Issuance of Letter of Comfort to banker of AE doesn’t constitute international transaction u/s. 92B: ITAT Mumbai

Tata International Ltd. Vs ACIT (ITAT Mumbai) ITAT Mumbai held that there is a fundamental gap between guarantee and Letter of Comfort. Guarantee is a legally enforceable; however, Letter of Comfort is not. Thus, issuing Letter of Comfort to the Bankers of AE, the assessee did not incurred any cost and hence it does not constitute international transaction under section 92B of the Act Facts- Appellant alleges the transfer pricing adjustment made with respect to the Letter of Comfort issued by the Appellant. As per TPO, the transaction of providing Letter of Comfort would fall within the ambit ...