VVF (INDIA) LIMITED,MUMBAI vs. INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE , MUMBAI

ITA 4840/MUM/2024Status: DisposedITAT Mumbai14 February 2025AY 2020-21Bench: SMT. BEENA PILLAI (Judicial Member), SHRI OMKARESHWAR CHIDARA ( (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that interest on trade receivables is a separate international transaction and not subsumed within working capital adjustments. However, in this specific case, since all invoices were realized within the agreed period, charging interest was not sustainable. The Tribunal also directed the AO to consider the claim for set-off of brought forward losses.

What were the facts?

The assessee, VVF (India) Limited, appealed against the final assessment order for AY 2020-21, which included significant upward transfer pricing adjustments on account of international transactions of goods and services, corporate guarantee, and notional interest on receivables. The assessee also contested the non-allowance of brought forward losses.

What were the issues?

Whether interest on trade receivables constitutes a separate international transaction and whether brought forward losses should be allowed for set-off.

Which sections of the Income-tax Act were involved?

Section 92B,Section 143(3),Section 144C(13),Section 234A,Section 234B,Section 270A

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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI

Before: SMT. BEENA PILLAI & SHRI OMKARESHWAR CHIDARA

For Appellant: Shri Chintan Vajani
For Respondent: Shri Pankaj Kumar, CIT D.R
Hearing: 22/01/2025Pronounced: 14/02/2025

Per: Smt. Beena Pillai, J.M.: Present appeal filed by the assessee arises out of final assessment order dated 25/07/2024, passed under section 2 ITA 4840/Mum/2024 A.Y. 2020-21

143(3) read with section 144C(13) by the Assessment Unit, for assessment year 2020-21 on following grounds of appeal:

“1. That the Assessing Officer (AO')/National Faceless Assessment Centre (NFAC) erred on facts and in law in completing assessment under section 143(3) read with section 144C(13)/144B of the Income-tax Act ("the Act") at an income of Rs. 40,96,76,986 as against

The order continues below.

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