This article discusses the case of ICF Consulting India Pvt. Ltd. against the National e-Assessment Centre (NeAC), New Delhi, under ITA No. 744/Del/2021 for the assessment year 2014-15.
ICF Consulting India Pvt. Ltd., a provider of energy management consulting services, faced discrepancies in tax assessments pertaining to the fiscal year 2014-15. This led to an appeal against the orders passed by the Assessing Officer under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961.
The primary issue revolved around the addition of Rs. 22,22,65,864 under section 68 of the IT Act, which was contested by ICF Consulting. The dispute centered on the nature of the receipts from its parent company and the application of these funds.
The tribunal reviewed submissions regarding the inter-company transactions and advances received from the head office. It was argued that these were not income but advances against services to be rendered. The tribunal considered additional evidences including FIRC references, bank statements, and other financial documents to establish the genuineness of the transactions.
The Decision Review Panel (DRP) recognized the genuineness of the transactions and the creditworthiness of the creditor. However, it changed the grounds for tax liability, leading to further debate.
The tribunal directed the Assessing Officer to re-examine certain transactions and reconciliations. While some parts of the appeal were allowed for statistical purposes, the main contention regarding the advances was set for re-evaluation.
The case of ICF Consulting India Pvt. Ltd. highlights complex issues related to transfer pricing and the treatment of inter-company transactions under Indian tax law. The resolution of this case could have broader implications for multinational corporations operating in India.
Resolution of ICF Consulting India Pvt. Ltd.’s Appeal Against NeAC, New Delhi: ITA 744/DEL/2021
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