Case Law Details
Global E-Business Operations Private Limited Vs DCIT (ITAT Bangalore)
ITAT Bangalore held that as per provisions of section 43B(f) of the Income Tax Act deduction on leave encashment is available on actual payment basis and not available on accrual basis.
Facts-
During the course of assessment proceedings, it was noticed that the assessee had entered into several international transactions with its Associate Enterprises (AEs). AO referred the matter to the TPO to determine the Arm’s Length Price (ALP) of the international transactions undertaken by the assessee with its AEs. TPO passed an order u/s 92CA of the I.T.Act on 24.10.2019 suggesting the transfer pricing adjustment of Rs.64,81,44,230 in respect of the international transactions entered by the assessee with its AEs during the previous year. The draft assessment order was passed on 16.12.2019 incorporating the above transfer pricing adjustment suggested by the TPO and also making corporate tax addition to the extent of Rs.7,28,99,000 (disallowance u/s 37 of the I.T.Act).
Aggrieved by the draft assessment order, the assessee filed objections before the Dispute Resolution Panel (DRP). The DRP vide order dated 25.02.2021 granted partial relief to the assessee, whereby the transfer pricing adjustment was reduced to Rs.30,29,80,250. The DRP, however, confirmed the A.O.’s view on corporate tax disallowance. Pursuant to the DRP’s directions, the impugned final assessment order was passed on 30.03.2021. Being aggrieved, the present appeal is filed.
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