DCIT Vs Havells India Ltd (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, dismissed the appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) dated April 7, 2025 for Assessment Year 2010–11. The assessment order had originally been passed under Section 143(3) read with Section 144C(1) of the Income Tax Act. The Revenue raised multiple grounds relating to transfer pricing adjustment on corporate guarantee, disallowance of provision under the “Shahenshah Scheme,” and denial of deduction under Section 80IC on interest income.
With respect to the first set of grounds relating to corporate guarantee provided by the assessee to its associated enterprises, the Revenue challenged the decision of the CIT(A) restricting the transfer pricing adjustment to 0.5 percent instead of the higher rate determined by the Transfer Pricing Officer. The assessee submitted that the issue had already been decided in its favour by the Tribunal in earlier assessment years. In those proceedings, the Tribunal had directed that the adjustment in respect of corporate guarantees be determined at 0.5 percent. After examining the earlier decision of the Tribunal in the assessee’s own case for Assessment Year 2014–15 and other years, the Bench noted that the CIT(A) had followed the same precedent while restricting the rate of adjustment. Since the issue had already been decided in the assessee’s favour in earlier years and no contrary decision was placed before the Tribunal, it found no infirmity in the order of the CIT(A). Accordingly, the grounds raised by the Revenue on the corporate guarantee issue were rejected.
