This analysis covers the tax appeal case numbered ITA 1724/DEL/2019 involving MBL MP Toll Road Company Ltd and the Income Tax Officer (ITO) of Ward – 16(3), New Delhi, pertaining to the assessment year 2015-16. This case highlights significant aspects of corporate taxation and procedural justice in tax appeal processes.
MBL MP Toll Road Company Ltd, engaged in the construction of road infrastructure under the design, build, finance, operate, and transfer (DBFOT) model, faced disputes regarding financial transactions with the Madhya Pradesh Road Development Corporation. The central issue was the treatment of certain receipts and their tax implications.
The company’s appeal against the order of the CIT(A)-6 was driven by various grievances, including alleged procedural lapses and the mishandling of corporate financial data. Notably, the company contested additions made by the Assessing Officer concerning certain contractual receipts.
The Assessing Officer’s decision to add Rs. 20,78,996 as undisclosed income was challenged, highlighting discrepancies in the handling of the receipts from the Madhya Pradesh Road Development Corporation, which were not initially declared in the tax return due to an error in TDS attribution to an associate company.
The Tribunal noted procedural errors and the lack of opportunity for the company to present its case due to corporate insolvency resolution processes. Consequently, the matter was remanded back to the CIT(A) to reassess the case, ensuring that the company was provided a fair hearing.
The case of MBL MP Toll Road Company Ltd vs. ITO demonstrates the complexities involved in corporate taxation and the critical nature of procedural justice. The decision to remand the case reflects the judiciary’s commitment to fairness and the proper application of tax laws, serving as a noteworthy precedent in corporate tax disputes.
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