JOINT COMMISSIONER OF INCOME TAX (OSD), CORPORATE CIRCLE-1, COIMBATORE, COIMBATORE vs. ZF WIND POWER COIMBATORE PRIVATE LIMITED, COIMBATORE

ITA 246/CHNY/2025Status: DisposedITAT Chennai01 August 202519 pages
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What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s direction to treat scrap sales as operating income, noting it relates to the core business. Regarding interest on debentures, the Tribunal directed the AO/TPO to verify if the debentures were in INR and then adopt the average SBI PLR for FY 2011-12 as the ALP.

What were the facts?

The assessee, a company manufacturing gearboxes, had its international transactions referred to the Transfer Pricing Officer (TPO). The TPO made adjustments regarding sale of scrap and interest on convertible debentures. The CIT(A) directed that scrap sales be treated as operating income and that the average SBI PLR be adopted for interest on debentures.

What were the issues?

Whether sale of scrap should be considered operating income for margin computation, and what is the appropriate Arm's Length Price (ALP) for interest on Fully Compulsory Convertible Debentures (FCCDs).

Which sections of the Income-tax Act were involved?

Section 92CA,Section 143(3),Section 144C,Section 250

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, D BENCH, CHENNAI

Before: SHRI GEORGE GEORGE KAND SHRI S.R. RAGHUNATHA

Hearing: 15.07.2025Pronounced: 01.08.2025

PER GEORGE GEORGE K, VICE PRESIDENT:

These appeals filed by the Revenue are directed against two orders of the Commissioner of Income Tax (Appeals), Chennai-16 both dated 28.11.2024 passed u/s.250 of the Income Tax Act (hereinafter the 'A

The order continues below.

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