Bank Rates Not Comparable: ITAT Upholds 0.25% Corporate Guarantee Benchmark

SRF Limited Vs ACIT (ITAT Delhi) Corporate guarantee @ 0.25% upheld; 14A interest disallowance & MAT add-back quashed; CER receipts held capital — ITAT Delhi in SRF Ltd Delhi Tribunal largely allowed Assessee’s appeals, following its own consistent precedents. On corporate guarantee, Tribunal held that guarantee fee @ 0.25% charged to wholly-owned AEs is at arm’s length, rejecting higher rates adopted by TPO/DRP. Tribunal reiterated that bank guarantee rates are not valid CUPs for corporate guarantees and that specific bank quotations obtained by Assessee constitute reliable comparab...