Penalty for estimation of income and disallowances for tax non-deduction clarified: estimation-based penalties not sustainable; additions without conc...
Managerial remuneration disallowance under s.40A(2)(b) challenged over alleged tax-avoidance; appellate decision restored deletion of addition for dir...
Classification of imported goods as electronic cigarette versus tobacco product reversed for lack of proof; order set aside for jurisdictional overrea...
The ITAT held that no transfer pricing adjustment could be made on interest-free loans advanced to associated enterprises where the assessee had not commenced business, had capitalised all expenditure as work-in-progress, and had earned no income during the year. On those facts, there was no factual basis to infer profit shifting from the assessee to its holding company or group entities, and the proposed interest imputation under transfer pricing principles was unsustainable. The Tribunal also accepted that the related contention on specified domestic transaction treatment was covered by the same reasoning. The transfer pricing adjustment was deleted and the appeal was allowed.
The ITAT held that no transfer pricing adjustment could be made on interest-free loans advanced to associated enterprises where the assessee had not commenced business, had capitalised all expenditure as work-in-progress, and had earned no income during the year. On those facts, there was no factual basis to infer profit shifting from the assessee to its holding company or group entities, and the proposed interest imputation under transfer pricing principles was unsustainable. The Tribunal also accepted that the related contention on specified domestic transaction treatment was covered by the same reasoning. The transfer pricing adjustment was deleted and the appeal was allowed.
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