the Appropriate CUP with mark-up as applied by the TPO? 1.3 Whether on the facts and circumstances of the case and in law, the Id. CIT(A) is correct in relying on the decision in the case of CIT Vs. Everest Kanto Cylinders Ltd.. [2015] 378 ITR 57 in arriving at the 0.50% rate of corporate guarantee fees, which is in violation of provisions of Rule 10B(4) of IT Rules as the determinants of corporate guarantee fee like the credit rating, interest rate and FAR analysis etc., differ case to case and year on year and so arate arrived at in a particular case and for particular assessment year ca…

Varroc Engineering Pvt.Ltd, Aurangabad vs. Assistant Commissioner of Income-Tax, Circle - 3, Aurangabad

In the result, the appeal of the assessee is allowed

ITA 623/PUN/2022[2018-19]Status: DisposedITAT Pune02 Nov 2022AY 2018-19

Bench: Shri Inturi Rama Roao & Shri Partha Sarathi Chaudhury

For Appellant: Shri Kishor PhadkeFor Respondent: Shri Keyur Patel – CIT-DR
Section 92B(1)(c)Section 92C

…IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, PUNE BEFORE SHRI INTURI RAMA ROAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER I.T.A. No. 623/PUN/2022 – A.Y. 2018-19 Varroc Engineering Ltd., L4, MIDC, Industrial Area Waluj, Aurangabad 431 136 PAN: AAACV 2420 J : Appellant Vs. The Asstt. CIT Cir. 3, Aurangabad : Respondent Appellant by : Shri Kishor Phadke Respondent by : Shri Keyur Patel – CIT-DR Date of Hearing : 09-11-2022 Date of Pronouncement : 09-11-2022 ORDER PER SHRI PARTHA SARATHI CHAUDHURY, JM This appeal preferred by the assessee emanates from the ld. D.R.P.’s order 09-06-202…

Dy CIT CC 1 (2), Mumbai vs. M/S Pfs Shipping (India) Ltd., Mumbai

In the result appeal of the revenue is dismissed

ITA 8003/MUM/2019[2010-11]Status: DisposedITAT Mumbai18 Oct 2022AY 2010-11

Bench: Shri Amit Shukla, Jm & Shri S Rifaur Rahman, Am आयकरअपीलसं./ I.T.A. No.8002 & 8003/Mum/2019 (निर्धारणवर्ा / Assessment Year: 2009-10) Dy Cit Cc 1(2) Mumbai M/S. Pfs Shipping 906 9Th Flr Pratishtha (India) Ltd. बिधम/ Bhavan Old Cgo Bldg 5Th Flr Bhupati (Annex) M K Road. Chambers 13 Natjew Vs. Mumbai 400004 Road, Opera House. Mumbai 400004 स्थायीलेखासं./जीआइआरसं./Pan No. Aadca8387L (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant By : None प्रत्यथीकीओरसे/Respondent By : Ms. Vatsala Jha-Cit (Dr) सुनवाईकीतारीख/ : 20.07.2022 Date Of Hearing घोषणाकीतारीख / Date Of Pronouncement : 18.10.2022

For Appellant: NoneFor Respondent: Ms. Vatsala Jha-CIT (DR)
Section 143(3)Section 92

…aw in directing that TPO to reduced the transfer pricing adjustment of corporate guarantee given for the AE to 0.5% instead of 3% charged by the TPO relying upon the judgment of Hon’ble Bombay High Court in the case of Everest Kanto Cylinders Ltd. Reported in 378 ITR 57. 2. We will take up the appeal for the AY 2009-2010 and our finding given therein will apply mutatis mutandis in the Appeal for the Assessment Year 2010-2011. The brief facts are that, Assessee Company is engaged in shipping business and opted for tonnage tax scheme (115 VP). During the course of assessment proceedings reference was made by the As…

Dy CIT CC 1 (2), Mumbai vs. M/S Pfs Shipping (India) Ltd., Mumbai

In the result appeal of the revenue is dismissed

ITA 8002/MUM/2019[2009-10]Status: DisposedITAT Mumbai18 Oct 2022AY 2009-10

Bench: Shri Amit Shukla, Jm & Shri S Rifaur Rahman, Am आयकरअपीलसं./ I.T.A. No.8002 & 8003/Mum/2019 (निर्धारणवर्ा / Assessment Year: 2009-10) Dy Cit Cc 1(2) Mumbai M/S. Pfs Shipping 906 9Th Flr Pratishtha (India) Ltd. बिधम/ Bhavan Old Cgo Bldg 5Th Flr Bhupati (Annex) M K Road. Chambers 13 Natjew Vs. Mumbai 400004 Road, Opera House. Mumbai 400004 स्थायीलेखासं./जीआइआरसं./Pan No. Aadca8387L (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant By : None प्रत्यथीकीओरसे/Respondent By : Ms. Vatsala Jha-Cit (Dr) सुनवाईकीतारीख/ : 20.07.2022 Date Of Hearing घोषणाकीतारीख / Date Of Pronouncement : 18.10.2022

For Appellant: NoneFor Respondent: Ms. Vatsala Jha-CIT (DR)
Section 143(3)Section 92

…aw in directing that TPO to reduced the transfer pricing adjustment of corporate guarantee given for the AE to 0.5% instead of 3% charged by the TPO relying upon the judgment of Hon’ble Bombay High Court in the case of Everest Kanto Cylinders Ltd. Reported in 378 ITR 57. 2. We will take up the appeal for the AY 2009-2010 and our finding given therein will apply mutatis mutandis in the Appeal for the Assessment Year 2010-2011. The brief facts are that, Assessee Company is engaged in shipping business and opted for tonnage tax scheme (115 VP). During the course of assessment proceedings reference was made by the As…

Mega Soft Limited, Chennai vs. DCIT, Chennai

In the result, the appeal filed by the assessee is partly allowed

ITA 733/CHNY/2017[2012-13]Status: DisposedITAT Chennai21 Sept 2022AY 2012-13

Bench: Shri V. Durga Rao, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.733/Chny/2017 िनधा"रण वष" /Assessment Year: 2012-13 M/S.Mega Soft Ltd., V. The Dy. Commissioner – No.85, Kutchery Road, Of Income Tax, Mylapore, Chennai-600 004. Corporate Circle-4(1), Chennai. [Pan: Aabcm 8933 A] (अपीलाथ"/Appellant) (""यथ"/Respondent) : अपीलाथ" क" ओर से/ Appellant By Mr.M.Muraleedhara Reddy,Ca & Mr.Nagaprasad, Ca ""यथ" क" ओर से /Respondent By : Dr.S.Palani Kumar, Cit सुनवाई क" तारीख/Date Of Hearing : 28.07.2022 घोषणा क" तारीख /Date Of Pronouncement : 21.09.2022

For Respondent: Dr.S.Palani Kumar, CIT
Section 144(5)Section 144C(13)Section 92B

…he basis of internal comparable uncontrolled price charged by the bank @ 0.85% is reasonable for benchmarking corporate guarantee. The M/s.Mega Soft Ltd. :: 10 :: Hon’ble Bombay High Court in the case of CIT v. Everest Kanto Cylinder Ltd. reported in (2015) 378 ITR 57 (Bom.) had considered an identical transaction and held that 0.5% is appropriate rate for bench marking corporate guarantee given by the assessee to its AE. Therefore, considering the facts and circumstances of the case and also by following the decision of the Hon’ble Bombay High Court in the case of Everest Kanto Cylinder Ltd. (supra), we d…