GKN Driveline (India) Ltd. vs. ACIT (OSD)

Parties Involved

Facts Summary

This appeal in ITA No.692/Del/2022 for A.Y. 2017-18 arises out of the order by National e-Assessment Centre, Delhi in appeal No. ITBA/AST/F/144C/2021-22/1032622843(1) dated 22.04.2021. The assessee, GKN Driveline (India) Ltd., challenged the disallowance of contribution made to Employees Group Gratuity Scheme and the Transfer Pricing Adjustment made on account of international transaction of interest on outstanding receivables from the Associated Enterprises (AEs). The assessee argued that the Employees Gratuity Fund Trust was a recognized trust by the Commissioner of Income Tax and that the approval granted to the assessee in its erstwhile name shall apply with all force for the changed name of the assessee also. The assessee also argued that there is no need to impute any interest on the outstanding receivables from the AEs as the assessee is a debt-free company and there are similar delays in collection of outstanding receivables from both AEs and non-AEs which is due to business and commercial reasons.…

Legal Issues

• 1. Disallowance of contribution made to Employees Group Gratuity Scheme
• 2. Transfer Pricing Adjustment made on account of international transaction of interest on outstanding receivables from AEs

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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