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ThynkTax /Tax Reference /Case Laws /Bharti Airtel - Corporate guarantee

Bharti Airtel - Corporate guarantee

High Court·2014·ITR
Facts

Bharti Airtel issued corporate guarantees for foreign subsidiaries.

Issue

Is a corporate guarantee an "international transaction" requiring transfer pricing adjustment?

Held

Yes, it is an international transaction within the meaning of Section 92B; ALP must be determined.

Ratio

Corporate guarantees are international transactions even where no direct cost is incurred, but ALP must reflect risk.

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