DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-19, NEW DELHI vs. KOYA AND COMPANY CONSTRUCTION LIMITED, HYDERABAD

ITA 2177/DEL/2023Status: DisposedITAT Delhi26 November 2025AY 2017-1822 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Revenue failed to discharge the onus of proving an arrangement between the assessee and its associated enterprise to earn extraordinary profits. The Tribunal also found the ad hoc disallowance of expenses by the AO unsustainable.

What were the facts?

The assessee, a construction company, entered into specified domestic transactions with an associated enterprise, Megha Engineering and Infrastructure Limited (MEIL). The assessee maintained Transfer Pricing (TP) documentation and considered its transactions at arm's length. The TPO proposed an adjustment, rejecting the assessee's TP analysis and conducting a fresh economic analysis.

What were the issues?

Whether the specified domestic transactions were at arm's length, and whether the ad hoc disallowance of expenses was justified.

Which sections of the Income-tax Act were involved?

Section 92D,Section 92C(1),Section 143(2),Section 142(1),Section 92CA(1),Section 80IA

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Income Tax Appellate Tribunal, DELHI BENCHES ‘H’: NEW DELHI.

For Appellant: Shri K.C. Devdas, AR
For Respondent: Shri Shankar Gupta, Sr. DR
Hearing: 13.10.2025

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1.

The Revenue has filed appeal against the order of the Learned Commissioner of Income-tax (Appeals)-27, Delhi [“Ld. CIT(A)”, for short] dated 22.05.2023 for the Assessment Year 2017-18. 2. Brief facts of the case are, the assessee is a company limited by shares is specialized in the manufacture and execution of Infrastructure projects on contract basis and specialize in medium and large diameter turnkey pipeline contracts and allied Civil work.

2 During the financial year ended March 31, 2017, relevant to the 3. assessment year 2017-18, the assessee had entered into the following specified domestic transactions :-

S.No Name of the Associated Description of the

The order continues below.

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