Corporate guarantee provided to associated enterprises is not an international transaction

Four Soft Limited Vs. DCIT (ITAT Hyderabad)- Interest rate for providing loans -Tribunal held that ALP as regards foreign currency loans is to be determined on international loan and not for the domestic loan and hence corporate bonds cannot be taken for comparability. The Tribunal further held that LIBOR is an internationally well recognised rate for bench-marking loans denominated in foreign currency. The Tribunal also relied on the case of Siva Industries and Holdings Limited. Corporate Guarantee to banks on behalf of subsidiaries – The Tribunal held that corporate guarantee given by...