TaxTMI 
TaxTMI 
2025 (11) TMI 1894
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....not as per the method prescribed under Rule 110A of the IT Rules." 3. Revenue is aggrieved by the order of the Ld. CIT(A) deleting the addition made on protective basis in the hands of the assessee for an amount of Rs. 50 Crores made u/s.56(2)(vii)(b) of the Act. The assessee during the impugned year had received share application money amounting to Rs. 62.50 Crores. The said share application money was received in lieu of 1,25,00,000 shares issued in subsequent year at a premium of Rs. 40/- per share. The AO found the assessee to have not justified the premium received and accordingly invoked the provisions of Section 56(2)(vii)(b) of the Act for making addition of excess amount received in comparison to the Fair Market Value ('FMV') of the shares, to the income of the assessee. However, noting that the shares were issued only in the subsequent year, he held that the substantive addition is to be made in the succeeding year and made protective addition in the impugned year. The Ld. CIT(A) noted that in the succeeding year the ITAT had deleted the addition made on substantive basis on merits itself and accordingly, he found no case for confirming the addition made on protecti....
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....ic Transaction ('SDT') entered into by the assessee with its Associate Enterprise. The quantum of adjustment so made being Rs. 2.38 Crores and the nature of transaction with the Associate Enterprise being reimbursement of expenses. 7. The orders of the authorities below reveal that the assessee had reported SDT of reimbursement of expenses with its related party Mytrah Energy (India) Private Limited ('MEIPL') to the tune of Rs. 2,83,00,139/- in Form 3CEB, audit report, benchmarking the transaction using the Comparable Uncontrolled Price ('CUP') method. The assessee had explained the nature of transaction contending that MEIPL was incorporated on 12th November, 2019 and its principal activity was to generate and sell electricity from wind energy farms by itself and through its subsidiaries and engaged itself in wind farm development and infrastructure maintenance services to its group entities. It was explained that generally for setting up of any wind/solar based projects MEIPL floats a Special Purpose Vehicle ('SPV') and the respective project was housed in the said SPV. The purpose being to satisfy the lenders requirements since housing separate projects in separate SPVs resul....
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....ch has resulted in more than ordinary profits to an eligible business to which 80IA or Section 10AA of the Act is applicable. He, accordingly, rejected the contention of the assessee that the impugned transaction was not a SDT as per Section 92BA of the Act. He further found that allocation of expenses based on adopted allocation key i.e. the project capacity, failed the benefit test since he found the assessee to have derived no benefit from the same. He found that the allocation key i.e. project capacity was Nil and noting that the assessee had failed to explain how the reimbursement of expenses was wholly and exclusively connected with his business, he benchmarked the transaction at Nil. Accordingly, TP adjustment of Rs. 2.83 Crores was made to the income of the assessee by adding the same to the income of the assessee. 8. The Ld. CIT(A), however, noted that the TPO's disqualification of the expenditure stating the same to have not resulted in any benefit to the assessee was not correct since he found that the TPO had found no defect or fault either in the calculation of total cost or apportioning of the same between the parties. He noted that the assessee had submitted all d....
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.... impugned amount has not been debited to the P&L account but has been capitalized as capital work-in-progress. The above facts are not disputed. The transactions qualifying as SDT in law are listed in Section 92BA of the Act which is reproduced hereunder: "Meaning of specified domestic transaction. 92BA. For the purposes of this section and sections 92, 92C, 92D and 92E, "specified domestic transaction" in case of an assessee means any of the following transactions, not being an international transaction, namely:- (i) [***] (ii) any transaction referred to in section 80A; (iii) any transfer of goods or services referred to in sub-section (8) of section 80IA; (iv) any business transacted between the assessee and other person as referred to in sub-section (10) of section 80IA; (v) any transaction, referred to in any other section under Chapter VI-A or section 10AA, to which provisions of sub-section (8) or sub-section (10) of section 80IA are applicable; or (va) any business transacted between the persons referred to in sub-section (6) of section 115BAB; ^5[(vb) any business transacted between the ass....