VAIBHAV GLOBAL LIMITED,JAIPUR vs. DCIT, CC-4, JAIPUR

ITA 1485/JPR/2024Status: DisposedITAT Jaipur30 June 2025AY 2021-22146 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal decided to dispose of both appeals by a common order due to similar grounds. The judgment extract provided does not contain the Tribunal's final decision or reasoning on any of the issues raised. It only details the facts and the grounds of appeal. Therefore, the specific findings, reasoning, ratio, and operative directions for each issue are not available in the provided text. The extract ends abruptly while detailing the assessee's arguments regarding the application of the Berry ratio. Consequently, the Tribunal's decision on whether the AO's proceedings were without jurisdiction, the correctness of the total income assessment, the validity of transfer pricing adjustments, the disallowance of PF payments, the applicability of Section 115QA, the computation of book profits, the tax liability calculation, the appreciation of DRP directions, and the initiation of penalty under Section 270A cannot be determined from this excerpt.

What were the facts?

The assessee, M/s Vaibhav Global Limited, has filed two appeals challenging the assessment orders dated July 30, 2024, and October 29, 2024, passed by the Deputy Commissioner of Income Tax (DCIT), Central Circle-04, Jaipur. These orders were issued under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961, following directions from the Dispute Resolution Panel-2, New Delhi. The appeals pertain to Assessment Years 2020-21 and 2021-22. The total income assessed for AY 2020-21 was Rs. 325,44,82,409, significantly higher than the returned income of Rs. 115,97,35,540. The primary disputes revolve around transfer pricing adjustments, notional interest on receivables, disallowance of PF payments, invocation of Section 115QA for buy-back of shares, computation of book profits, and tax liability.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the learned Assessing Officer (AO) erred by initiating proceedings and passing the assessment order under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961, being without jurisdiction and against statutory provisions. 2. Whether the AO erred in assessing the total income at Rs. 325,44,82,409/- against the returned income of Rs. 115,97,35,540/- for AY 2020-21. 3. Whether the Transfer Pricing Officer (TPO) and Dispute Resolution Panel (DRP) erred in proposing an adjustment of Rs. 136,31,75,249/- on account of Arm's Length Price (ALP) of international transactions with Associated Enterprises (AEs), and an adjustment of Rs. 96,03,898/- by treating outstanding receivables as unsecured loans and charging notional interest, resulting in a total adjustment of Rs. 137,27,79,147/-. 4. Whether the AO erred in making an addition of Rs. 19,68,509/- for PF payment made under Section 36(1)(va) without considering that the due date for deposit was a public holiday. 5. Whether the AO erred by invoking Section 115QA of the Act and charging additional tax on distributed income in relation to buy-back of shares amounting to Rs. 71,99,99,211/- 6. Whether the AO erred in computing book profits at Rs. 3,25,44,82,409/- by incorrectly adding impugned TP adjustments and other disallowances, contrary to Section 115JB of the Act. 7. Whether the AO erred in computing tax liability by charging income liable for special tax rates at normal rates and failing to give credit for Foreign Tax Credit (FTC). 8. Whether the AO failed to appreciate the directions of the DRP. 9. Whether the AO/TPO erred in initiating penalty under Section 270A for alleged under-reporting of income. Assessee's Contentions: - The AO's order is without jurisdiction and against statutory provisions. - The TP adjustment and notional interest on receivables are incorrect. The economic analysis, MAM, and filters applied by the assessee under Section 92D read with Rule 10D were rejected without establishing conditions under Section 92C(3). - TNMM with OP/OE as PLI was rejected without cogent reasons. - Berry ratio was wrongly applied as PLI under TNMM based on conjectures, disregarding the assessee's manufacturing activities and functional profile. - PF payment was made on a holiday, and the addition under Section 36(1)(va) is incorrect. - Section 115QA was wrongly invoked for buy-back of shares. - Book profits were incorrectly computed by including TP adjustments. - Tax liability was wrongly computed, and FTC credit was not given. - The AO failed to appreciate DRP directions. - Penalty under Section 270A is wrongly initiated. Revenue's Contentions: - Not recorded in the provided extract.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 36(1)(va),Section 115QA,Section 115JB,Section 270A,Section 92D,Section 10D,Section 92C(3)

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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI,

For Appellant: Shri Vinod Kumar Gupta, Adv
For Respondent: Shri Rajesh Ojha, CIT-DR
Hearing: 23/04/2025Pronounced: 30/06/2025

Heard together (2 matters)

ITA No. 1144/JP/2024
ITA No. 1485/JP/2024

Read from the judgment's own cause title. This page is filed under one of them.

PER: RATHOD KAMLESH JAYANTBHAI, AM The above two appeals were filed by the assessee wherein the above named assessee challenge

The order continues below.

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