In the unreported case No. ITANo. 149/HYD/2010, Section 92B of the Income Tax Act, 1961 dated 9-9-2011 it was held that Corporate Guarantee provided in respect of AE is not an international transaction in terms of section 92B of the Income tax act, 1961.
The ITAT held that no guidelines are stipulated in respect of such transaction. unlike a bank or a financial institution, provision of corporate guarantee is incidental to the business of the taxpayer. In the absence of any charging provision, such transaction cannot be considered under transfer pricing.
The ITAT held that no guidelines are stipulated in respect of such transaction. unlike a bank or a financial institution, provision of corporate guarantee is incidental to the business of the taxpayer. In the absence of any charging provision, such transaction cannot be considered under transfer pricing.
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