ACIT Vs JSW Steel Limited (ITAT Mumbai)
The Income Tax Appellate Tribunal, Mumbai, decided three connected appeals involving Assessment Years 2016-17 and 2017-18 arising from separate orders of the Commissioner of Income Tax (Appeals). The Revenue challenged relief granted by the CIT(A) on several transfer pricing and corporate tax issues, while the assessee challenged confirmation of disallowance relating to irrecoverable property advances.
For AY 2016-17, the Tribunal dismissed the Revenue’s challenge to the deletion of transfer pricing adjustment relating to interest on loans advanced to associated enterprises. The Tribunal noted that identical issues in the assessee’s own earlier assessment years had already been decided in the assessee’s favour. It observed that the TPO had rejected the assessee’s benchmarking methodology and applied a different method, whereas earlier Tribunal decisions had accepted the assessee’s approach based on LIBOR and rejected the TPO’s methodology. Following the earlier orders, the Tribunal upheld the CIT(A)’s relief.
The Tribunal also rejected the Revenue’s challenge regarding corporate guarantee commission. It noted that although the assessee argued that corporate guarantee was not an international transaction, the issue stood concluded by earlier Tribunal decisions following the jurisdictional High Court. Consistent with the Tribunal’s orders in the assessee’s own earlier years, the guarantee commission was directed to be restricted to 0.35%, and the Revenue’s grounds were dismissed.
