S. 145 : Method of accounting-Rejection of books of account-Failure to file supporting evidence-Justified in rejecting the books of account-Net profit has to be estimating on scientific basic after allowing deduction on amount of depreciation, partners remuneration and interest paid to partners on their capital. [S. 32, 36(1)(iii), 40(b), 145(3), Partnership Act, 1932, S. 4]

S. 143(1)(a) : Assessment-Intimation-Debatable issue-Cannot be disallowed by CPC-Matter is remanded back to Assessing Officer for adjudication afresh. [S. 11(1)(11(2)]

S. 142(2A) : Inquiry before assessment-Special audit-Referred without examining the accounts-Principle of natural justice-Extended period of limitation is not available-Order is bad in law. [S. 153(3), Explanation1(iii)]

S. 115JB : Company-Book profit-Adjustment of disallowance made under section 14A could not be added to income for purpose of computation of book profit-Interest on income tax refund-Not credited interest on income tax refund to profit and loss account and reduced same from advance tax disclosed under loans and advances as a consistent accounting practice in view of non-crystallisation of such interest due to appeals pending at various forums in respect of related income tax refunds and assessee had offered interest on income tax refunds to tax under normal provisions-No addition of such interest was to be made to net profit for computing book profit under section 115JB-Direction of CIT(A) to for computation of disallowance as per Rule 8D is affirmed. [S. 14A, R.8D]

S. 115BAA : Tax on income of certain domestic companies-Determination of tax in certain cases-Failure to file Form 10IC-Order of the Assessing Officer computing the tax liability at rate of 30 percent as against 22 percent shown by the appellant-Gross receipt or total turnover in financial year 2019-20 did not exceed Rs. 400 crore, rate of income tax was to be 25 per cent of total income-Matter remanded.[S. 139(1), 143(1), Form No 10IC]

S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Adjustments-Purchases/imports-Specified domestic transaction-Purchase transaction of raw materials with AE-Excess purchases booked in relevant year had to be reduced for purpose of arriving at correct profit and only thereafter profitability ratio of assessee was required to be calculated for the purpose of comparison.

S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Specified domestic transaction-Corporate guarantee-Capital financing-ALP adjustment in respect of corporate guarantee provided to AEs should be determined at rate of 0.5 per cent.[S.92B]

S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Specified domestic transaction-LIBOR-CUP method-Interest-Interbank transactions-TPO cannot reject independent party transactions, which are valid input for application of CUP Method, simply because transactions are entered at a rate higher than LIBOR.

S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Specified domestic transaction-Allotment of shares-Subscription to preference shares-levy of interest on excess share application money refunded, by treating same as loan was not justified-Legal condition precedent in entering transaction in respective Production Sharing Contract market that AE’s affiliates are not allowed to have any mark up on a supply of services to AE, ALP is required to be determined having regard to this condition-Commission on corporate guarantee-Benchmarked commission on corporate guarantee given for its AE by following yield spread approach, based on offer letters issued by banks wherein interest on loan chargeable by banks to AE with assessee’s guarantee and without guarantee as compared in rate differential was divided amongst AE and assessee equally, split of 50:50 in respect of both short-term and long-term guarantee was justified-Business support services-Functionally comparable, same could not have been held incomparable simply on ground of low turnover, unless it was demonstrated that functions, assets and risk were completely different and incomparable.[S.92CA]

S. 90 : Double taxation relief-Banking company-Not made arrangement for declaration of dividend-Non-Discrimination-Income is to be charged at a higher rate of tax in India vis-a-vis domestic company and same could not be treated as discrimination on account of fact that assessee belonged to other Contracting State, i.e. Korea-DTAA-India-Korea. [S. 9(1(i), Art. 24]