PICO Deepali Overlays Consortium Vs DCIT (ITAT Delhi)
CWG Consortium Gets Major Relief: Cash & Jewellery Not Found at AOP Premises, Bogus Purchases & TP Additions All Quashed
Assessee, an unincorporated AOP formed for execution of Commonwealth Games 2010 overlay contracts, faced multiple additions pursuant to search assessments u/s 153A r.w.s. 254 & 144C, including addition u/s 69A for cash & jewellery seized, disallowance of alleged bogus purchases, blanket disallowance of expenses, & substantial transfer-pricing adjustments by treating intra-group services at NIL value.
Tribunal held that cash & jewellery were seized from premises not belonging to AOP but to third parties or individual members, & therefore addition u/s 69A in hands of AOP was unsustainable. It further held that purchases from Vijay Iron Works, Armstrong Wires & Kirti Enterprises could not be branded as bogus where payments were made through banking channels, transactions stood examined in arbitral proceedings, & no contrary material was confronted. Blanket disallowance of expenses was deleted noting that payments were through cheques with TDS deduction & entire contract receipts were already offered to tax in AOP’s hands. On transfer pricing, Tribunal found that AO/TPO ignored remand directions, wrongly rejected TNMM, applied CUP without comparables & mechanically determined ALP at NIL despite evidence of services rendered by PICO Hong Kong; TP additions were therefore deleted in full. Tribunal also reiterated that income of AOP must be taxed in AOP’s hands & not duplicated in hands of members. Consequently, all major additions were set aside & both appeals were allowed in favour of Assessee.
