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TMI Blog2024 (10) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of the assessed income. The aforesaid action of the AO has resulted in increased assessed income to Rs. 37,38,03,079/- and consequently tax demand by Rs. 20,25,83,329/-. In view of the facts of the case, AO is directed to dispose off the rectification application in a time bound manner. TPO has made an adjustment with respect to the entire turnover of the assessee in the construction equipment segment. It is a settled principle of law that adjustment, if any, is to be restricted to the international transactions undertaken by the assessee. In this context, we rely on the judgment of Hindustan Unilever Ltd. [ 2016 (7) TMI 1245 - BOMBAY HIGH COURT] .The SLP filed by the Revenue against the aforesaid judgment of the Hon ble Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Stay Petition (SP) under Rule 35A of the Income Tax Appellate Tribunal Rules, 1963, is seeking to stay the recovery of outstanding demand of Rs. 97,40,95,175/- (the revised demand of Rs. 61,76,06,126/- after TPO passed the rectification order dated 23.08.2024, under section 154 of the Act). 2. Brief facts of the case are as follows: The assessee is engaged in manufacture of road machinery and construction equipment. It is also engaged in trading of certain construction equipment imported from Volvo Group and in providing design engineering services to Volvo Construction Equipment AB. The assessee filed its return of income for the Assessment Year 2020-21 on 10.02.2021 declaring loss of Rs. 37,38,03,079. The case was taken up for scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned assessment order, though the starting point for computing the assessed income has been taken to be the income reported in the income tax return, however, the assessing officer has, instead of considering the figure of returned loss of Rs. 37,38,03,079, taken NIL income as the starting point. ii) In this regard, it is respectfully submitted that since the applicant had declared a loss in the income tax return, the same has to be taken as the starting point of computation of the assessed income. The aforesaid action of the assessing officer has resulted in the increase in assessed income by Rs. 37,38,03,379 and consequentially the tax demand by Rs. 20,25,83,329. iii) The applicant had also filed a rectification application before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment is reduced to Rs. 1,48,90,112. The rectification application filed by the applicant in this regard is pending before the TPO. It is respectfully submitted that post rectification, the total demand raised by the assessing officer (including interest) would reduce to Rs. 53,67,16,634. The rectification application filed before the assessing officer is pending adjudication. Even otherwise it is submitted that the TPO has made adjustment with respect to the entire turnover of the applicant in the construction equipment segment not appreciating that the adjustment, if any, is to be restricted to the international transactions undertaken by the applicant as held by the Hon'ble Bombay High Court in CIT vs. Hindustan Unilever Ltd. 72 taxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en as the starting point of computation of the assessed income. The aforesaid action of the AO has resulted in increased assessed income to Rs. 37,38,03,079/- and consequently tax demand by Rs. 20,25,83,329/-. In view of the facts of the case, AO is directed to dispose off the rectification application in a time bound manner. 9. Further, we find that the TPO has made an adjustment with respect to the entire turnover of the assessee in the construction equipment segment. It is a settled principle of law that adjustment, if any, is to be restricted to the international transactions undertaken by the assessee. In this context, we rely on the judgment of the Hon ble Bombay High Court in the case of CIT Vs. Hindustan Unilever Ltd., 72 taxmann.co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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