2023 (3) TMI 557 - AT - Income Tax

Taxability of amount received in the arbitration settlement received from Indian Oil Infrastructure & Energy Services Ltd. (“IOT”) - connection with the project office in India - HELD THAT:- We do not see any infirmity into the order of Ld.DRP as admittedly the settlement amount is related to project office of the assessee company. Therefore, the submission of the assessee is that it has no connection with the project office in India is misplaced and contrary to the records. We therefore, do not find any merit in the Ground No.1 raised by the assessee, the same is hereby dismissed.

Disallowance of claim of brought forward business loss - AO did not allow set off of loss of earlier years on the basis that assessee has not claimed brought forward loss in the Income tax return for the year under consideration - HELD THAT:- We find that the Revenue has not disputed the fact that the expenses are related to the project office and claimed on the basis of audited financial statement. In our considered view, the AO ought to have given set off of losses in pursuance of the direction of Ld.DRP. The AO failed to take note of the fact that the assessee had raised its claim before the Ld.DRP. Therefore, the AO was under legal obligation to comply with the direction of higher authority. We therefore, considering the totality of the facts, direct the Assessing Authority to allow set off of the losses as claimed by the assessee before the Ld.DRP. Thus, Ground No.2 raised by the assessee is allowed in terms indicated herein above.