The Tribunal ruled that inclusion of giant companies distorted arm’s length results for a small captive service provider. High-turnover companies were excluded to ensure meaningful comparability.
ITAT Delhi held that foreign company receiving consideration for offshore supply of equipment, plant, designs and drawings is not taxable in India since entire transaction has taken place outside India.
The ruling declares reassessment void where notices were not issued through the faceless mechanism post-29.03.2022. Lesson: non-compliance with section 151A vitiates reopening.
The tribunal held that the reassessment notice issued by relying on COVID-era extensions was invalid due to procedural lapses. As a result, the entire reassessment and addition were set aside.
The Tribunal held that where sales are accepted and purchases are supported by documents, the entire purchase value cannot be added as bogus. Only the embedded profit element can be taxed, not the full expenditure.
The issue concerns high-pitched additions proposed under faceless scrutiny even where agricultural income is exempt and fully documented. The key takeaway is the need for evidence-based verification before adverse action.
The Tribunal held that merely treating a claimed business loss as a speculative loss amounts to a change in head of loss, not under-reporting of income. Penalty under Section 270A was deleted as there was no concealment or furnishing of inaccurate particulars.
The Court ruled that “sufficient cause” must explain the entire limitation period, not just post-expiry delay. Negligence or inaction, including by government bodies, cannot justify condonation.
The case addressed the legality of reopening an assessment when the notice was not issued through NFAC. Following jurisdictional High Court rulings, the Tribunal ruled that such deviation vitiates the entire reassessment process.
Delhi High Court held that the disallowance under Section 14A of the Income Tax Act is to be restricted to the exempted income. Amendment to section 14A in terms of Finance Act, 2022 is prospective in nature. Accordingly, appeal of revenue dismissed.
