ACIT, CIRCLE - 2(1)(1), MUMBAI vs. THE BOMBAY DYEING & MFG. CO. LTD., MUMBAI

ITA 2779/MUM/2019Status: DisposedITAT Mumbai05 July 2022AY 2013-1441 pages
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What did the Tribunal hold?

The Tribunal held that no disallowance under Section 14A is required if there is no exempt income. Regarding corporate guarantees, it was held that if the guarantee benefits the parent company, no separate markup is needed, and such transactions may not fall under the definition of international transactions. The issue of subsidy treatment was remanded to the CIT(A) for fresh decision.

What were the facts?

The assessee company and the Revenue filed cross-appeals against the CIT(A) orders concerning assessment years 2009-10, 2010-11, and 2013-14. The appeals dealt with issues related to disallowance under Section 14A, transfer pricing adjustments for corporate guarantees, and the treatment of subsidies.

What were the issues?

The key issues were whether disallowance under Section 14A is applicable without exempt income, and whether corporate guarantees constitute international transactions requiring transfer pricing adjustments. The treatment of subsidies as capital subsidies was also a significant issue.

Which sections of the Income-tax Act were involved?

Section 14A,Section 115JB,Section 92B,Section 92CA

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Income Tax Appellate Tribunal, MUMBAI BENCH “K”, MUMBAI

Before: SHRI KULDIP SINGH & SHRI GAGAN GOYAL

For Appellant: Shri Yogesh Thar, A.R, Shri Chaitanya D. Joshi, A.R
For Respondent: Dr. Yogesh Kamar, D.R
Hearing: 25/26

Per : Kuldip Singh, Judicial Member:

Aforesaid cross appeals filed by the appellant M/s. The Bombay Dyeing & Mfg. Co. Ltd (hereinafter referred to as ‘assessee co

The order continues below.

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