UCWEB MOBILE PRIVATE LIMITED,GURGAON vs. ASSESSMENT UNIT, INOCOME TAX DEPARTMENT, GURGAON

ITA 3945/DEL/2024Status: DisposedITAT Delhi30 May 2025AY 2020-21Bench: SHRI MAHAVIR SINGH (Vice President), SHRI MANISH AGARWAL (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal deleted the adjustment on interest paid on compulsory convertible debentures, holding they partake the character of debt until conversion. It also deleted the adjustment for interest on outstanding receivables, following the jurisdictional High Court's decision. For reselling of services, the Tribunal set aside the DRP's findings and directed it to decide the objections regarding comparables afresh.

What were the facts?

The assessee, a private limited company, filed its return of income and was selected for scrutiny. The Transfer Pricing Officer (TPO) made adjustments related to advertising, marketing, promotion expenses, interest on compulsory convertible debentures, interest on receivables, and reselling of services. The Dispute Resolution Panel (DRP) partly accepted the assessee's objections.

What were the issues?

Whether interest paid on compulsory convertible debentures is allowable as debt, and whether adjustments for interest on outstanding receivables and reselling of services were correctly made.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 143(2),Section 144C(1),Section 144C(5),Section 144C(8),Section 253(1)(d),Section 36(1)(iii),Section 292B

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Income Tax Appellate Tribunal, DELHI BENCH, ‘I’: NEW DELHI

Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL

For Appellant: Shri Nageswar Rao, Adv. & Shri Parth, Adv
For Respondent: Shri Dharm Veer Singh, CIT DR
Hearing: 10.03.2025Pronounced: 30.05.2025

PER MANISH AGARWAL, AM, This appeal is filed by the assessee against the order passed by the AO u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (“the Act”) dated 27.06.2024 for A.Y. 2020-21. 2. Brief facts of the case are that assessee is a private limited company and had filed its return of income on 13.02.2021 declaring total income at ₹ 27,98,87,490/-. The case was selected for compulsory scrutiny by way of issue of notice u/s 143(2) of the Act. The assessee company was a limited risk distributor and w

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