Micro Inc Ltd. v. ACIT

63 SOT 113Income Tax Appellate Tribunal2014#3201 most cited

What is Micro Inc Ltd. v. ACIT authority for?

The issuance of corporate guarantees does not constitute an 'international transaction' under Section 92B of the Income Tax Act, and therefore, no addition can be made on this basis.

37

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 2016 to 2022.

Also referred to as

Micro Inc Ltd v ACIT · 63 SOT 113 · ITAT · corporate guarantee · international transaction · section 92B · transfer pricing · benchmarking

Issues it is cited on

section 92f(v)section 92b(1)section 45(2)section 92f(ii)section 43dsection 92fsection 92(1)corporate guaranteeminimum alternate taxsection 92bproject completion methodsection 10b

Judgments citing Micro Inc Ltd. v. ACIT

Dr.Reddy'S Laboratories Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-17(1), Hyderabad

In the result, appeals of the Revenue in ITA No

ITA 1328/HYD/2018[2014-15]Status: DisposedITAT Hyderabad08 Aug 2022AY 2014-15

Bench: Shri Laxmi Prasad Sahu & Shri K.Narasimha Charyआ.अपी.सं / "नधा"रण अपीलाथ" / "" यथ" /

For Appellant: Shri K.R.Sekar &For Respondent: 04/07/2022
Section 10B

…ing of section 92B of the Act and, therefore, the addition made on this score is directed to be deleted. 10. Ld. AR, while placing reliance on the decision reported in Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019, DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 argued that the issue of corporate guarantee is not an international transaction…

Dy. Commissioner of Income Tax, Circle-17(1), Hyderabad vs. Dr.Reddy'S Laboratories Limited, Hyderabad

In the result, appeals of the Revenue in ITA No

ITA 1285/HYD/2018[2014-15]Status: DisposedITAT Hyderabad08 Aug 2022AY 2014-15

Bench: Shri Laxmi Prasad Sahu & Shri K.Narasimha Charyआ.अपी.सं / "नधा"रण अपीलाथ" / "" यथ" /

For Appellant: Shri K.R.Sekar &For Respondent: 04/07/2022
Section 10B

…ing of section 92B of the Act and, therefore, the addition made on this score is directed to be deleted. 10. Ld. AR, while placing reliance on the decision reported in Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019, DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 argued that the issue of corporate guarantee is not an international transaction…

Dr.Reddy'S Laboratories Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-17(1), Hyderabad

In the result, appeals of the Revenue in ITA No

ITA 1269/HYD/2018[2013-14]Status: DisposedITAT Hyderabad08 Aug 2022AY 2013-14

Bench: Shri Laxmi Prasad Sahu & Shri K.Narasimha Charyआ.अपी.सं / "नधा"रण अपीलाथ" / "" यथ" /

For Appellant: Shri K.R.Sekar &For Respondent: 04/07/2022
Section 10B

…ing of section 92B of the Act and, therefore, the addition made on this score is directed to be deleted. 10. Ld. AR, while placing reliance on the decision reported in Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019, DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 argued that the issue of corporate guarantee is not an international transaction…

Dr.Reddy'S Laboratories Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-17(1), Hyderabad

In the result, appeals of the Revenue in ITA No

ITA 1268/HYD/2018[2011-12]Status: DisposedITAT Hyderabad08 Aug 2022AY 2011-12

Bench: Shri Laxmi Prasad Sahu & Shri K.Narasimha Charyआ.अपी.सं / "नधा"रण अपीलाथ" / "" यथ" /

For Appellant: Shri K.R.Sekar &For Respondent: 04/07/2022
Section 10B

…ing of section 92B of the Act and, therefore, the addition made on this score is directed to be deleted. 10. Ld. AR, while placing reliance on the decision reported in Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019, DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 argued that the issue of corporate guarantee is not an international transaction…

Dy. Commissioner of Income Tax, Circle-17(1), Hyderabad vs. Dr.Reddy'S Laboratories Limited, Hyderabad

In the result, appeals of the Revenue in ITA No

ITA 1232/HYD/2018[2013-14]Status: DisposedITAT Hyderabad08 Aug 2022AY 2013-14

Bench: Shri Laxmi Prasad Sahu & Shri K.Narasimha Charyआ.अपी.सं / "नधा"रण अपीलाथ" / "" यथ" /

For Appellant: Shri K.R.Sekar &For Respondent: 04/07/2022
Section 10B

…ing of section 92B of the Act and, therefore, the addition made on this score is directed to be deleted. 10. Ld. AR, while placing reliance on the decision reported in Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019, DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 argued that the issue of corporate guarantee is not an international transaction…

Dy. Commissioner of Income Tax, Circle-17(1), Hyderabad vs. Dr.Reddy'S Laboratoreis Limited, Hyderabad

In the result, appeals of the Revenue in ITA No

ITA 1231/HYD/2018[2011-12]Status: DisposedITAT Hyderabad08 Aug 2022AY 2011-12

Bench: Shri Laxmi Prasad Sahu & Shri K.Narasimha Charyआ.अपी.सं / "नधा"रण अपीलाथ" / "" यथ" /

For Appellant: Shri K.R.Sekar &For Respondent: 04/07/2022
Section 10B

…ing of section 92B of the Act and, therefore, the addition made on this score is directed to be deleted. 10. Ld. AR, while placing reliance on the decision reported in Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019, DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 argued that the issue of corporate guarantee is not an international transaction…

DCIT Circle- 2(1)(1), Mumbai vs. M/S Bombay Dyeing & Manufacturing Co. Ltd, Mumbai

ITA 928/MUM/2020[2009-10]Status: DisposedITAT Mumbai05 Jul 2022AY 2009-10

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year : 2009-10 & Assessment Year: 2010-11

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Dr. Yogesh Kamar, D.R
Section 145Section 14ASection 92CSection 92F

…ign subsidiary defaults in making the payment of loan to the bank. Therefore, section 92(1) of the Act would, primarily, not be applicable at all, till the guarantee is invoked. 16. We find that Delhi Tribunal in the case of Bharti Airtel Ltd. v. ACIT [2014] 63 SOT 113 (Delhi - Trib.), held as under: "There can be number of situations in which an item may fall within the description set out in clause (c) of Explanation to Section 92B, and yet it may not constitute an international transaction as the condition precedent with regard to the 'bearing on profit, income, losses or assets' set out in Section 92B(1) ma…

ACIT, Circle - 2(1)(1), Mumbai vs. The Bombay Dyeing & Mfg. Co. Ltd., Mumbai

ITA 3299/MUM/2019[2010-11]Status: DisposedITAT Mumbai05 Jul 2022AY 2010-11

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year : 2009-10 & Assessment Year: 2010-11

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Dr. Yogesh Kamar, D.R
Section 145Section 14ASection 92CSection 92F

…ign subsidiary defaults in making the payment of loan to the bank. Therefore, section 92(1) of the Act would, primarily, not be applicable at all, till the guarantee is invoked. 16. We find that Delhi Tribunal in the case of Bharti Airtel Ltd. v. ACIT [2014] 63 SOT 113 (Delhi - Trib.), held as under: "There can be number of situations in which an item may fall within the description set out in clause (c) of Explanation to Section 92B, and yet it may not constitute an international transaction as the condition precedent with regard to the 'bearing on profit, income, losses or assets' set out in Section 92B(1) ma…

ACIT, Circle - 2(1)(1), Mumbai vs. The Bombay Dyeing & Mfg. Co. Ltd., Mumbai

ITA 2779/MUM/2019[2013-14]Status: DisposedITAT Mumbai05 Jul 2022AY 2013-14

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Year : 2009-10 & Assessment Year: 2010-11

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Dr. Yogesh Kamar, D.R
Section 145Section 14ASection 92CSection 92F

…ign subsidiary defaults in making the payment of loan to the bank. Therefore, section 92(1) of the Act would, primarily, not be applicable at all, till the guarantee is invoked. 16. We find that Delhi Tribunal in the case of Bharti Airtel Ltd. v. ACIT [2014] 63 SOT 113 (Delhi - Trib.), held as under: "There can be number of situations in which an item may fall within the description set out in clause (c) of Explanation to Section 92B, and yet it may not constitute an international transaction as the condition precedent with regard to the 'bearing on profit, income, losses or assets' set out in Section 92B(1) ma…

Virgo Valves & Controls Ltd, Mumbai vs. DCIT 1(3), Mumbai

ITA 5617/MUM/2016[2009-10]Status: DisposedITAT Mumbai08 Mar 2022AY 2009-10
Section 143(3)Section 92C

…the above judicial development, the ratio of a series of decisions of this Tribunal, including in the cases of assesse‟s own case (reported as 177 TTJ 609), in the case of Micro Ink Ltd Vs ACIT [(2016) 157 ITD 132 (Ahd)] and Bharati Airtel Ltd Vs ACIT [(2014) 63 SOT 113 (Del)], holding that issuance of corporate guarantees does not constitute „international transaction‟ under section 92B does not hold good in law any longer. The fact that these words are of non- jurisdictional High Court, in view of anything contrary thereto having been expressed by Hon‟ble jurisdictional High Court and for the detailed reasons s…

Virgo Valves & Controls Ltd. (Now Virgo Valves & Controls Pvt. Ltd.), Mumbai vs. DCIT - 1(3), Mumbai

ITA 5337/MUM/2016[2008-09]Status: DisposedITAT Mumbai08 Mar 2022AY 2008-09
Section 143(3)Section 92C

…the above judicial development, the ratio of a series of decisions of this Tribunal, including in the cases of assesse‟s own case (reported as 177 TTJ 609), in the case of Micro Ink Ltd Vs ACIT [(2016) 157 ITD 132 (Ahd)] and Bharati Airtel Ltd Vs ACIT [(2014) 63 SOT 113 (Del)], holding that issuance of corporate guarantees does not constitute „international transaction‟ under section 92B does not hold good in law any longer. The fact that these words are of non- jurisdictional High Court, in view of anything contrary thereto having been expressed by Hon‟ble jurisdictional High Court and for the detailed reasons s…

Virgo Valves & Controls Ltd, Mumbai vs. DCIT 1(3), Mumbai

ITA 361/MUM/2015[2010-11]Status: DisposedITAT Mumbai08 Mar 2022AY 2010-11
Section 143(3)Section 92C

…the above judicial development, the ratio of a series of decisions of this Tribunal, including in the cases of assesse‟s own case (reported as 177 TTJ 609), in the case of Micro Ink Ltd Vs ACIT [(2016) 157 ITD 132 (Ahd)] and Bharati Airtel Ltd Vs ACIT [(2014) 63 SOT 113 (Del)], holding that issuance of corporate guarantees does not constitute „international transaction‟ under section 92B does not hold good in law any longer. The fact that these words are of non- jurisdictional High Court, in view of anything contrary thereto having been expressed by Hon‟ble jurisdictional High Court and for the detailed reasons s…

Virgo Valves & Controls Ltd, Mumbai vs. DCIT 1(3), Mumbai

ITA 3577/MUM/2014[2008-09]Status: DisposedITAT Mumbai08 Mar 2022AY 2008-09
Section 143(3)Section 92C

…the above judicial development, the ratio of a series of decisions of this Tribunal, including in the cases of assesse‟s own case (reported as 177 TTJ 609), in the case of Micro Ink Ltd Vs ACIT [(2016) 157 ITD 132 (Ahd)] and Bharati Airtel Ltd Vs ACIT [(2014) 63 SOT 113 (Del)], holding that issuance of corporate guarantees does not constitute „international transaction‟ under section 92B does not hold good in law any longer. The fact that these words are of non- jurisdictional High Court, in view of anything contrary thereto having been expressed by Hon‟ble jurisdictional High Court and for the detailed reasons s…

Sona Blw Precision Forgings Ltd., New Delhi vs. DCIT, New Delhi

ITA 3134/DEL/2017[2012-13]Status: DisposedITAT Delhi18 Nov 2021AY 2012-13

Bench: Shri O.P. Kant & Ms. Suchitra Kamble[Through Video Conferencing]

Section 40Section 92BSection 92C

…owing in India. It was further submitted that no cost was involved in providing the guarantee. The assessee reiterated that provision of guarantee is not an international transaction relying on the decision of Tribunal in the case of Bharti Airtel Ltd Vs ACIT 63 SOT 113. The Ld. CIT(A) distinguished the said decision observing as under: “12.9, The decision in the case of Bharti Airtel as even otherwise distinguishable on the facts that Hon'ble Income Tax Appellate Tribunal in Shat, case was dealing with corporate guarantee and not the bank guarantee as in the case of the appellant. In the case of corporate guara…

Sona Okegawa Precision Forgings Ltd., New Delhi vs. DCIT, New Delhi

ITA 204/DEL/2017[2011-12]Status: DisposedITAT Delhi18 Nov 2021AY 2011-12

Bench: Shri O.P. Kant & Ms. Suchitra Kamble[Through Video Conferencing]

Section 40Section 92BSection 92C

…owing in India. It was further submitted that no cost was involved in providing the guarantee. The assessee reiterated that provision of guarantee is not an international transaction relying on the decision of Tribunal in the case of Bharti Airtel Ltd Vs ACIT 63 SOT 113. The Ld. CIT(A) distinguished the said decision observing as under: “12.9, The decision in the case of Bharti Airtel as even otherwise distinguishable on the facts that Hon'ble Income Tax Appellate Tribunal in Shat, case was dealing with corporate guarantee and not the bank guarantee as in the case of the appellant. In the case of corporate guara…

Siro Clinpharm P.Ltd, Mumbai vs. ITO RG 3(3)(2), Mumbai

In the result, the appeal is partly allowed in the terms indicated above

ITA 847/MUM/2016[2011-12]Status: DisposedITAT Mumbai09 Sept 2021AY 2011-12
For Appellant: Assessment year: 2011-12
Section 143(3)Section 92BSection 92C(3)

…the above judicial development, the ratio of a series of decisions of this Tribunal, including in the cases of assesse’s own case (reported as 177 TTJ 609), in the case of Micro Ink Ltd Vs ACIT [(2016) 157 ITD 132 (Ahd)] and Bharati Airtel Ltd Vs ACIT [(2014) 63 SOT 113 (Del)], holding that issuance of corporate guarantees does not constitute ‘international transaction’ under section 92B does not hold good in law any longer. The fact that these words are of non-jurisdictional High Court, in view of anything contrary thereto having been expressed by Hon’ble jurisdictional High Court and for the detailed reasons se…

Rain Cements Limited (Formerly Known As Rain Cii Carbon India Limited ), Hyderabad vs. Dy. Commissioner of Income Tax, Circle-3(1), Hyderabad

Appeals are partly allowed in above terms

ITA 1471/HYD/2018[2014-15]Status: DisposedITAT Hyderabad24 Aug 2021AY 2014-15

Bench: Shri S.S.Godara & Shri Laxmi Prasad Sahuappellant Respondent

For Appellant: Shri Nishant Thakkar, ARFor Respondent: Shri Rohit Mujumdar, DR
Section 143(3)Section 14ASection 92BSection 92C

…’s first and foremost argument raises a legal question as to whether a corporate guarantee forms an international transaction or not being a shareholder activity as per Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019. And also that such a transaction involves no benchmarking as held in DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 as well. Al…

Rain Cements Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-3(1), Hyderabad

Appeals are partly allowed in above terms

ITA 2020/HYD/2017[2013-14]Status: DisposedITAT Hyderabad24 Aug 2021AY 2013-14

Bench: Shri S.S.Godara & Shri Laxmi Prasad Sahuappellant Respondent

For Appellant: Shri Nishant Thakkar, ARFor Respondent: Shri Rohit Mujumdar, DR
Section 143(3)Section 14ASection 92BSection 92C

…’s first and foremost argument raises a legal question as to whether a corporate guarantee forms an international transaction or not being a shareholder activity as per Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019. And also that such a transaction involves no benchmarking as held in DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 as well. Al…

Rain Industries Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-3(1), Hyderabad

Appeals are partly allowed in above terms

ITA 1950/HYD/2017[2013-14]Status: DisposedITAT Hyderabad24 Aug 2021AY 2013-14

Bench: Shri S.S.Godara & Shri Laxmi Prasad Sahuappellant Respondent

For Appellant: Shri Nishant Thakkar, ARFor Respondent: Shri Rohit Mujumdar, DR
Section 143(3)Section 14ASection 92BSection 92C

…’s first and foremost argument raises a legal question as to whether a corporate guarantee forms an international transaction or not being a shareholder activity as per Micro Inc Ltd. Vs. ACIT (2015) 63 taxmann.com 353 (Ahd), Bharti Airtel Ltd Vs. ACIT (2014) 63 SOT 113 (Delhi) and ACIT Vs. Imami Ltd., ITA No.1958/Kol/2017, dt. 03-04-2019. And also that such a transaction involves no benchmarking as held in DCIT Vs. Dishman Pharmaceuticals and Chemicals Ltd. [103 taxmann.com 271] (Ahd), M/s.Ucal Fuel Systems Ltd., Vs. ACIT, ITA No.725/Mds/2015 and Aaradhana Realities Ltd., Vs. ACIT, ITA No.1942/M/2015 as well. Al…

Ncc Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Central Circle-1(1), Hyderabad

Appeals are dismissed in above terms

ITA 435/HYD/2018[2013-14]Status: DisposedITAT Hyderabad19 Aug 2021AY 2013-14

Bench: Shri S.S.Godara & Shri Laxmi Prasad Sahuappellant Respondent

For Appellant: Shri C.S.Subramanyam, ARFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 1Section 143(3)Section 92B

…tment.” 5. We find no merit in the assessee’s foregoing contentions. There is no dispute that this tribunal’s various earlier co- ordinate bench decisions (2015) 63 taxmann.com 353 (Ahd- trib), Micro Ink Ltd Vs. ACIT, Bharti Airtel Ltd., Vs. Addl.CIT, (2014) 63 SOT 113 (Delhi) and (2017) 86 taxmann.com 254 (Hyd) Bartronics India Ltd, Vs. DCIT had indeed held a corporate guarantee to be purely a shareholder activity than forming an international transaction u/s.92B of the Act. This legal proposition is no more res integra in view of the PCIT Vs. M/s.Redington (India) Limited, TCA Nos.590 & 591 of 2019, :- 5 -: I…

Micro Inc Ltd. v. ACIT (63 SOT 113) — Cited in 37 Judgments | BharatTax