2023 (7) TMI 845

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....19.2022 passed for Assessment Years 2015-16 & 2016-17. 2. The Department has taken the following grounds of appeal in ITA No. 564/Ahd/2022(A.Y. 2015-16):- "1. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is justified in deleting the addition of Rs. 73,24,47,597/- made by way of taxing the entire profit of Rubamin FZC situated in UAE in the hands of the assessee by treating Rubamin FZC as a colourable device/shell entity created solely for the purpose of shifting of its profits out of India? 4. The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal." 3. The Department has taken the following grounds of appeal ....

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....der for A.Y. 2014-15. Accordingly, the assessee was requested to show cause why addition on the same issue not be made in current year i.e. A.Y. 2015-16 as well, by treating the entire profits of M/s. Rubamin FZC, UAE as income in the hands of the assessee. Accordingly, following the order for the earlier assessment year, the Assessing Officer held that RFZC, UAE is a paper company carrying out no activity except for recording purchase and sales of the transactions on papers. Thus, the Assessing Officer treated the entire profit of RFZC, UAE amounting to Rs. 73,24,47,597/- for the year under consideration, as profit belonging to the assessee and added the same to the total income of the assessee. 5. In appeal, Ld. CIT(Appeals) allowed th....

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....d. We observe that this issue has been decided in favour of the assessee by ITAT, Ahmedabad in IT(SS)A No. 20,21,22/Ahd/2018 & ITA No. 1291/Ahd/2018 for A.Ys. 2011-12 to 2013-14 & 2014-15, wherein the ITAT has made the following observations while allowing the appeal of the assessee:- "63. The third aspect/question arises whether the profit shown by the RFZC belongs to the assessee. Admittedly the profit earn by RFZC was predominantly on account of the import from the DRC which was sold to one party based in China. Thus the transaction among the parties based outside India. Accordingly, we are of the view that such profit cannot be attributed to the assessee merely on the reasoning that the assessee is the holding company as well a....

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....ions carried out by it with the company based in China namely Trafigura Beheer BV belongs to DRC companies. Likewise, the profit attributable to RFZC with respect to the transactions carried out by it with the assessee company has already been subject to transfer pricing provisions. Therefore, no inference can be drawn that the profit of the assessee company got diverted. Hence the ground of appeal of the assessee is allowed. 66. The next issue raised by the assessee in ground No. 8 and 9 is that the learned DRP erred in confirming the order of the AO by not allowing the deduction of the loss of _ 1,50,87623/- for the reason that it was not crystallized in the year under consideration." 8. Since ITAT Ahmedabad in assessee's own ....