Tega Industries Limited Vs DCIT (ITAT Kolkata)
Corporate Guarantee Fee Capped at 0.5% & CSR Donation Eligible u/s 80G: ITAT Grants Partial Relief to Tega Industries
Kolkata ITAT partly allowed the appeal of Tega Industries Limited for AY 2020-21, granting significant relief on transfer pricing & deduction issues. On the issue of corporate guarantee given to overseas AEs (Tega Singapore & Tega Chile), Tribunal held that such guarantee constitutes an international transaction u/s 92B in view of the statutory Explanation. However, following consistency & binding precedents in Assessee’s own earlier years, ITAT restricted the arm’s length corporate guarantee commission to 0.5% of the outstanding loan amount & directed deletion of excess adjustment made by applying much higher rates under CUP method.
On CSR-related donations, ITAT held that deduction u/s 80G cannot be denied merely because the donation was incurred in discharge of CSR obligation u/s 135 of the Companies Act. Relying on a series of co-ordinate bench decisions, including JMS Mining (P) Ltd, Goldman Sachs Services (P) Ltd & Phillips Carbon Black Ltd, Tribunal held that except for specific exclusions like Swachh Bharat Kosh & Clean Ganga Fund, CSR donations made to eligible trusts remain deductible u/s 80G. Accordingly, disallowance of ₹52.91 lakh was deleted.
