Noida Towers Private Limited Vs Assessment Unit (ITAT Delhi)
No Double Disallowance of Interest & Late Form 10-IC Not Fatal: ITAT Delhi Grants TP Relief and Concessional Tax Rate
The Delhi ITAT partly allowed the assessee’s appeal, holding that once the entire interest paid on non-convertible debentures (NCDs) to the Associated Enterprise had already been suo motu disallowed under Section 94B and added back in the computation, any further transfer pricing adjustment on the same amount would amount to impermissible double taxation. Since the assessee had not claimed the interest as a deduction and had paid tax thereon, the Tribunal deleted the TP adjustment of ₹1.60 crore, rejecting the Revenue’s contention that the interest might be carried forward or claimed in subsequent years.
On the issue of concessional tax rate, the Tribunal held that delay in filing Form 10-IC for opting Section 115BAA was only a procedural lapse. Considering the Covid-19 extensions granted by the Supreme Court and the fact that the form was filed before the extended outer limit, the assessee’s substantive right to claim the concessional rate could not be denied. Accordingly, the benefit of the lower tax rate under Section 115BAA was allowed. Interest computation was directed to be consequential, while penalty initiation was held to be premature. The appeal was thus partly allowed with significant relief to the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
