The Tax Publishers2020 TaxPub(DT) 2888 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271AA Section 271BA

Where parties to the alleged internation transactions were not AEs, reporting of international transactions or maintenance of any record as provided under section 92E was not called for and, therefore, levy of penalty under section 271AA/BA on this count, could not be upheld.

Penalty under section 271AA/BA - Leviability - Non-reporting of alleged international transaction and non-maintenance of any record as provided under section 92E - Parties to the transaction not being AEs

Assessee entered into transaction with KEPL, Singapore. AO in reassessment poceedings held that assessee was associate enterprises (AE) of KEPL and made addition/adjustment on account of arm's lengths price (ALP) and thus levied penalty under section 271AA and penalty under section 271BA for not having report and international transaction or not maintained any record as provided under section 92E. Held: In quantum appeals before the Tribunal in ITA No. 2165/Mumbai/2015, dated 20-2-2020, the Tribunal held that the assessee and KEPL Singapore is not associated enterprises (AE) and ALP adjustment could be made on transaction between assessee and KEPL. Accordinlgy, the very basis of the foundation of impugned penalties had been set aside, and penalty order would also not survive.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



IN THE ITAT, MUMBAI BENCH

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