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03-01-2019, Cox & Kings, Section 92B, 14A, 8D, Tribunal Mumbai

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5 months 2 weeks ago #8268 by amit
Section - 92B, 14A, 8D, 37(1), 32
Order Date - 03-01-2019
Favouring - Assessee Partly
Court - Tribunal Mumbai
Appellant - Cox & Kings Limited
Respondent - ACIT
Justice - MAHAVIR SINGH, JM & RAJESH KUMAR, AM
Citation - 119Taxpundit65
Appeal No. - IT(TP)A No. 2066/Mum/2017
Asstt. Year - 2012-13

Order

PER : MAHAVIR SINGH, JM:

This appeal is arising out of the order of Dispute Resolution Panel107, Mumbai [in short ‘DRP’], directions dated 05.09.2012. The Assessment was framed by the Addl. Commissioner of Income Tax, Range-1(1), Mumbai (in short ‘ACIT/AO’) for the assessment year 2012- 13 vide order dated 25.01.2017 under section 143(3) of the Income Tax Act, 1961(hereinafter ‘the Act’).

2. The first issue in this appeal of assessee is against the orders of TPO/DRP/AO with regard to adjustment made in respect of international taxation of provisions of corporate guarantee loan taken by AE’s. For this assessee has raised the following ground No.1: - “Adjustment made with respect to the international transaction of provision of corporate guarantee for loans taken by AEs

2. erred in making a notional adjustment on account of provision of corporate guarantee by the Appellant to its AEs. without appreciating the fact that such
transactions do not qualify as internationaltransactions within the meaning of Section 92B of the Act;

3. erred in making a notional adjustment of guarantee commission of Rs. 7,14,67,809 by determining the Arm's Length Price ('ALP') on the corporate guarantee provided by the Appellant to its subsidiaries, over and above the voluntary adjustment in respect of guarantee commission made in the return of income, aggregating to Rs. 4,71,28,451.

4. erred in not appreciating the fact that the guarantee commission of Rs. 7,14,67,809 does not accrue or deemed to accrue or received or deemed to receive to/by the Appellant from its AEs:

5. erred in not appreciating the fact that the guarantee given by the Appellant is for strategic purpose and in its capacity of a shareholder;

6. erred in not appreciating the fact that no benefit arose to the AEs from corporate guarantee given by the Appellant;

7. without prejudice to above, erred in making an adjustment of guarantee commission 1.22% [in case of Cox & Kings (Australia) Ply Limited and Prometheon Holding Limited. UK] and at the rate of 1.77% [in case of Cox & Kings Travel Limited UK], amounting to Rs 7,14,67,809. without appreciating the fact that the Appellant has suo-moto made adjustment of guarantee commission in its return of income at the rate of 0.5%;

8. without prejudice to above, erred in using information obtained from CRISIL for determining the interest rates for Appellant and its AEs. without appreciating the fact that the same was not available in public domain and not applicable to the facts of the case of Appellant.

9. wi hout prejudice to the above erred in disregard ng the decision of Income Tax Appellate Tribunal, Mumbai (ITAT) in Appellant’s own case for AY 2009-10 and AY 2010-11, wherein guarantee given has been restricted to 0.5%;

10. Without prejudice to the above, erred in disregarding the decision of the jurisdictional High Court and various decisions of the Tribunals, limiting the guarantee commission adjustment within the range of 0.2.% to 0.5%;”

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