2020 (3) TMI 1506

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.... 1. The learned CIT(A) has erred in law and on facts in upholding the order passed by the Assessing Officer u/s. 144C r.w.s. 143(3) of the Income-tax Act, 1961. 2. The learned CIT(A) ought to have held that no transfer pricing adjustment can be made since the appellant was engaged in shipping operations and its income was offered under tonnage tax scheme. 3. The learned CIT(A) has erred in law and on facts in upholding the transfer pricing adjustment of Rs. 28,09,305/- on account of interest payable for purchase price of two ships. 4. The learned CIT(A) has erred in law and on facts in upholding the transfer pricing adjustment of Rs. 50,00,000/- on account of purchase price of ship. 5. The learne....

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....r-X would have no bearing on the computation of income liable for taxation in Chapter-XII-G of the Act since under Tonnage Taxation Scheme, actual receipts / revenues earned and expenses incurred are not taken into consideration for the purpose of determining the tonnage income of the eligible company and therefore, the applicability of Transfer Pricing Provisions as per Chapter-X would stand excluded. The Ld. AR has placed a chart on record to submit that facts as well as grounds are pari-materia the same in the case of present assessee vis à-vis assessee's group concern namely Essar Ports Ltd. In fact, the shipping business of that entity got demerged into the assessee w.e.f. 01/10/2010 as per the Scheme approved by Hon'ble Gujarat....

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....hus raised, stand allowed. 6.1 The only surviving TP adjustment of Rs.8.82 Lacs arises out of Negative Lien. It transpired that the assessee has issued No Lien undertakings to the lenders of its AE namely Essar Global Limited (EGL) which is ultimate holding company of the assessee. M/s EGL has obtained loan from foreign branches of ICICI Bank. As per the terms, the assessee was not to transfer, assign and dispose-off 49% of equity of another entity namely M/s Essar Logistics Ltd. (ELL) without prior approval of lender during the pendency of loan. M/s ELL was wholly owned subsidiary of assessee company and as per the terms of agreement 7,30,000 shares has been kept by the assessee as lien to the bank. The cost of investment was Rs.73 Cror....