The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has provided Bharti Airtel relief of Rs 57.39 billion on its taxable income.

While providing the relief, ITAT has stated that the corporate guarantees given to banks on behalf of Bharti Airtel group companies are not an international transaction and a transfer pricing adjustment cannot be made.

Earlier, Bharti Airtel had incurred a loss of Rs 57.39 billion on transfer of telecom infrastructure to Bharti Infratel Limited. A capital loss, the company did not claim it as a deduction in its tax return for the assessment year 2008-09. However, the amount was added back to the income of Bharti Airtel by the tax authorities during subsequent tax assessment, leading to company’s income being taxed twice. The operator filed an appeal against tax authorities with ITAT.

According to tribunal, there was no effective debit to the profit and loss account of the company. The loss worth Rs 57.39 billion was squared up against the credit of an equivalent amount, representing amount withdrawn from reserve for business structuring. The accounting entries passed were profit neutral and no adjustment was required.