Section 43AA of the Income Tax Act
Income-tax Act, 2025: s.43
Section 43AA of the Income-tax Act, 1961 corresponds to section 43 (Taxation of foreign exchange fluctuation) of the Income-tax Act, 2025.
Read section 43 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 43AA is (a) CIT v. Genesis Commet (P) Ltd. (163 Taxmann 482), cited in 48 of the 32 judgments on BharatTax that turn on this section.
Leading authorities on Section 43AA
An Assessing Officer, when disbelieving an assessee's explanation, must issue summons to the relevant parties for independent verification. No adverse inference can be drawn against the assessee without such an inquiry.
Circulars and instructions issued by tax boards are binding on departmental authorities, but they cannot override the law declared by the Supreme Court or High Courts; judicial pronouncements prevail over conflicting board circulars.
The Assessing Officer must first accept the arm's length price (ALP) declared by the assessee for international transactions with associated enterprises. Rejection of the declared ALP is an exception, requiring specific conditions to be met, such as those prescribed under section 92CA(3).
