Pre-amendment reassessment limitation bars late notices under the preserved regime, invalidating consequential reassessment for affected earlier asses...
Cash-sales explanations for bank deposits require documentary reconciliation; reassessment notice survived where effective response time was available...
Functional comparability in transfer pricing prevents ad hoc arm's length adjustments where functions, assets, risks and reliable comparables are unes...
Contingency expenses, exempt-income disallowance, and royalty benchmarking: unsupported adjustments were deleted under consistent accounting and trans...
ITAT allowed the assessee's appeal regarding transfer pricing adjustments on two grounds. First, demurrage and detention charges of Rs. 2.57 crores constituted extraordinary costs and were non-operating in nature, given the exponential increase from previous years' charges of Rs. 1.5 lakhs to Rs. 4.05 lakhs on lower turnovers. Excluding these charges brought the operating profit/operating cost ratio to 1.35%, within the arm's length price tolerance limit of 1.78%. Second, no notional interest could be charged on outstanding receivables of Rs. 10.91 crores from local parties transacting on behalf of the associated enterprise, considering the assessee was debt-free and receivables remained unpaid, following established precedent regarding notional interest charges.
ITAT allowed the assessee's appeal regarding transfer pricing adjustments on two grounds. First, demurrage and detention charges of Rs. 2.57 crores constituted extraordinary costs and were non-operating in nature, given the exponential increase from previous years' charges of Rs. 1.5 lakhs to Rs. 4.05 lakhs on lower turnovers. Excluding these charges brought the operating profit/operating cost ratio to 1.35%, within the arm's length price tolerance limit of 1.78%. Second, no notional interest could be charged on outstanding receivables of Rs. 10.91 crores from local parties transacting on behalf of the associated enterprise, considering the assessee was debt-free and receivables remained unpaid, following established precedent regarding notional interest charges.
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TaxTMI 
TaxTMI 
of 4918 
