IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, HON'BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 7487/MUM/2018 Assessment Year: 2014-15 Australia and New Zealand Deputy Commissioner of Banking Group Ltd. Income-tax – 1(1)(2), Unit A, Sixth Floor, Mumbai Cnergy Centre, Appasaheb Marathe Marg, Vs.

Prabhadevi, Mumbai – 400 025 (PAN : AAICA3008P)

(Appellant) (Respondent)

Present for:

Assessee : Shri Madhur Agrawal, Advocate Revenue : Shri Annavaram K., Sr. DR Date of Hearing : 14.11.2025 Date of Pronouncement : 12.02.2026

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the final assessment order passed pursuant to the directions of the Dispute Resolution Panel-1, Mumbai, (DRP) vide order dated 04.09.2018 u/s. 144C(5) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), for Assessment Year 2014-15.

2. Grounds taken by the assessee are reproduced as under:

Ground 1: Determination of the 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

On the facts and in the circumstances of the case and in law, the learned AO, based on the directions of the Hon'ble DRP, erred in making a transfer pricing adjustment of Rs 56,31,605, by re-computing the ALP of the international transaction undertaken by Australia and New Zealand Banking Group Limited, Mumbai Branch (ANZ Mumbai) relating to processing fees received on account of guarantees issued by ANZ Mumbai to Indian beneficiaries [based on the corresponding back to back guarantee provided by the overseas associated enterprises (AE's)].

Ground 2: Rejecting the Transactional Net Margin Method (TNMM) used by the Appellant and adopting External Comparable Uncontrolled Price (CUP) method as the most appropriate method On the facts and in the circumstances of the case and in law, the learned AO. based on the directions of the Hon'ble DRP, erred in determining the ALP of the international transaction undertaken by ANZ Mumbai relating to processing fees received on account of guarantees issued by ANZ Mumbai to Indian beneficiaries (based on the back to back guarantee provided by the overseas AEs) on account of the following:

a) In rejecting the TNMM used by the Appellant without appreciating that the Appellant provides administrative support services, by issuing local guarantees based on the instructions and counter guarantee received from the AE, without undertaking risk on the overseas third party requesting the guarantee.

b) In adopting external CUP method as the most appropriate method to determine the ALP of the international transaction, by using information received/collected from third party Indian banks under section 133(6), and without any comparability analysis concluding that the functions performed, assets used and risks undertaken by ANZ Mumbai are comparable with the activities carried on by the banking companies from whom data was collected by the AO under section 133(6).

c) Without prejudice to the above, in concluding that the Appellant should have charged 0.53% of the guarantee amount without any cogent and reasonable comparability exercise prescribed under Rule 10B of the Income-tax Rules, 1961 read with Section 92C of the Income-tax Act, 1961.

Ground 3: Determination of the ALP of the international transaction relating to marketing support services provided by ANZ Mumbai to its AEs in respect of derivative products On the facts and in the circumstances of the case and in law, the learned AO. based on the directions of the Hon'ble DRP, erred in making the transfer pricing adjustment of Rs 63,93,140, by re-computing the ALP of the international transaction undertaken by ANZ Mumbai relating to marketing support services provided by ANZ Mumbai to its AEs in respect of derivative products.

Ground 4: Rejecting the Transactional Net Margin Method