No Addition Warranted U/s 68 Once Taxpayer Has Discharged Identity & Credit-Worthiness Of Subscribers: Kolkata ITAT

The Kolkata ITAT reiterated that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then the AO is duty bound conduct to conduct an independent enquiry to verify the same.The Bench of Sanjay Garg (Judicial Member) and Manish Borad (Accountant Member) observed that “the assessee has successfully explained the nature and source of alleged sum and even the source of source has been proved by providing details...

No Penalty Is Leviable U/s 271(1)(C) If Bona Fide Mistake In Original Return Was Corrected By Revised Computation During Assessment: Mumbai ITAT

On finding that assessee had made bona fide mistakes in the computation of its total income while filing its original return, which were later corrected by filing revised computation during assessment proceedings, the Mumbai ITAT deleted the penalty levied u/s 271(1)(c) of the Income Tax Act.The Bench of the ITAT comprising of Sandeep Singh Karhail (Judicial Member) and Prashant Maharishi (Accountant Member) observed that, “the fact that the donation given was stated in the Tax Audit Report and...

No ALP On AMP Expense Is Warranted In Absence Of Agreement Between Assessee And Its AE For Service W.r.t Brand Promotion Activity: Chennai ITAT

The Chennai ITAT deleted the ALP adjustment made towards advertisement expenses (AMP expenses) for alleged brand enhancement for its AE by assessee manufacturing and selling cars in India as well as exporting them to its AEs and non-AEs abroad.The Bench comprising Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) on identical issue, noted that the Coordinate bench in assessee's own cases for AYs 2012-13 and 2016-17 deleted the adjustment holding that there was no formal...

Segregation Of Contract Manufacturing Activity And Distribution Is Fair And Reasonable: Mumbai ITAT

The Mumbai ITAT rejected the assessee's own recharacterization as value added distributor (VAD) and upheld the CUP method to benchmark import of Active Pharmaceutical Ingredients (APIs).The Bench comprising Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) observed that “segregation of Contract Manufacturing activity and Distribution is fair and reasonable. Merely for the reason that the assessee committed error in TP study to merge the two distinct segments under one head...

Depreciation Should Be Removed For Calculation Of Net Profit Margin And Cash PLI Is Justified Method: Kolkata ITAT

The Kolkata ITAT recently decided on comparables selection and adoption of Cash PLI in case of entity engaged in production of continuously annealed, cold-rolled steel / coils and sheets for automotive sector.The Bench comprising Dr. Manish Borad (Accountant Member) and Anikesh Banerjee (Judicial Member) observed that “The assessee stated that considering depreciation as a part of the total cost would not be appropriate for the purpose of benchmarking since the depreciation in the year under...

Time Barred Reference By AO To TPO By Giving Go Bye To Mandate Of Sec 92CA Is Clearly Erroneous: Mumbai ITAT Upholds Revision U/s 263

Finding that the AO had received the approval from the office of CIT well before the last date for passing of the TP order, but went in slumber and held on to himself the approval from CIT for more than six months, the Mumbai ITAT ruled that the reference made by Assessing Officer to the TPO was clearly time barred and invalid.The ITAT therefore upheld the CIT's invoking revisional jurisdiction u/s 263 in case of assessee for AY 2018-19. The Bench comprising Vikas Awasthy (Judicial Member) and...

Kolkata ITAT Directs TPO To Follow DRP's Directions With Respect To Aggregation Approach

The Kolkata ITAT remitted the case of ALP adjustment qua payment of Cylinder Rental Charges and import of Fixed Assets in case of assessee (engaged in manufacture, storage, and transmission of industrial gases as well as execution of turnkey cryogenic/gas engineering and project design requirements) for AY 2012-13.The Bench comprising Dr. Manish Borad (Accountant Member) and Mr. Anikesh Banerjee (Judicial Member) observed that “TPO should follow the direction of DRP and the issue of purchase of...

Delhi ITAT Deletes ALP Adjustment Qua Interest On Loan To AEs, Considering Tenure & Commercial Prudence

The Delhi ITAT deleted the ALP adjustment made on account of interest on loan extended to AE by assessee, engaged in manufacturing of Seamless, ERW Pipes and Tubes, and trading of Pipes and Tube.The Bench comprising Saktijit Dey (Vice President) and Dr. B.R.R. Kumar (Accountant Member) observed that “With regard to the guarantee in the agreement between Citibank, Singapore and JPSPL, it was submitted that JPSPL has obtained loan from Citibank, Singapore of around USD 2,90,00,000/-. No bank would...

Date Of Agreement Can't Be Construed As Date Of Sale Of Shares, For Purpose Of Computation Of Capital Gains: Mumbai ITAT

The Mumbai ITAT ruled that the date of the agreement by no stretch of imagination could be the date of sale of the shares by the assessee to the purchaser, for purpose of computation of capital gains.The Bench of Prashant Maharishi (Accountant Member) and Kavitha Rajagopal (Judicial Member) observed that “As per the decision of Bharti Gupta Ramola v. CIT [2012] 20 taxmann.com 762 the date of transfer is 30.06.2006 for computing the holding period of assets from both the date, i.e., of...

PCIT Cannot Enlarge Scope Of Limited Scrutiny By Invoking Sec 263: Chennai ITAT

Finding that the case of assessee was selected for limited scrutiny by the AO, the Chennai ITAT ruled that the PCIT cannot enlarge the scope of limited scrutiny u/s 263 of the Income tax Act.The Bench of V. Durga Rao (Judicial Member) and Manjunatha, G. (Accountant Member) observed that “it is not a fit case to invoke the provisions of section 263 of the Act and pass revision order, where the case of the assessee was picked up for limited scrutiny”. (Para 8)As per the brief facts of the case,...

Only Profit Element On Non-Genuine Purchases Merits To Be Disallowed And Not Entire Purchases: Mumbai ITAT

Referring to the decision of Bombay High Court in case of PCIT vs. Ram Builders (454 ITR 444), the Mumbai ITAT reiterated where assessee was involved in execution of civil works and it had shown purchases from twelve parties even if assessee failed to produce said parties for verification, then AO could not have treated entire purchases as non-genuine purchases but only profit element on such purchases.The Bench of Amit Shukla (Judicial Member) and Amarjit Singh (Accountant Member) observed that...

Date Of Satisfaction Note Is To Be Reckoned As Date Of Handing Over Material, For Initiation Of Proceedings U/s 153C: Delhi ITAT

Finding that the assessment year 2008-09 is beyond the period of six assessment years and respectfully following the decision of the jurisdictional High Court and the coordinate bench, the New Delhi ITAT held that the assessment made u/s 153C of Income tax Act for the AY 2008-09 is barred by limitation.The Bench of Challa Nagendra Prasad (Judicial Member) and Dr. BRR Kumar (Accountant Member) observed that “in the absence of mentioning the date of handing over of the materials the date of...