Annapurna Industries Vs. DCIT, Central Circle-1

Parties Involved

Facts Summary

The assessee, Annapurna Industries, a partnership firm, filed its return of income for the assessment year 2014-15, declaring income of Rs.48,52,650/-. The return was selected for scrutiny, and the Assessing Officer found that the assessee had paid interest to related parties. The Transfer Pricing Officer determined that the interest rate paid was not at arm's length, resulting in an excess payment of Rs.2,17,685/-. The Assessing Officer added back this amount. The appeal was against the disallowance of this amount under section 40A(2) of the Income-tax Act, 1961.…

Legal Issues

• 1. Disallowance of Rs.2,17,685/- under section 40A(2) of the Income-tax Act, 1961, attributable to payment of interest.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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