ASSISTANT COMMISSIONER OF INCOME TAX, TIRUNELVELI vs. LOYAL TEXTILE MILLS LTD, KOVILPATTI

ITA 2308/CHNY/2025Status: DisposedITAT Chennai04 March 2026AY 2020-21Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI S. R. RAGHUNATHA (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) deleted the disallowance on commission payments and partly deleted the disallowance on professional fees. For the Section 80IA deduction, the CIT(A) upheld the assessee's position, relying on Supreme Court decisions regarding the valuation of captive power consumption. Regarding disallowance for commission paid to domestic agents, the CIT(A) directed the AO to verify and allow deductions where TDS was actually deducted.

What were the facts?

The assessee filed its return of income for Assessment Year 2020-21 declaring NIL income. The Assessing Officer (AO), after considering the Transfer Pricing Officer's report, made significant additions, including disallowances related to Section 80IA deduction, domestic commission, and professional fees. The assessee appealed these additions to the CIT(A).

What were the issues?

Whether the deletion of transfer pricing adjustment for captive power valuation under Section 80IA and the deletion of disallowance under Section 40(a)(ia) for domestic commission were justified.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(3),Section 144B,Section 92CA,Section 80IA,Section 40(a)(ia),Section 40(a)(i),Section 92F,Section 10B,Section 46A(3)

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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA

For Respondent: Shri. Bhupendran, Advocate (Virtual)
Hearing: 18.12.2025Pronounced: 04.03.2026

PER S. R. RAGHUNATHA, AM:

This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 16, Chennai [in short, “ld.CIT(A)”] dated 26.06.2025, relating to the assessment years 2020-21 against the order of the Assessing Officer passed u/s.143(3) r.w.s. 144C(3) r.w.s.144B of the Act dated 30.09.2023. :-2-: ITA No: 2308/Chny/2025

2.

Facts in brief emanating from the records are that the a

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