Section 97(1)(b): Arrangements with Round Tripping or Disguised Funds Lack Commercial Substance, May Face GAAR Adjustments.

An arrangement is deemed to lack commercial substance under Section 97(1)(b) if it includes round tripping of funds, accommodating parties, offsetting elements, or disguises the value, source, or location of funds. Round trip financing involves transactions that primarily aim to obtain tax benefits without substantial commercial purpose. An accommodating party is one whose main role in the arrangement is to secure a tax benefit for the taxpayer. If an arrangement disguises fund sources or involves offsetting elements, it also lacks commercial substance. Such arrangements may be disregarded, and tax implications adjusted accordingly, potentially invoking GAAR provisions.