Tribunal held that when the assessee is covered under Tonnage taxation scheme . As regards interest on purchase of two ships, no application of transfer pricing provisions to income covered under tonnage tax scheme. Tribunal held that as regards guarantee commission, the Assessing Officer is directed to make adjustment by applying 0.25 Per Cent. to transaction instead of 0.5 Per Cent. As regards advance to share application money as the shares were not allotted and full money refunded the said amount was treated as loan and rate of interest to be applied on amount at Libor. As regards service agreement ,interest to be confined up to end of year and not thereafter. ( AY.2013-14)
Essar Shipping Ltd. v. ACIT (2020) 79 ITR 555 (Mum) (Trib)
S. 92C : Transfer pricing – Arm’s length price -Shipping business- Tonnage taxation scheme – Interest on purchase of two ships- No application of transfer pricing provisions to income covered under tonnage tax scheme – Guarantee commission- Assessing Officer is directed to make adjustment by applying 0.25 Per Cent. To Transaction Instead of 0.5 Per Cent- Advance to share application money – Shares not allotted -Full money refunded- loan – Rate of interest to be applied on amount at Libor- Service agreement – Interest to be confined up to end of year and not thereafter.