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2017 (12) TMI 189 - AT - Income Tax


  1. 2020 (2) TMI 1021 - HC
  2. 2025 (3) TMI 595 - AT
  3. 2025 (2) TMI 1138 - AT
  4. 2025 (3) TMI 252 - AT
  5. 2024 (9) TMI 1439 - AT
  6. 2024 (4) TMI 87 - AT
  7. 2024 (2) TMI 660 - AT
  8. 2023 (11) TMI 392 - AT
  9. 2023 (9) TMI 1335 - AT
  10. 2023 (10) TMI 23 - AT
  11. 2023 (8) TMI 1111 - AT
  12. 2023 (7) TMI 237 - AT
  13. 2023 (7) TMI 224 - AT
  14. 2022 (11) TMI 134 - AT
  15. 2022 (11) TMI 1196 - AT
  16. 2022 (11) TMI 122 - AT
  17. 2022 (10) TMI 972 - AT
  18. 2022 (9) TMI 1028 - AT
  19. 2023 (1) TMI 204 - AT
  20. 2022 (9) TMI 585 - AT
  21. 2022 (8) TMI 1167 - AT
  22. 2023 (1) TMI 1111 - AT
  23. 2022 (8) TMI 31 - AT
  24. 2022 (8) TMI 514 - AT
  25. 2022 (7) TMI 936 - AT
  26. 2022 (6) TMI 292 - AT
  27. 2022 (4) TMI 1176 - AT
  28. 2022 (4) TMI 724 - AT
  29. 2022 (4) TMI 384 - AT
  30. 2022 (3) TMI 611 - AT
  31. 2022 (2) TMI 322 - AT
  32. 2021 (11) TMI 808 - AT
  33. 2021 (10) TMI 649 - AT
  34. 2021 (11) TMI 741 - AT
  35. 2021 (9) TMI 691 - AT
  36. 2021 (9) TMI 457 - AT
  37. 2021 (9) TMI 1436 - AT
  38. 2021 (8) TMI 805 - AT
  39. 2021 (8) TMI 499 - AT
  40. 2021 (5) TMI 484 - AT
  41. 2021 (3) TMI 1229 - AT
  42. 2021 (2) TMI 643 - AT
  43. 2021 (1) TMI 557 - AT
  44. 2020 (11) TMI 813 - AT
  45. 2020 (12) TMI 42 - AT
  46. 2020 (3) TMI 1076 - AT
  47. 2020 (3) TMI 1074 - AT
  48. 2020 (1) TMI 1035 - AT
  49. 2020 (1) TMI 1408 - AT
  50. 2019 (12) TMI 909 - AT
  51. 2019 (9) TMI 1399 - AT
  52. 2019 (6) TMI 1608 - AT
  53. 2019 (6) TMI 464 - AT
  54. 2019 (4) TMI 355 - AT
  55. 2019 (4) TMI 400 - AT
  56. 2018 (12) TMI 1878 - AT
  57. 2019 (1) TMI 1192 - AT
  58. 2018 (12) TMI 575 - AT
  59. 2018 (11) TMI 1903 - AT
  60. 2018 (11) TMI 1172 - AT
  61. 2018 (10) TMI 1922 - AT
  62. 2018 (7) TMI 213 - AT
  63. 2018 (6) TMI 1045 - AT
  64. 2018 (6) TMI 966 - AT
  65. 2018 (4) TMI 635 - AT
  66. 2018 (3) TMI 1782 - AT
  67. 2018 (2) TMI 1142 - AT
  68. 2017 (12) TMI 1000 - AT
Issues Involved:
1. Legality and jurisdiction of the notice issued under Section 263.
2. Mandatory reference to the Transfer Pricing Officer (TPO).
3. Adequacy of inquiries and verification by the Assessing Officer (AO).
4. Examination of trading results, purchases, and sales.
5. Examination of forward contracts and foreign exchange fluctuations.
6. Examination of commission expenses and capital work in progress.
7. Examination of unsecured loans and interest capitalization.

Detailed Analysis:

1. Legality and Jurisdiction of the Notice Issued Under Section 263:
The assessee argued that the notice issued under Section 263 and the subsequent order by the Principal Commissioner of Income Tax (Pr. CIT) were illegal, bad in law, and without jurisdiction because the assessment order passed under Section 143(3) was neither erroneous nor prejudicial to the interest of the Revenue. It was contended that the Pr. CIT did not consider the detailed replies filed by the assessee in response to the notice, violating the principles of natural justice. The Tribunal found that the Pr. CIT had indeed ignored the assessee's responses, making the order under Section 263 illegal and bad in law.

2. Mandatory Reference to the Transfer Pricing Officer (TPO):
The Pr. CIT held that the AO should have referred the matter to the TPO as per CBDT Instruction No. 3 of 2016. The assessee contended that its case did not fall under the conditions stipulated in the said instruction, making such a reference unnecessary. The Tribunal agreed with the assessee, noting that the case was not selected on transfer pricing risk parameters and, therefore, the AO was not bound to refer the transactions to the TPO.

3. Adequacy of Inquiries and Verification by the Assessing Officer (AO):
The Pr. CIT argued that the AO had not made proper inquiries or verification before accepting the trading results and other issues, rendering the assessment order erroneous and prejudicial to the interest of Revenue. The assessee countered that the AO had issued detailed questionnaires and conducted thorough inquiries, which were duly responded to. The Tribunal found that the AO had indeed conducted detailed inquiries and that the Pr. CIT had ignored these facts.

4. Examination of Trading Results, Purchases, and Sales:
The Pr. CIT questioned the acceptance of trading results without thorough examination. The assessee provided detailed explanations, including the submission of purchase/sales bills, vouchers, and stock records. The Tribunal noted that the AO had examined these details and found no fault, thus rejecting the Pr. CIT's contention that further inquiry was needed.

5. Examination of Forward Contracts and Foreign Exchange Fluctuations:
The Pr. CIT held that the AO did not examine the nature of forward contracts and foreign exchange fluctuations. The assessee argued that these were not covered by AS-11 and were exempt from disclosure requirements. The Tribunal accepted the assessee's explanation and noted that the AO had examined these issues during the assessment proceedings.

6. Examination of Commission Expenses and Capital Work in Progress:
The Pr. CIT claimed that the AO had not examined the details of commission expenses and capital work in progress. The assessee provided detailed responses, including the party-wise details of expenses and interest capitalization. The Tribunal found that the AO had examined these details and that the Pr. CIT's order was based on assumptions and lacked independent inquiry.

7. Examination of Unsecured Loans and Interest Capitalization:
The Pr. CIT argued that the AO had not examined the identity, genuineness, and creditworthiness of fresh additions to unsecured loans. The assessee contended that no fresh loans were obtained during the year and provided supporting documents. The Tribunal noted that the AO had examined these issues and that the Pr. CIT had ignored the assessee's explanations.

Conclusion:
The Tribunal concluded that the Pr. CIT had exercised jurisdiction under Section 263 without proper basis, as the AO had conducted adequate inquiries and verification. The order under Section 263 was set aside, and the appeal of the assessee was allowed. The stay application filed by the assessee was dismissed as infructuous.

 

 

 

 

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