ACIT Vs Escorts Ltd. (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal considered cross appeals filed by the Revenue and M/s. Escorts Ltd. for Assessment Year 2009-10 against the order dated 31.10.2017 of the Commissioner of Income-tax (Appeals)-44, New Delhi. The Tribunal comprised Shri O.P. Kant, Accountant Member and Ms. Suchitra Kamble, Judicial Member. The appeals were heard on 15.03.2021 and the order was pronounced on 19.03.2021.
The assessee was engaged in manufacturing and sale of tractors, shockers, railway equipment and other trading activities. For the relevant year, it filed its return declaring nil income under the regular provisions of the Income-tax Act, 1961 and book profit of ₹27,77,81,818 under Section 115JB. During scrutiny, international transactions with Associated Enterprises were noticed and referred to the Transfer Pricing Officer. The TPO proposed an addition of ₹1.55 crore. The Assessing Officer thereafter passed a draft assessment order proposing, among other additions, a transfer pricing addition of ₹1.55 crore and royalty expenditure disallowance of ₹1.39 crore. As the assessee did not file objections before the DRP within the prescribed period, the assessment order was passed determining total income at ₹3,01,58,760 under the normal provisions. The CIT(A) partly allowed the assessee’s appeal.
