S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Overseas AE, being the least complex entity, can be selected as the tested party where the assessee substantiates its functional profile and comparability-Matter remanded for fresh examination. [S.92A, 92B]
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Ad-hoc determination of ALP of intra-group royalty payments at Nil without applying any prescribed method or comparable transaction is unsustainable-Where the assessee benchmarked the transaction under CUP and substantiated receipt of services, TP adjustment is liable to be deleted. [S.92CA]
S. 90: Double taxation relief-Tax on excess interest under Article 11 cannot exceed the treaty rate of 10%-Surcharge and education cess not leviable separately-DTAA-India-Cyprus. [Art. 11]
S. 80JJA: Biodegradable waste-Collecting and processing-Allocation of expenses-Consistency of practice-Order of CIT(A) affirmed.
S. 80P: Co-operative societies-Deduction under section 80P cannot be denied merely because the assessee claimed deduction under the wrong provision. [S. 80A(5), 80P(2)(a)(i), 80P(2)(c), 154]
S. 69C: Unexplained expenditure-Search assessment-Entire unaccounted business receipts cannot be taxed where corresponding unaccounted business expenditure is evidenced-Only profit element embedded in such receipts is taxable by applying a reasonable net profit rate and telescoping of expenditure is permissible. [S. 145, 153A]
S. 69A: Unexplained money-Search assessment-Unaccounted receipts-Estimation of profit-Telescoping-Seized cash-PF/ESI contributions-Addition was deleted..[S. 69C 132, 145, 153A, General Clauses Act]
S. 69A: Unexplained money-Addition cannot be made on the entire value of alleged unaccounted sales-Only the profit element embedded in such sales is taxable, even where the existence of clandestine sales is established through seized documents and corroborative third-party statements-Estimation of profit at 6% by the CIT(A) was held to be reasonable. [S. 69A, 147]
S. 68: Cash credits-Once the assessee establishes the identity and creditworthiness of the shareholders and the genuineness of the transaction, the burden shifts to the Assessing Officer. Addition was deleted.
S. 68: Cash credits-Purchase expenditure cannot be assessed as unexplained cash credit or unexplained expenditure where the source of payment is not disputed. [S. 69C, 250]