KGK CREATIONS PRIVATE LIMITED,MUMBAI vs. CIRCLE 2(2)(1), MUMBAI

ITA 6854/MUM/2024Status: DisposedITAT Mumbai28 March 2025AY 2021-2022Bench: SHRI PAWAN SINGH (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal directed the AO/TPO to treat foreign exchange gains/losses and reversals of provisions for leave encashment and gratuity as operating items. It also held that no adjustment for overdue interest should be made if the assessee does not charge interest to its AEs or non-AEs.

What were the facts?

The assessee, KGK Creations Private Limited, appealed against an assessment order concerning transfer pricing adjustments. The primary issues involved adjustments on the sale/purchase of jewellery/diamonds and charging interest on overdue receivables from associated enterprises (AEs).

What were the issues?

Whether foreign exchange gains/losses and provision reversals are operating items for transfer pricing analysis, and whether interest adjustment is permissible on overdue receivables when no interest is charged to other parties.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 92C(1),Section 92C(2)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH ‘K’, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER KGK Creations Private Limited Juri iction Assessing Officer Gj-10, SEEPZ SEZ, Seepz S.O. Vs. (JAO) Mumbai 400096, Circle 2(2)(1), Mumbai Aayakar PAN No. AABCK0378H Bhawan, Mumbai Appellant/ assessee Respondent/ revenue Assessee represented by Shri Vijay Mehta CA / AR Department represented by Shri Kiran Unavekar SR. DR. Date of hearing 17/03/2025 Date of pronouncement 28/03/2025

Order under section 254(1) of Income Tax Act. PER: PAWAN SINGH, JUDICIAL MEMBER:

1.

This appeal by assessee is directed against the Assessment Order dated 25/10/2024 passed u/s. 143(3) read with Section 144C(13) read with Section 144B of the Income Tax-Act, 1961, passed in pursuance of direction of Dispute Resolution Panel-2 New Delhi(DRP) dated 18.12.2023. The Assessee has raised following grounds: 1. “Based on the facts and circumstances of the case, the Appellant craves leave to prefer an appeal against the order passed by the Assessment Unit, Income Tax Department National Faceless Assessment Centre ("NFAC") (hereinafter referred to as the "Assessing Offic

The order continues below.

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