THE ASSTT. COMMR. OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM V. DORF KETAL SPECIALITY CATALIST P. LTD., MUNDRA-KUTCH

MA 27/RJT/2024

AI Insights

The case involves M/s. Dorf Ketal Specialty Catalysts Pvt. Ltd., the appellant, who sought to amend a previous order of the Income Tax Appellate Tribunal, Rajkot, which determined the arm's length price of a corporate guarantee at 0.5%. The appellant argued that as a co-guarantor for a corporate guarantee to State Bank of India, New York, only 0.25% of the corporate guarantee fees should be attributed to them, suggesting that the other co-guarantor should bear the remaining 0.25%. The respondent, Assistant Commissioner of Income Tax, contested this, emphasizing that the Tribunal's decision was based on merits and judicial precedent, and there was no apparent mistake in the record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792957 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-09-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 02-09-2024
• Other Referred Cases: Everest Kento Cylinder Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEHUL RANPURA
• Assessee Lawyers: ABHIMANYU SINGH YADAV

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER Miscellaneous Application No.27/RJT/2024 (Arising out of IT (TP) No.86/Rjt/2018) (Asst. Year 2013-14) (Physical Hearing) M/s. Dorf Ketal Specialty Catalysts Pvt. Ltd. Plot No. 2, Sectior-12N, Adani Port & SEZ, Mundra, Kutch Vs. Assistant Commissioner of Income Tax, Gandhidham Circle, Gandhidham-Kutch èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCD3088K (Appellant) (Respondent) Appellant by : Shri Mehul Ranpura, AR Respondent by : Shri Abhimanyu Singh Yadav, Sr. D.R. Date of Hearing : 04/07/2025 Date of Pronouncement : 26/09/2025 आदेश / O R D E R Per, Dr. A. L. Saini, AM: By way of this captioned Miscellaneous Application, the assessee has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961 (in short ‘the Act’) has crept in the order of the Tribunal dated 30.04.2024 2. The issue raised by the assessee in this Miscellaneous Application are as follows: “1.0 The revenue had filed an appeal in IT(TP)A No. 86/Rjt/2018, against the order passed by the Ld. Commissioner of Income Tax (Appeals)-3, Rajkot. 2.0 Hon'ble members have vide para 15.0 of the decision given finding as under: Printed from counselvise.com Page | 2 M.A. No. 27-Rjt-2024 A.Y. 2013-14 M/s. Dorf Ketal Specialty Catalist P. Ltd. \"15. We note that the Co-ordinate Bench of ITAT Mumbai in the assessee's own case (Supra) has followed the judgement of Hon'ble High Court of Bombay in the case of Everest Kento Cylinder Limited, (Supra) and upheld the determination of arm's length price of Corporate Guarantee at 0.50%. Therefore, respectfully following the binding precedent, we direct the assessing officer to compute the arm-length price of corporate guarantee at 0.5%. The Revenue's Appeal is party allowed in above terms.\" 4.0 In this connection, it is submitted that the respondent is a co-guarantor for Corporate Guarantee to the State Bank of India, New York for providing credit facilities to its subsidiary Dorf Ketal Specialty Catalyst LLC and hence only 0.25% Corporate Guarantee fees can be treated as the share of respondent. 6.0. The appellant therefore, prays to the Hon'ble ITAT that the order under consideration may kindly be amended suitably by recalling the matter and oblige. 3. The Ld. Counsel for the assessee submitted that in the assessee’s case under consideration, there were two co-guarantor, however, entire guarantee commission was offered in the hands of the assessee, under consideration, who is one of the co-guarantor. The ld. Counsel further stated that 1/2 guarantee commission should be borne by the other co- guarantor, that is, 0.25% guarantee commission, should be borne by each co-guarantor, therefore, this order of the Tribunal may be recalled to that extent. 4. On the other hand, Ld. D.R. for the Revenue pointed out that the Tribunal has passed the order on merits and order of the Tribunal is a speaking order considering all the aspects, therefore it should not be subjected to review again by the Tribunal, as there is no mistake apparent from record, from the order of the Tribunal. 5. We have heard both the parties and perused the materials available on record. We have gone through the order of the Tribunal and noted that there is reference of co-owners/ co-guarantor, however the Tribunal by applying the judicial precedent, on the subject, held that 0.5% commission is to be added on account of guarantee commission in the hands of the assessee. It is internal matter of the co-owners/ co-guarantor, to settle the Printed from counselvise.com Page | 3 M.A. No. 27-Rjt-2024 A.Y. 2013-14 M/s. Dorf Ketal Specialty Catalist P. Ltd. amount as per their agreed ratio. However, the order of the Tribunal does not contain any mistake apparent from record. Hence, the Miscellaneous Application filed by the Assessee is dismissed. 6. In the result, Miscellaneous Application filed by the Assessee is dismissed. Order is pronounced in the open court on 26/09/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot िदनांक/ Date: 26/09/2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot Printed from counselvise.com "