https://www.taxtmi.com/caselaws?id=445063 Gujarat HC held that penalty under Section 271(1)(c) was not applicable in a transfer pricing case involving base erosion theory. The court found divergent tribunal opinions on arm's length pricing adjustments, making the issue debatable. Since multiple interpretations existed regarding base erosion and the assessee acted in good faith, Explanation 7 could not be applied mechanically without evidence of concealment or inaccurate particulars. The court emphasized that penalty provisions require independent consideration beyond quantum additions and cannot be imposed routinely in transfer pricing disputes where legal positions are genuinely debatable. en-us Thu, 26 Oct 2023 00:00:00 +0530 Sun, 29 Oct 2023 22:25:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=445063 Gujarat HC held that penalty under Section 271(1)(c) was not applicable in a transfer pricing case involving base erosion theory. The court found divergent tribunal opinions on arm's length pricing adjustments, making the issue debatable. Since multiple interpretations existed regarding base erosion and the assessee acted in good faith, Explanation 7 could not be applied mechanically without evidence of concealment or inaccurate particulars. The court emphasized that penalty provisions require independent consideration beyond quantum additions and cannot be imposed routinely in transfer pricing disputes where legal positions are genuinely debatable. Case-Laws Income Tax Thu, 26 Oct 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=445063