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No TP adjustment if there was no risk involved in issuing performance guarantee on behalf of AE

September 7, 2019[2019] 108 taxmann.com 172 (Mumbai - Trib.)
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TRANSFER PRICING : Where assessee did not charge commission for providing performance guarantee on behalf of its AE, in view of fact that once said guarantee was invoked, assessee would execute contract by using its own infrastructure and in turn would be eligible for entire contractual revenue and profit arising therefrom, it could be concluded that there was no risk involved in giving said guarantee and, thus, no addition could be made to ALP by charging notional commission on performance guarantee

TRANSFER PRICING : Where assessee charged commission at rate of 0.93 per cent on bank guarantee furnished on behalf of AE, since there was absolutely no loss to assessee and no bearing on profits or losses as entire cost of 0.93 per cent had been duly recovered by assessee from its AE, no further adjustment to ALP was required in respect of guarantee commission transaction

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