Bank Guarantee Rates Cannot Be Considered For Benchmarking Corporate Guarantee Fee: ITAT
Live LawThe Mumbai Bench of the Income Tax Appellate Tribunal has held that bank guarantee rates cannot be considered for benchmarking corporate guarantee fees.The bench of Kavitha Rajagopal and Prashant Maharishi has remanded the file back to the assessing officer with a direction to the assessee to show the benchmarking of corporate guarantee fees. The Mumbai Bench of the Income Tax Appellate Tribunal has held that bank guarantee rates cannot be considered for benchmarking corporate guarantee fees. The bench of Kavitha Rajagopal and Prashant Maharishi has remanded the file back to the assessing officer with a direction to the assessee to show the benchmarking of corporate guarantee fees by either adopting an interest-saving approach, comparable corporate guarantee fee rates, the cost of providing the guarantee, or any other approach. Similarly, bank guarantee rates cannot be considered for benchmarking corporate guarantee fees.
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