IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER &

SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 1875/KOL/2024 Assessment Year: 2020-21 M/s. Tega Industries Limited D.C.I.T., Circle -11(1), Vs. Kolkata (Appellant) (Respondent)

PAN: AABCT2074M Appearances:

Assessee represented by : Ketan Ved AR.

Department represented by : Subrata Aich, Sr. DR.

Date of concluding the hearing : 12-September-2025 Date of pronouncing the order : 11-December-2025

ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Assessing Officer (hereinafter referred to as Ld. 'AO') passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2020-21 dated 24.07.2024, which has been passed as per the directions of the Dispute Resolution Panel-2, New Delhi u/s 144C(5) of the Act, dated 11.06.2024.

2. The assessee is in appeal raising the following grounds of appeal:

“1. Order bad in law and on facts

1.1. That the assessment order passed by the Ld. Assessing Officer ('Ld. AO') under Section 143(3) r.w.s. 144C(13) read with Section 1448 of the Act and read with the order passed by the Ld. Transfer Pricing Officer ('TPO'), under section 92CA(3) read with section 144C(5) of the Act is bad in law and void ab-initio.

1.2. That the Hon'ble DRP erred in not holding that the order of Ld. TPO and the draft order of the Ld. AO (in so far it relates to transfer pricing proceedings) are void-ab-Initio as the conditions of section 92C(3) of the Act have not been satisfied.

2. Determination of arm's length price by the Ld. TPO, Ld. AO and Hon'ble DRP for Corporate guarantee commission received by the Appellant

2.1. That the Ld. TPO /Ld. AO/ Hon'ble DRP erred in not appreciating the fact that the issuance of corporate guarantee is not an international transaction as per section 92B of the Act without individually appreciating the facts in each case.

2.2. On the facts and circumstances of the case and in law, the Ld. TPO, Ld. AO and Hon'ble DRP erred in making an adjustment of INR 12,00,057/- in relation to issuance of corporate guarantee on behalf of Tega Holdings Pte. Ltd ('Tega Singapore'), and in doing so, have grossly erred by amongst other things:

2.2.1. Not appreciating the fact that the provision of guarantee is essentially in the nature of shareholder activity and should be construed as passive support to its associated enterprises ('AEs') in the ordinary course of its business.

2.2.2. Not giving due cognizance to the order pronounced by the Hon'ble Kolkata ITAT in the Appellant's own case for AY 2008-09 to AY 2013-14, wherein the jurisdictional ITAT has held that if the expectation of the Appellant from provision of guarantee is not of a guarantor, but of a shareholder then the provision of guarantee cannot be treated as providing service and should be regarded as shareholder activity.

2.2.3. Not giving due cognizance to the order passed by the Ld. Commissioner of Income Tax Appeals [Ld. CIT(A)) for AY 2011-12, wherein the Ld. CIT(A) had perused the facts of the said transaction and concluded the same as shareholder function which was later upheld by the Hon'ble Kolkata ITAT in Appellant's own case (ITA NO. 1047,1048 &

1049/Kol/2017).

2.2.4. Applying an arbitrary approach to benchmark the corporate guarantee transaction by erroneously using Comparable Uncontrolled Price ("CUP") method as the most appropriate transfer pricing method, although the said method applied is not in accordance with the first proviso to section 92C (2) of Act and Rule 10B (1) (a) of the Income-tax Rules, 1962 ("the Rules");

2.3. On the facts and circumstances of the case and in law, the Ld. TPO, Ld. AO and Hon'ble DRP erred in making an adjustment of INR 9,88,849/- in relation to issuance of corporate guarantee on behalf of Tega Industries Chile SpA (Tega Chile'), and in doing so, have grossly erred by amongst other things:

2.3.1. Applying an