Transfer pricing comparables and adjustments: Tribunal revisits loss-maker status, segmental comparability, working capital relief, and risk allocatio...
Business expenditure disallowance failed where commission, related-party salary and promotion payments were supported by records and inquiry was inade...
Section 68 was held inapplicable to an addition computed by reducing actual interest on unsecured loans to a benchmark 12% and treating the differential as unexplained income. The tribunal found no fresh credit entry or unidentified creditor; lenders were known, payments routed through banking channels, and the dispute concerned reasonableness of interest - an allowability issue, not an unexplained cash credit. The Assessing Officer's substitution of a benchmark rate and mechanical addition was unsustainable. The correct remedial route is assessment of disallowable interest by adjusting capitalised interest into work in progress and recomputing taxable income. Addition under section 68 deleted and appeal allowed.
Section 68 was held inapplicable to an addition computed by reducing actual interest on unsecured loans to a benchmark 12% and treating the differential as unexplained income. The tribunal found no fresh credit entry or unidentified creditor; lenders were known, payments routed through banking channels, and the dispute concerned reasonableness of interest - an allowability issue, not an unexplained cash credit. The Assessing Officer's substitution of a benchmark rate and mechanical addition was unsustainable. The correct remedial route is assessment of disallowable interest by adjusting capitalised interest into work in progress and recomputing taxable income. Addition under section 68 deleted and appeal allowed.
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