TaxTMI 
TaxTMI 
2022 (4) TMI 32
X X X X Extracts X X X X
X X X X Extracts X X X X
....12, whereby the Ld. PCIT set aside the assessment orders dated 15.05.2015 and 31.12.2015 passed u/s 143(3) and 154/143(3) of the Act respectively. 2. Brief facts of the case are that theAssessee company had filed its return of income by declaring "Nil" income on 30.11.2011 and paid the taxes u/s 115JB of the Act. The said return was processed u/s 143(1) of the Act and subsequently selected for scrutiny and the Assessing Officer completed the assessment of the Assessee by making addition of Rs. 15,94,27,269/- on account of upward adjustment in the arm"s length price and disallowance of Rs. 1,15,11,583/- on account of market to market losses. 2.1 Thereafter an order u/s 154 of the Act was also passed on 31.12.2015 by which the claim u/s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0/-. (iii) However, as per proviso to section 92C(4) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), no deduction under section 10A or 10AA or under chapter VI-A is to be allowed in respect of amount of income by which the total income of the assessee is enhanced as a result of computation of arm's length price. The error of allowing deduction of Rs. 15,94,27,269 on addition of Transfer Pricing adjustment resulted in underassessment of income of Rs. 14,38,31,829 as computed below: Profit before deduction u/s 10A: Rs. 16,21,37,440/- Addition on account of market to market loss: Rs. 1,15,11,583/- Rs. 17,36,49,023/- Addition on account of transfer pricing: Rs. 15,94,27,269/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....redthe reply of the Assessee, however, formed a view that various issues remained unverified, including the issues mentioned in the show cause notice and thus no proper inquiry was conducted by the Assessing Officer in the instant year on the above issues and, therefore, the impugned order held to be erroneous and prejudicial to the interests of the Revenue and consequently set aside the same. 4. The Assessee being aggrieved preferred the instant appeal. 5. Heard the parties and perused the material available on record. In this case return of income filed by the Assessee on dated 30.11.2011 by declaring "nil" income, which was processed u/s 143(1) of the Act and later on came into scrutiny and resulted into passing of assessment order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng adjustment resulted into under assessment of income of Rs. 14,38,31,829/- and such under assessment resulted into short levy of tax of Rs. 2,49,89,263/- under normal provisions including interest u/s 234B. 7. Heard the parties and perused the material available on record. It is the claim of the Assessee that the orders under Section 143(3) and 154 of the Act have been passed after holding appropriate verification and necessary enquiry and perusing the documents/details submitted before the AO during the assessment proceedings and therefore the case is not covered under Explanation 2(a) to Section 263 of the Act. As the orders passed by the AO are neither erroneous nor prejudicial to the interest of the revenue, hence the impugned orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... computer software and IT enabled service (refer page 147 of the PB). The Assessee vide letter dated 13.02.2015 also filed "note" on justification of deduction claimed u/s 10A of the Act (refer page 152 of the PB). Therefore, on the basis of documents as referred above, the Assessee claimed that the Assessing Officer thoroughly considered the claim of the Assessee by perusing the details anddocuments submitted and "note" on justification of the deductions claimed u/s 10A of the Act and hence the order passed u/s 163 is liable to be set aside. 8. On the contrary, the ld. DR claimed that basic condition of section 92C(4) has not been followed by the Assessing Officer. As per Section 92C(4) of the Act, no deduction is allowable in respect o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the provisions of law and therefore the orders passed by the AO cannot be attributable as erroneous and prejudicial to the interests of Revenue as per the provisions of Section 263 of the Act. 9.1 Even otherwise, it is not the case of the Revenue Department that the Assessing Officer has not done any inquiry and failed to verify the deduction as claimed by the Assessee, and therefore observation of the Ld. PCIT in para no. 6 of the impugned order, to the effects "Thus it is clear that no proper inquiry was conducted by the assessing officer in the instant year on the above issues. Therefore, the impugned assessment order was erroneous and prejudicial to the interests of revenue as per the provisions of Section 263 of the IT Act, 1961....