Australia and New Zealand Banking Group Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that rejecting Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM) for benchmarking guarantee fee is not justifiable since assessee doesn’t undertake any risk of profit or loss on the said transaction.
Facts- Assessee is a commercial bank having its head office in Melbourne, Australia. Australia and New Zealand Banking Group (ANZ) commenced its banking operations in India with the opening of its first branch in Mumbai pursuant to the receipt of the banking license from Reserve Bank of India (RBI). During the relevant year, ANZ has a branch in India operating in Mumbai. It is involved in normal banking activities including financing of foreign trade and foreign exchange transactions.
Ground raised by the assessee is with regard to determination of Arm’s Length Price (ALP) of the international transaction relating to processing fees received on account of guarantees issued to Indian companies based on counter guarantee from overseas branches. Another ground raised by the assessee is on challenging the rejection of Transactional Net Margin Method (TNMM) used by the assessee and adopting external Comparable Uncontrolled Price (CUP) method as the Most Appropriate Method (MAM).
