The Delhi Income-tax Appellate Tribunal has ruled on transfer pricing (TP) issues in relation to the issuance of a guarantee, providing loans in foreign currencies, and contributions to share capital with a delayed allotment of shares. Details of each are as follows.
Issuance of a guarantee
The Indian taxpayer issued a guarantee to a third party on behalf of its foreign subsidiary. No fee was charged by the taxpayer because no costs were incurred. As a result, the tax authorities imputed a arm's…