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2024 (6) TMI 1216 - AT - Income TaxIssues Involved: 1. Assessment of total loss under normal provisions 2. Transfer pricing adjustment 3. Penalty proceedings under Section 270A of the Act Analysis: Assessment of Total Loss under Normal Provisions: The appeals were filed by the assessee against the final assessment order passed by the ld. National e-Assessment Centre under sections 143(3), 144C, and 144B of the Income Tax Act for the Assessment years 2017-18 & 2018-19. The assessee challenged the assessment of the total loss at INR 2,699,202,298, which was different from the loss declared in the return of income. The Tribunal considered the grounds of appeal and consolidated the cases for a joint hearing. The issues related to the assessment of the total loss under normal provisions were thoroughly examined. Transfer Pricing Adjustment: The transfer pricing adjustment was a key issue raised by the assessee. The TPO had made adjustments to the international transactions with associated enterprises (AEs), specifically concerning the purchase of spare parts. The rejection of the cash profit level indicator (PLI) and transfer pricing documentation by the TPO were contested by the assessee. The selection of comparables and the rejection of proposed companies by the appellant were also disputed. The Tribunal analyzed the arguments presented by both parties and considered the economic analysis undertaken by the appellant for establishing the Arm's Length Price (ALP) of the international transactions. Penalty Proceedings under Section 270A: The Tribunal addressed the issue of the Ld. AO proposing to initiate penalty proceedings under Section 270A of the Act against the appellant. The Tribunal found this proposal to be legally unsound and ruled in favor of the appellant on this matter. The Tribunal carefully examined the grounds presented by the appellant and concluded that the penalty proceedings initiated by the Ld. AO were not justified under the provisions of the Act. In conclusion, the Tribunal allowed both appeals filed by the assessee for statistical purposes. The decision was based on a detailed analysis of the issues related to the assessment of total loss under normal provisions, transfer pricing adjustments, and penalty proceedings under Section 270A of the Income Tax Act. The Tribunal provided specific directions to the TPO/AO regarding the treatment of depreciation, selection of comparables, and calculation of transfer pricing adjustments, ensuring a fair and just resolution of the disputes raised by the appellant.
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