The assessee gave corporate guarantee to its associate enterprises (“AE’s”) who received loans from a bank which were guaranteed by the assessee. The assessee charged commission @0. 5% of the amount of guarantee given to the AE’S. The AO made adjustment to such commission @ 1.77 as against 0. 5% charged by the assessee. The Tribunal held that the issue is squarely covered by the Tribunal in assessee’s own cases for immediately preceding years and hence the adjustment should be restricted at 0. 5%. (AY. 2012-13)
Cox & Kings Ltd v. Addl. CIT (2019) 55 CCH 75/ 69 ITR 45 (SN) (Mum.)(Trib.)
S. 92B : Transfer pricing–Arm’s length price-Corporate guarantee given to associated enterprises–Arm’s length commission on such guarantee restricted to 0. 5%. [S. 92C]