Mitsui Prime Advanced Composites India Private Limited Vs ITO (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT), Delhi Bench, arose from the assessment order dated 31.03.2021 passed by the Assessing Officer/National E-Assessment Centre under Sections 143(3), 144C(13), 143(3A), and 143(3B) of the Income-tax Act for Assessment Year 2016-17. The assessee challenged the assessment order passed pursuant to the directions issued by the Dispute Resolution Panel (DRP).
The assessee had filed its return of income declaring nil income on 30.11.2016. The case was selected for complete scrutiny on multiple issues, including tax treatment of investments, advances and loans, reporting of international transactions in Form 3CEB, taxation of foreign remittances, admissibility of business loss deductions, genuineness of share capital, expenditure relating to penalties or fines, correctness of sales turnover disclosures, deductions claimed against business income, and compliance relating to outward foreign remittances.
The assessee was engaged in the business of manufacturing, trading and exporting polypropylene compounds and polyolefin compounds. Since the assessee had entered into international transactions with its associated enterprises, the matter was referred to the Transfer Pricing Officer (TPO) under Section 92CA(3) of the Act. The TPO passed an order proposing transfer pricing adjustments amounting to ₹1,99,32,839. Based on the TPO’s findings, a draft assessment order was issued. The assessee filed objections before the DRP, which were disposed of on 11.09.2020. Thereafter, the Assessing Officer passed the final assessment order making a transfer pricing adjustment of ₹1,81,74,359.
