ITAT deletes Adjustment on Guarantee Fee Payment, Upholds Judicial Consistency

The ITAT Delhi bench deleted an adjustment made by the TPO on the payment of a guarantee fee by PepsiCo India Holdings Pvt. Ltd. to its associated enterprises. The TPO had initially made the adjustment citing a higher guarantee fee rate. However, ITAT ruled in favor of PepsiCo, citing judicial consistency and adherence to the principles established in previous judgments. The decision emphasizes that the guarantee fee rates should be in line with the judicial precedents and that arbitrary adjustments by the TPO are not permissible. The ruling underscores the importance of consistency and fairness in transfer pricing adjustments and reaffirms the application of established judicial principles in such matters.