Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 687 - ITAT DELHITP Adjustment - determining the Arm’s Length Price (ALP) of the International Transaction pertaining to consideration received for the transfer of business undertaking to AE of the assessee - whether the assessee had transferred its entire business undertaking to its AE or whether the assessee has retained part of assets and liabilities pursuant to Business Transfer Agreement? - contention of the assessee that part of the assets and liabilities were retained and in support of its contention that assessee has placed various documents in the form of Addendum to BTA, etc. to demonstrate that part of the assets only were transferred to its AE - HELD THAT:- We noticed that the contention of the assessee was rejected as neither the Addendum to BTA nor the exhibits forming part of Business Transfer Agreement (BTA) were filed before the TPO. We also noticed that even though the Addendum to BTA and exhibits forming part of BTA were filed before the Ld. DRP the Ld. DRP finds no reason to interfere with the order of the TPO which in our view is not correct. The Addendum to BTA which was placed before us clearly show what all the assets and liabilities to be transferred by the assessee to its AE as per BTA. Since what all the assets and liabilities to be transferred by the assessee are clearly reflected in the Addendum to BTA the TPO/DRP are not justified in assuming that the assessee has transferred the entire assets and liabilities to its AE under BTA as slump sale completely ignoring the evidences on record and making some observations on assumptions. Assessee has clearly demonstrated with evidences that it has transferred only part of the assets to its AE under BTA read with Addendum to BTA and, therefore, there is no reason as to why the Addendum should not be considered and acted upon. Therefore, taking the totality of facts and circumstances into consideration, we direct the TPO to take cognizance of the Addendum the exhibits forming part of BTA and the other evidences and calculate the value of only those assets transferred by the assessee and exclude the assets which were retained, for the purpose of determining the ALP. TP Adjustment under the head “Income from business or profession” instead of "income from capital gains" - HELD THAT:- We are of the view that the consideration received by the assessee on transfer of assets shall be computed under the head “Income from capital gains” and not under the head “Income from Business”. AO is directed to compute the adjustment under the head “Capital gains” and not under the head “Income from Business”.
|