9911796707
TMI Blog2023 (10) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... se was referred to the Transfer Pricing Officer ("TPO") who passed an order under Section 92CA(3) of the Income Tax Act ("the Act") proposing an upward adjustment of Rs. 9,44,58,219/- comprising of TP adjustment on account of international transactions made on account of import of paper, aluminium foil, K Film, purchase return of imported paper, etc. 3. The Assessing Officer ("AO") passed an Assessment Order under Section 143(3) after receipt of TPO's order. In addition to the transfer and pricing adjustment, the Assessing Officer made other additions. Aggrieved by the Assessment Order passed by the AO, the Assessee filed an Appeal before the Commissioner of Income Tax (Appeals) ["CIT (A)]. The Appeal was allowed by the CIT(A) by an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g profit by excluding certain items of income from the scope of operating profit of the Assessee. The TPO held that out of the operating profits of the Assessee as declared in the books of accounts, six items should not constitute the operating profits and hence were excluded. These six items are: Particulars Amount (Rs.) Interest on FD 95,63,024/- Interest on IT refund 4,05,651/- Liability written back 6,15,59,011/- Profit on sale of asset 1,43,28,497/- Doubtful debts written back 1,48,74,096/- Miscellaneous income 1,15,12,640/- Total 11,22,43,919/- 6. Thus, the amount of Rs. 11,22,43,919/- was excluded from the scope of operating profits. The TPO/AO therefore made an addition of Rs. 9,44,58,212/-. 7. The CIT (A) held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and since these liabilities were no longer payable to business creditors should be allowed to be written back in the Assessment Year under consideration and the same was rightly offered to tax as business income under Section 41(1) of the Act. Therefore, on facts it was accepted that these liabilities written back were arising out of normal business operations and hence form part of operating income of the Assessee. 9. As regards the writing back of doubtful debts amounting to Rs. 1,48,74,096/-, the CIT(A) came to a factual finding which has also been accepted by the ITAT that those doubtful debts were inextricably linked with the business operations and hence should be considered as operating income. 10. Therefore, there are factual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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