2024 (2) TMI 1531

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..... ailed to justify the invocation of the said provision. The ITAT has further found that the Department had failed to produce any material or establish from the record that the expenses claimed were inflated or unjustified. The Department had also not founded its allegation on a single comparable so as to even prima facie establish that the expenses had been unduly claimed. Applicability of provisions of section 44BBB - It was found that the assessee was not executing a turnkey power project. No substantial question of law.
Hon'ble Mr. Justice Yashwant Varma And Hon'ble Mr. Justice Purushaindra Kumar For the Appellant : Mr. Ruchir Bhatia, SSC. For the Respondent : Mr. Neeraj Jain, Mr. Ansul And Mr. Tavish Varma, Advs. ORDER C .....

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..... Thus, the assessee has discharged its onus with reference to the expenses. As per the provisions of section 40A(2)(a), the Assessing Officer has to form an opinion not in vacuum but based on cogent material that the expenses/payments made by the assessee to the related parties are excessive and unreasonable having regard to fair market value of goods or services. In the facts of the present appeal, the Assessing Officer has not demonstrated in what manner he has formed the opinion that the expenses with reference to related parties are excessive and unreasonable having regarding to the fair market value. The Assessing Officer has not referred to even a single comparable case of similar nature of expenses to demonstrate that the payments/exp .....

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..... executing any turkey power project, nor the project is approved by the Central Government or a competent authority in terms of section 44BBB(1) of the Act. Even, assuming that section 44BBB applies, sub-section (2) of section 44BBB carves out an exception by providing that the assessee may claim lower profit, if he keeps and maintains the books of account and documents prescribed under section 44AA and his accounts are audited in terms of section 44AB." 5. Insofar as Section 44BBB of the Income Tax Act, 1961 ["Act"] and its applicability is concerned, it was found that the assessee was not executing a turnkey power project. As far as the invocation of provisions of Section 40A(2)(b) of the Act is concerned, according to the ITAT as well a .....

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