Payment of guarantee fees to holding company for loan advanced to third party is deductible u/s. 37

DCIT Vs Rabo India Finance Ltd (ITAT Mumbai)

ITAT Mumbai held that guarantee fees paid to holding company for loan advanced by assessee to third party is commercial/ business expediency and hence allowable as deduction under Section 37 of the Income Tax Act.

Facts- RIFL (assessee) had given a loan to third party ‘Noble Grain/Sidharth Soya’ and for the said loan, Rabobank Hong Kong had provided a guarantee that in case of default by the borrower entity. RIFL would recov

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