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2018 (6) TMI 467 - AT - Income TaxGenuineness of international transaction - Held that:- the learned AR did not press the ground challenging the hire purchase transaction treated as bogus - thus we proceed to treat the hire purchase transaction as not genuine. Disallowances of depreciation - Held that:- since transaction of hire purchase of Rig was not genuine, as a corollary, no depreciation on Rig could have been allowed - entitlement of the assessee to depreciation on all assets falling within the block, other than the ‘Rig’, cannot be marred - thus the matter is set aside and restored to the file of AO for allowing depreciation on other assets of block ‘A’ except Rig. Determination of Arm's Length Price - Held that:- If an international transaction is proved to be not genuine, the transfer pricing provisions are not triggered - once we have treated hire purchase agreement as not genuine, it is but natural that the payment of interest made under such hire purchase agreement, cannot be allowed as deduction - hence the net effect is that neither an income can arise nor any deduction can be allowed on account of such a transaction - AO is directed not to allow the deduction on account of such ‘Loss of Rig Repo’ in the computation of total income.
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