Nussli Switzerland Ltd. Vs ACIT (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal allowed the appeal of Nussli Switzerland Ltd. for Assessment Year 2011-12 by holding that the mandatory prior approval under section 153D of the Income-tax Act, 1961 was mechanical and demonstrated total non-application of mind. The appeal arose from the order dated 29.12.2017 of the CIT(A)-43, New Delhi, relating to an assessment order dated 30.05.2014 passed under section 144C read with sections 153A/143(3). The assessee had filed its return on 30.09.2011 declaring a loss of Rs.12,68,46,434/-. A search and seizure operation had been conducted on 19.10.2010. The assessee was one of the contracted parties engaged in work relating to development of sports venues for the Commonwealth Games held in Delhi in October 2010. Based upon enquiries and documents found and seized during the search, the Assessing Officer ultimately determined total income at Rs.432,19,54,890/-, which also included a transfer pricing adjustment under section 92CA.
The assessee had raised numerous substantive grounds challenging, inter alia, additions under section 69C, disallowances under section 37, the transfer pricing adjustment, rejection of the books of account and charging of interest under sections 234B, 234C and 234D. By way of additional grounds, however, the assessee challenged the assessment itself on the ground that requisite valid prior approval under section 153D had not been obtained and that the purported approval, if any, was mechanical and without application of mind. Since this issue went to the root of the assessment, the assessee requested that it be adjudicated before the other grounds.
