Assistant Commissioner of Income tax, Circle-1(1), Guntur V. CCL Product (INDIA) Private Limited, Guntur

ITA 191/VIZ/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7280 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Assessee Lawyers: K RAMESH BABU
• Keywords: Transfer pricing; International transaction; Wholly owned subsidiary; Arm length price
• Section: 143(3); 92B; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 191 /VIZ/ 201 8 ( / ASSESSMENT YEAR: 20 13 - 1 4 ) DY .COMMISSIONER OF INCOME - TAX , CIRCLE - 1(1) GUNTUR VS. M/S CCL PRODUCTS (INDIA) PVT. LTD. DUGGIRALA POST & MANDAL GUNTUR [PAN : AAACC9552G ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI K.C.DAS, DR / RESPONDENT BY : SHRI K.RAMESH BABU, AR / DATE OF HEARING : 19 . 0 9 .201 8 / DATE OF PRONOUNCEMENT : 28 . 0 9 .201 8 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) [CIT(A)] - 2, GUNTUR VIDE I.T.A.NO.10131/2016 - 17 DATED 06 . 03 .201 8 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR 2. GROUND NOS.1 TO 3 ARE RELATED TO THE DETERMINATION OF ARM LENGTH PRICE IN RESPECT OF INTEREST CHARGED ON ADVANCES GIVEN TO THE SUBSIDIARY COMPANY M/S JAYANT PTE LTD, WHICH IS ALSO THE ASSOCIATED ENTERPRISE(AE) OF THE ASSESSEE COMPANY. THE ASSESSEE IS A PUBLIC LIMITED COMPANY LISTED IN THE BSE & NSE STOCK EXCHANGES AND IS A 100% EOU WITH ABOUT 97% OF EXPORT SALES. IT IS HAVING 100% SUBSIDIARY IN SINGAPORE I.E. M/S JAYANT PTE LTD. WHICH IN TURN HAS ESTABLISHED INSTANT COFFEE MANUFACTURING UNITS IN SWITZERLAND AND VIETNAM THROUGH ITS 100% SUBSIDIARIES IN THE RESPECTIVE COUNTRIES. HENCE, IN EFFECT ALL THESE STEP DOWN SUB SIDIARIES ARE 100% SUBSIDIARIES OF THE ASSESSEE COMPANY. AS ON 01.04.2012, THERE WAS AN OUTSTANDING LOAN OF RS.9.645 CRORES LENT TO ITS SUBSIDIARY COMPANY, M/S JAYANT PTE LTD. THE ENTIRE LOAN OF RS.9.645 CRORES WAS LENT TO 100% SUBSIDI ARY COMPANY STATED TO BE OUT OF ITS OWN INTERNAL ACCRUALS WHICH ARE TO THE TUNE OF RS.253.04 CRORES AS ON 31.03.2012. SINCE THERE WAS AN INTERNATIONAL TRANSACTIONS WITH AE, THE AO REFERRED THE ISSUES TO THE TPO FOR DETERMINING ARMS LENGTH PRICE(ALP). THE A SSESSEE HAD INTERNATIONAL TRANSACTIONS WITH ITS AES FOR EXPORT OF INSTANT COFFEE AND THE TPO HAS ACCEPTED THAT THE EXPORT TRANSACTIONS WERE AT ALP. IN RESPECT OF THE RECEIPT OF INTEREST FROM AE, THE AO WAS OF THE VIEW THAT THE CHARGING OF INTEREST 3 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR @4.55% ON OUTBOUND LOANS IS NOT AT ALP, HENCE, SHOW CAUSED THE ASSESSEE AS TO WHY THE INTEREST AT PLR PREVALENT IN THE FINANCIAL YEAR 2012 - 13 SHOULD NOT BE CHARGED ON THE AMOUNTS ADVANCED TO ITS AE. THE ASSESSEE EXPLAINED THAT IT HAS CHARGED THE INTEREST @4.5% ON OUTBOUND LOANS AND THE CCL ALSO PAID THE INTEREST @4.5% TO THE FINANCIAL INSTITUTIONS ON THE LOANS AVAILED BY IT THUS HELD THE TRANSACTIONS TO BE AT ARMS LENGTH AND NO ADJUSTMENT IS REQUIRED TOWARDS THE INTEREST . THE LD.AR FURTHER SUBMITTED BEFORE T HE TPO THAT THE ASSESSEE HAD HUGE INTEREST FREE FUNDS AND OUT OF THE INTEREST FREE ACCRUALS, THE AMOUNTS WERE ADVANCED TO ITS SUBSIDIARY, THUS THE ASSESSEE HAD NOT INCURRED ANY INTEREST EXPENDITURE ON THE AMOUNTS ADVANCED TO ITS AE, HENCE, ARGUED THAT NO INTEREST IS REQUIRED TO BE DISALLOWED. THE LD.AR FURTHER ARGUED THAT THE INTEREST CHARGED BY THE ASSESSEE @4.5.% IS ABOVE THE LIBOR WHICH IS NORMALLY ACCEPTED RATE OF INTEREST IN INTERNATIONAL TRANSACTIONS IN OUTBOUND LOANS AND THE SAME IS CONSIDERED TO B E AT ARM LENGTH PRICE. HOWEVER, NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE TPO HAS CHARGED THE INTEREST @14.45% PLR PREVAILING DURING THE FINANCIAL YEAR 2012 - 13 AND PROPOSED FOR ADJUSTMENT. THE AO MADE THE ADJUSTMENT AS PROPOSED BY THE TPO AND 4 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR ACCORDINGLY MADE THE ADDITION OF RS. 62,07,858/ - IN RESPECT OF THE ADJUSTMENT OF INTEREST ON THE AMOUNTS ADVANCED TO ITS AE. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) DELETED THE ADDITIO N HOLDING THAT ON THE LOAN GRANTED BY THE ASSESSEE TO ITS AE LOCATED AT ABROAD, LIBOR RATE OF INTEREST IS APPLICABLE FOR DETERMINING THE ARM LENGTH PRICE. SINCE, THE INTEREST CHARGED BY THE ASSESSEE ON LOAN GIVEN TO ITS AE WAS HIGHER THAN THE LIBOR, THE SAME IS TO BE ACCEPTED AND NO ADJUSTMENT IS WARRANTED. THE LD.CIT(A) RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. COTTON NATURALS (I) PVT. LTD. (2015) 55 TAXMANN.COM 523 (DELHI), HONBLE BOMBAY HIGH COURT IN THE CASE OF CI T VS. TATA AUTO COMP SYSTEMS LTD. 374 ITR 516 (BOMBAY), THE DECISION OF ITAT CHENNAI BENCH IN THE CASE OF SIVA INDUSTRIES AND HOLDING LTD. VS. ACIT (2011) 11 TAXMANN.COM 404 (CHENNAI). FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF TH E ORDER OF THE LD.CIT(A) WHICH READS AS UNDER : M/S. CCL PRODUCTS (INDIA) LTD., IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF INSTANT COFFEE/SOLUBLE COFFEE. WHILE COMPLETING THE SCRUTINY ASSESSMENT U/S. 143(3) THE AO HAS DISALLOWED THE DIFFERENCE IN ARM' S LENGTH PRICE AS DETERMINED BY THE TPO OF RS.62,07,858/ - . 5 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR THE ASSESSEE IS A PUBLIC LIMITED COMPANY LISTED IN THE BSE & NSE STOCK EXCHANGES AND IS A 100% EOU WITH ABOUT 98% EXPORT SALES. IT IS HAVING A 100% SUBSIDIARY IN SINGAPORE VIZ. M/S. JAYANT PTE LTD WHICH IN TURN HAS ESTABLISHED INSTANT COFFEE MANUFACTURING UNITS IN SWITZERLAND AND VIETNAM THROUGH ITS L00% SUBSIDIARY IN THE RESPECTIVE COUNTRIES. HENCE, IN EFFECT ALL THESE STEP DOWN SUBSIDIARIES ARE 100% SUBSIDIARIES OF THE COMPANY AND THEIR PROFITS AN D BENEFITS WILL EXCLUSIVELY ACCRUE AND BELONG TO THE ASSESSEE COMPANY ONLY. THEY WERE ESTABLISHED WITH THE PRINCIPAL AIM OF ENHANCING THE BRAND IMAGE OF COMPANY'S PRODUCTS GLOBALLY AND ALSO TO SAVE ON TRANSPORTATION COSTS. AS ON 31 - 03 - 2012, THE COMPANY IS HAVING HUGE INTERNAL ACCRUALS OF ABOUT RS.253.04 CRORES AND OUT OF THE SAME, THE COMPANY HAS LENT A SMALL AMOUNT ON TO ITS WHOLLY OWNED SUBSIDIARY VIZ. JAYANT PTE LTD. WITH THE ABOVE MENTIONED OBJECTS. I.E. ONLY FOR BUSINES S PURPOSES VIZ. ENHANCING ITS BRAND VALUE N GLOBAL MARKETS AND SAVE ON HUGE TRANSPORTATION COSTS. AS ON 01.04.2012, THE OPENING BALANCE IN THE ABOVE LOAN ACCOUNT IS RS.9.645 CRORES AND AT THE END OF THE FINANCIAL YEAR I.E. AS ON 31 - 03 - 2012 THE DOSING BALAN CE WAS RS.72,70,963/ - . IDENTICAL ISSUE HAS BEEN DECIDED BY THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011 - 12 AND 2012 - 13 IN ITA NOS. 192 & 193/VIZ/2017 DATED 21.09.2017 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND HELD THAT ON OUT BOUND LOANS, THE LIBOR RATE SHOULD BE ADOPTED. IN THE INSTANT CASE, THE ASSESSEEHAS CHARGED THE INTEREST @ 4.5% WHICH IS MORE THAN THE LIBOR RATE. RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMEN T YEAR 2011 - 6 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR 12 AND 2012 - 13 SUPRA, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS THE APPEAL OF THE REVENUE ON THIS GROUND. 4. THE NEXT ISSUE IN THIS APPEAL IS CORPORATE GUARANTEE FEE. THE ASSESSEE HAS GIVEN CORPORATE GUARANTEE TO ITS AE, FOR AN AMOUNT O F RS.163,69,02,000/ - WHICH WAS NOT DISCLOSED IN FORM 3CEB AND TP STUDY REPORT AND NO INCOME WAS OFFERED FROM IT. THE TPO LEVIED GUARANTEE CHARGES @1.3% ON RS.163,69,02,000/ - AND PROPOSED THE ADJUSTMENT OF RS.2,12,79,726/ - , WHEREAS THE COMPANY DID NOT PROV IDE FOR GUARANTEE CHARGES. THE ASSESSEE SUBMITTED BEFORE THE TPO THAT THE ASSESSEE HAD NOT INCURRED ANY EXPENDITURE FOR CORPORATE GUARANTEE AND THE GUARANTEE WAS GIVEN TO PROTECT THE INTEREST OF SHAREHOLDERS AND FOR SECURING THE CREDIT FACILITIES TO IT S 100% SUBSIDIARIES WHICH ARE NEW COMPANIES WITHOUT ANY FINANCIAL TRACK RECORD AND CREDIT RATING. THEREFORE, THE LD.AR SUBMITTED BEFORE THE TPO THAT THERE IS NO CASE FOR MAKING ANY ADJUSTMENT ON ACCOUNT OF GUARANTEE CHARGES. HOWEVER, NOT BEING IMPRESSED WITH THE EXPLANATION OFFERED BY THE ASSESSEE, THE TPO SUGGESTED FOR ADJUSTMENT OF ALP TOWARDS CORPORATE GUARANTEE FOR AN AMOUNT OF RS. RS.2,12,79,726/ - , U/S 92CA OF THE ACT. ACCORDINGLY, THE AO MADE THE ADDITION WHILE FRAMING THE ASSESSMENT 7 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR U/S 143(3) R.W .S.92CA(3) DATED 27.12.2016 AND MADE THE ADDITION OF RS.2,12,79,726/ - . ON APPEAL, THE LD.CIT(A) HELD THAT PROVIDING CORPORATE GUARANTEE ON BEHALF OF ITS 100% SUBSIDIARY AE WOULD NOT CONSTITUTE AN INTERNATIONAL TRANSACTION WITHIN THE MEANING OF SECTION 9 2B OF THE ACT AND ACCORDINGLY HELD THAT NO ADJUSTMENT IS WARRANTED. THE LD.CIT(A) RELIED ON THE DECISION OF HONBLEITAT,HYDERABAD IN THE CASE OF BATRONICS INDIA LIMITED VS. DY.COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), HYDERABAD REPORTED IN (2017) 86 TAXMAN N 254. FOR THE SAKE OF CLARITY, WE EXTRACT RELEVANT PART OF THE ORDER OF THE LD.CIT(A) WHICH READS AS UNDER : RESPECTFULLY FOLLOWING THE RATIONALE OF RECENTLY PRONOUNCED JUDGMENTS ON CORPORATE GUARANTEE BY THE HON'BLE ITAT, HYDERABAD IN THE CASES OF BATR ONICS INDIA LIMITED VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), HYDERABAD (2017) 86 TAXMANN 254 AND IN THE CASE OF DR. REDDY'S LABORATORIES LIMITED VS. ADDITIONAL COMMISSIONER OF INCOME - TAX, CIRCLE - 1(2), HYDERABAD (2017), 81 TAXMANN 398, WHEREIN, IT WAS CLEARLY MENTIONED THAT THE ASSESSEE HAD NOT INCURRED ANY COST IN PROVIDING CORPORATE GUARANTEE ON BEHALF OF ITS AE, IT WOULD NOT CONSTITUTE 'INTERNATIONAL TRANSACTION' WITHIN THE MEANING OF SEC. 92 B AND THEREFORE, ALP ADJUSTMENT WAS NOT WARRANTED ON SAID ASPECT'. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. DURING THE APPEAL HEARING, THE LD.AR ARGUED THAT PROVIDING CORPORATE GUARANTEE TO ITS AE WOULD NOT CONSTITUTE AN INTERNATIONAL TRANSACTION AS HELD BY VARIOUS TRIB UNALS AND HENCE NO ADJUSTMENT IS REQUIRED. THE LD.AR FURTHER SUBMITTED THAT THE AE IS 100% SUBSIDIARY OF THE 8 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR ASSESSEE COMPANY, HENCE IT IS THE OBLIGATION OF THE ASSESSEE TO EXTEND ITS SUPPORT TO IMPROVE THE BUSINESS AND SMOOTH RUNNING OF THE COMPANY WITHO UT ANY FINANCIAL IMPEDIMENT. THEREFORE THE LD.AR SUBMITTED THAT THE CORPORATE GU ARANTEE IS GIVEN TO ITS AE IN THE COMMERCIAL INTEREST AND NO EXPENDITURE WAS INCURRED, THUS THERE IS NO CASE OF ANY ADJUSTMENT AND NO ADDITION IS WARRANTED IN THE ASSESSEES CASE. THE LD.AR INVITED OUR ATTENTION TO THE DECISION OF ITAT KOLKATA, C BENCH IN THE CASE OF DCIT, CIRCLE - 8(1), KOLKATA VS. M/S EIH LTD., [2018] 89 TAXMANN.COM 417 (KOLKATA TRIB) WHEREIN HONBLE ITAT HELD AS UNDER : 12.12. THUS, WE HOLD THAT WHEN A PARENT COMPANY EXTENDS AN ASSISTANCE TO THE SUBSIDIARY, BEING ASSOCIATED ENTERPRISE, SUCH AS CORPORATE GUARANTEE TO A FINANCIAL INSTITUTION FOR LENDING MONEY TO THE SUBSIDIARY, WHICH DOES NOT COST ANYTHING TO THE PARENT COM PANY, AND WHICH DOES NOT HAVE ANY BEARING ON ITS PROFITS, INCOME, LOSSES OR ASSETS, IT WILL BE OUTSIDE THE AMBIT OF INTERNATIONAL TRANSACTION UNDER SECTION 9213(1) OF THE ACT. IN THIS REGARD, WE WOULD LIKE TO HOLD THAT ISSUANCE OF CORPORATE GUARANTEE BY TH E ASSESSEE TO ITS AE WOULD HAVE INFLUENCE ON THE PROFITS, INCOMES, LOSSES OR ASSETS OF ENTERPRISE 'BUT NOT NECESSARILY HAVE ANY IMPACT ON THE PROFITS, INCOMES, LOSSES OR ASSETS' AS ADMITTEDLY NO CONSIDERATION WAS RECEIVED BY THE ASSESSEE IN RESPECT OF THIS CORPORATE GUARANTEE FROM ITS AE. WE FIND THAT THE AHMEDABAD TRIBUNAL IN THE EASE OF MICRO INK LTD. (SUPRA) HAD OBSERVED THAT IF A SUBSIDIARY (AE IN THE INSTANT CASE) COULD NOT BORROW MONEY FROM THIRD PARTY SOURCES ON ITS OWN STANDING AND THE GUARANTEE PRO VIDED BY THE PARENT (ASSESSEE IN THE INSTANT SE) ENABLES IT TO MAKE SUCH BORROWING, THEN THE GUARANTEE COULD BE SAID TO BE A SHAREHOLDER FUNCTION, NOT WARRANTING A GUARANTEE FEE. THIS RATIO WOULD SQUARELY BE APPLICABLE TO THE FACTS OF THE INSTANT CASE BEFO RE US. 5.1. SIMILARLY IN THE CASE DR.REDDY LABORATORIES LIMITED V S ADDITIONAL COMMISSIONER OF INCOME TAX,CIRCLE - 1(2),HYDERABAD REPORTED IN 81 TAXMAN 9 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR 398, THE COORDINATE BENCH OF ITAT HYDERABAD A HELD THAT WHERE THE ASSESSEE HAD NOT INCURRED ANY CORPOR ATE GUARANTEE CHARGES ON BEHALF OF ITS AE IT WOULD NOT CONSTITUTE INTERNATIONAL TRANSACTION WITHIN THE MEANING OF 292B OF THE ACT. FOR READY REFERENCE, WE EXTRACT PARA NO.29 OF THE ORDER OF THE ITAT WHICH READS AS UNDER : 29 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ITAT, DELHI BENCH IN THE CASE OF BHARATI AIRTEL LTD., ( SUPRA ) HAS CONSIDERED AN IDENTICAL ISSUE WHICH WAS RE - AFFIRMED IN THE CASE OF SIRO CLINPHARMA (P.) LTD. V. DY. CIT [IT APPEAL NO. 2618 (MUM.) OF 2014, DATED 31 - 3 - 2016). THE BENCH OBSERVED THAT TRANSFER PRICING IS A LEGISLATION SEEKING THE TAX - PAYERS TO ORGANISE THEIR AFFAIRS IN A MANNER COMPLIANT WITH THE NORMS SET - OUT. IN SHORT, IT IS AN ANTI ABUSE LEGISLATION WHICH TELLS YOU AS TO WHAT IS THE ACCEPTAB LE BEHAVIOUR BUT IT DOES NOT TRIGGER LEVY OF TAX IN A RETROSPECTIVE MANNER BECAUSE NO PARTY CAN BE ASKED TO DO AN IMPOSSIBILITY. ANALYSING FURTHER THE BENCH OBSERVED THAT THOUGH EXPLANATION TO SECTION 92B IS STATED TO BE CLARIFICATORY, IT HAS TO BE NECESSA RILY TREATED AS EFFECTIVE FROM THE A.Y. 2013 - 2014 AND IN THIS REGARD, RELIED UPON THE OBSERVATIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SKIES SATELLITE. WE HAVE ALSO ANALYSED THE CASE LAW RELIED UPON BY THE LD. D.R. AND ALSO THE PROVISIONS OF THE ACT. IN OUR CONSIDERED OPINION, THE VIEW TAKEN BY THE DELHI BENCH OF ITAT IN THE CASE OF BHARATI AIRTEL LTD. , ( SUPRA ) IS ONE OF THE POSSIBLE VIEWS ON THE MATTER AND SO LONG AS THERE IS NO BINDING DECISION OF ANY OTHER HIGHER FORUM TAKING A CONTRARY VIEW, THE ONE WHICH IS FAVOURABLE TO THE ASSESSEE HAS TO BE ADOPTED EVEN THOUGH OTHER BENCHES HAVE TAKEN A DIFFERENT VIEW. WE, THEREFORE, HOLD THAT THE EXPLANATION TO SECTION 92B CANNOT BE APPLIED RETROSPECTIVELY AND FOR THE YEARS UNDER CONSIDERATION THE ASSESSE E HAVING NOT INCURRED ANY COSTS IN PROVIDING CORPORATE GUARANTEE IT WOULD NOT CONSTITUTE 'INTERNATIONAL TRANSACTION' WITHIN THE MEANING OF SECTION 92B OF THE ACT AND CONSEQUENTLY, ALP ADJUSTMENT IS NOT WARRANTED ON THIS ASPECT. 5.2. SIMILAR VIEW WAS TAKE N UP BY THE COORDINATE BENCH OF ITAT, HYDERABAD IN THE CASE OF BATRONICS INDIA LTD. (SUPRA). IN THE INSTANT CASE, THE FACTS ARE IDENTICAL. THE ASSESSEE HAD GIVEN CORPORATE GUARANTEE TO ITS 100% SUBSIDIARY AND THE AE FOR THE PURPOSE OF BUSINESS. THE ASSE SSEE HAD 10 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR NOT INCURRED ANY EXPENDITURE TOWARDS THE CORPORATE GUARANTEE. THE REVENUE COULD NOT BRING ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAD INCURRED ANY EXPENDITURE FOR EXTENDING THE CORPORATE GUARANTEE. AS STATED BY THE LD.AR IT IS THE OBLIGATION O N THE PART OF THE ASSESSEE TO EXTEND THE SUPPORT AND ASSISTANCE TO ITS SUBSIDIARIES FOR BUSINESS DEVELOPMENT. SINCE THE FACTS ARE IDENTICAL, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY COORDINATE BENCHES IN THE CASE LAWS CITED, WE HOLD THAT THE CORPORATE GUARANTEE GIVEN BY THE ASSESSEE ON BEHALF OF ITS AE WOULD NOT CONSTITUTE AN INTERNATIONAL TRANSACTION WITHIN THE MEANING OF 92B OF THE ACT. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS T HE APPEAL OF THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER, 201 8 . S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 28 .0 9 .2018 L.RAMA, SPS 11 ITA NO . 191 /VIZ/201 8 M/S CCL PRODUCT (INDIA) PVT. LTD., GUNTUR / COPY OF THE ORDER FORWARDED TO: - 1 . / THE ASSESSEE - M/S CCL PRODUCTS (INDIA) PVT. LTD., DUGGIRALA POST & MANDAL, GUNTUR 2 . / THE REVENUE DY . COMMISSIONER OF INCOME - TAX, CIRCLE - 1(1), GUNTUR 3. THE PR. COMMISSIONER OF INCOME TAX, GUNTUR 4. THE COMMISSIONER OF INCOME TAX(APPEALS) - 2, GUNTUR 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM