Held that Arm’s length price of bank guarantee charged at rate of 1 Per Cent. is held to be justified. Optionally convertible loans to subsidiary without charging interest entitled to interest at commercial rate which was at Arm’s length hence no transfer pricing adjustment on account of interest on loans is warranted. Associated enterprises did not incur expenses on behalf of assessee hence no adjustment on transaction of reimbursement of expenses. (AY.2015-16)
Zydus Lifesciences Ltd. v. Dy. CIT (2024)113 ITR 725 (Ahd)(Trib)
S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Corporate guarantee fees-Arm’s length price of bank guarantee charged at rate of 1 Per Cent. is held to be justified-Optionally convertible loans to subsidiary without charging interest-Entitled to interest at commercial rate which was at Arm’s length-No transfer pricing adjustment on account of interest on loans is warranted-Reimbursement of expenses-Associated enterprises did not incur expenses on behalf of assessee-No adjustment on transaction of reimbursement of expenses.[S.92CA]
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