TaxTMI 
TaxTMI 
2026 (1) TMI 1632
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....ts appeal for AY 2009-10 in ITA No. 4353/M/2025 has raised following grounds of appeal:- "On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the TP adjustment made by the TPO after computing the ALP of the transaction done by the assessee with its AE without appreciating the fact that the DRI authorities are not competent to compute ALP to prevent base erosion and profit shifting." 2. On receipt of memorandum of appeal the assessee has filed its CO by raising following grounds of appeal:- "1. The CIT(A) ought to have held that the reopening of assessment u/s. 147 of the Act is illegal and bad in law. 2. The CIT(A) ought to have held that the specific objections raised by the assessee was not disposed of by the Assessing Officer thereby, rendering the entire assessment proceeding illegal and bad in law. 3. The CIT(A) ought to have held that the prior approval for issue of notice u/s, 148 of the Act was not obtained by the Assessing Officer. 4. The CIT(A) ought to have appreciated that the Assessing Officer has made addition in respect of transfer pricing adjustment which was not the issue in ....
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....rawal, who was looking after tax matter of assessee. Thus, we find that delay in fling CO was not intentional and deliberate. Hence, delay in filing appeal is condoned. Now adverting to merits of the case. 6. Brief facts of the case are that the assessee-company is engaged in the business of generation of electricity, filed its return of income for Assessment Year 2009-10 on 27.09.2010 declaring income of Rs.1.44 Crore. Initially, the return was processed under Section 143(1). Subsequently, case was reopened under Section 147. Case was reopened on the basis of information received from Directorate of Revenue Intelligence, Mumbai with regard to over-invoicing of goods purchased by Assessee-Group (Essar Group) of Companies through Global Supplies FZE UAE from various equipment manufacturer located in different countries. The Assessing Officer in the reasons recorded noted that Directorate of Revenue Intelligence (DRI) investigated the matter and back-to-back invoices of goods purchased by SR Group Companies from suppliers were matched with invoices raised on Global Suppliers FZE by the original equipment manufacturer the matching was done to extent back-to-back invoices with DRI, ....
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....w.s 144(C)(3) reduced Capital Work in Progress (CWIP) by and amount of Rs. 73.74 Crore. 7. Aggrieved by the additions in the assessment order the assessee filed before ld. CIT(A). Before ld. CIT(A) the assessee challenged the validity of re-opening under Section 147 and issuance of notice under Section 148 as well as addition on merit. The assessee also challenged the action of AO in treating Global Supplies FZE as Associated Enterprises (AE) of assessee. The assessee filed detailed written submission of both the issues. The validity of reassessment was challenged on the basis of CBDT instruction No. 3/2016. Treatment of Global Supplies FZE as AE of assessee on the ground that there is no direct nexus between shareholding of Global Supplies FZE and assessee. Both have independent management. The impugned transaction of import of capital equipment was on account of capital transaction. The AO/TPO failed to provide any justification and nexus between Global Supplies FZE and Essar Power Gujarat Ltd. On the addition on account of reduction capital working progress by 27% the assessee stated that due diligence was taken before granting work order to Global Supply FZE. The assessee co....
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....ssessee. The Ld. CIT(A) has not given his finding on merit. The ld. CIT(A) erred in deleting the TP adjustment made by the TPO after computing the ALP of the transaction done by the assessee with its AE without appreciating the fact that the DRI authorities are not competent to compute ALP to prevent base erosion and profit shifting. The Ld. CIT-DR submits that order of CIT(A) may be reversed and order of AO/TPO may be confirmed. 10. On the other hand, the Ld. AR of the assessee supported the order of CIT(A). The Ld. AR of the assessee submits that case of AO as well as TPO is based on show cause notice of DRI which was set aside by Directorate of Revenue Intelligence (DRI) authorities themselves. Thus, addition suggested by TPO and made by AO has no leg to stand. The Ld. AR also furnished copy of order of Principle Commissioner of Custom (Adjudication) Mumbai in case of assessee as well as order of Custom Excise and Service Tax Appellate Tribunal dated 03.04.2025. The ld AR of the assessee fully supported the order of ld CIT(A). to support his submissions, the ld AR of the assessee relied on the decision of Punjab & Haryana High Court in CIT Vs Sachdeva and Sons (2025) 478 ITR ....