UNLAWKD

"It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No addition can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material fact necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and   should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are manifestation of the mind of the assessing Officer. The reason guessing for the reasons record...

 The powers of the ITAT under Section 254 of the IT Act are very limited and akin to power under O XLVII Rule 1 of the Code of Civil Procedure, 1908. Power confined to only rectify/correct any mistake apparent from the record. - CIT vs Reliance Telecom Limited, [2022] 440 ITR 1 (SC)

The Comparable Uncontrolled Price (CUP) method is one of the five main transfer pricing methods. It’s used to ensure transactions between related companies are comparable in price to those conducted with unrelated organizations. It has been consistently held by the ITATs across the country that government companies/PSUs could not be considered to be a comparable for the reason that the contracts between public sector undertakings are not driven by profit motive along but other considerations also weigh in such as discharge of social obligations etc. The view has also been upheld by the Hon'ble High Court of Bombay in CIT v. Thyssen Krupp Industries India Pvt. Ltd. [2016] 385 ITR 612( Bom) ; [2016] 68 taxmann.com 248 (Bom).

The Supreme Court in Calcutta Discount Co. Ltd., ITR [1961] 41 ITR 191 (SC) has held that there can be no doubt that the duty of disclosing all primary facts relevant to the decision of the question before the assessment authority lies on the assessee. To meet all possible contentions that when some account books or other evidence have been produced, there is no duty of the assessee to disclose further facts which on due diligence the Income tax Officer might have discovered, the Legislature has put in Explanation to section 34 (1). The duty, however, does not extend beyond the full and truthful disclosure of all primary fact before the assessing authority. He requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else, far less the assessee, to tell the assessing authority what inferences whether of facts or law should be drawn. The ...

In CIT vs. Usha International Ltd., [2012] 348 ITR 485 (Delhi) [FB] , it was held as under (pages 496 and 497 of 348 ITR) : “13. It is, therefore clear from the aforesaid position that: (1) Reassessment proceedings can be validly initiated in case return of income is processed under section 143 (1) and no scrutiny assessment is undertaken. In such cases there is no change of opinion. (2) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceedings in the said case will be hit by the principle of change of opinion. (3) Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted in the issue was examined but the Assessing Officer did not find ...