UL INDIA PRIVATE LIMITED,BENGALURU V. DCIT, CIRCLE-7(1)(1), BENGALURU

ITTPA 2511/BANG/2024

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The case involves UL India Pvt. Ltd., which appealed against the order of the Assessing Officer for the assessment year 2021-22. The primary contention was regarding the double taxation of a bad debt recovery amounting to Rs.1,09,20,680, which the assessee had already declared in its return. The assessee also withdrew several grounds related to Transfer Pricing issues following a unilateral Advance Pricing Agreement with the CBDT. The Tribunal's decision addressed the improper addition of the declared income by the AO and remitted the issue of TDS credit back to the AO for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783513 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 03-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Appeal Filed On: 20-12-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DIVYA K.J.
• Assessee Lawyers: KETAN VED.
• Keywords: Opportunity of being heard; Transfer pricing; Bad and doubtful debts; TDS
• Section: 143(3); 234B

Judgement Text

"IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER IT (TP)A No.2511/Bang/2024 Assessment Year: 2021-22 UL India Pvt. Ltd. 3rd Floor, NO.24, EPIP Zone Kalyani Platina Block-1, Whitefield SO Ramagondanahalli Bengaluru 560 066 PAN NO : AAACU2468F Vs. DCIT Circle 7(1)(1) Bangalore APPELLANT RESPONDENT Appellant by : Sri Ketan Ved., A.R. Respondent by : Dr. Divya K.J., D.R. Date of Hearing : 05.08.2025 Date of Pronouncement : 03.11.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld. Assessing Officer dated 24.10.2024 vide DIN: ITBA/AST/S/143(3)/2024-25/1069905681(1) passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2021-22. 2. The assessee has raised the following grounds of appeal: Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 2 of 12 Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 3 of 12 Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 4 of 12 Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 5 of 12 3. Before us, at the outset, the ld. AR of the assessee CA. Ketan Ved drew our attention to a request letter dated 15/05/2025 filed on 21/05/2025 & submitted that the assessee company had signed a Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 6 of 12 unilateral APA with the Central Board of Direct Taxes (“CBDT”) on 21/03/2025 and accordingly prayed that the ground Nos. 1 to 28 related to Transfer pricing issues may kindly allowed to be withdrawn. 3.1 The ld. DR on the other hand has no objection whatsoever on the request of withdrawal as made by the assessee in pursuant to Unilateral APA. 3.2 We, as per the request letter dated 15/05/2025 of the Director Sri Prosenjit Roy and as requested by the ld. AR of the assessee, allow the assessee to withdraw the ground Nos. 1 to 28 as raised by the assessee related to Transfer pricing issues. Accordingly, these grounds of the assessee company are dismissed as withdrawn. 4. Now the ground Nos. 29 to 32 are Corporate Tax grounds, more particularly related to single issue i.e. consideration of income as per the intimation under section 143(1) of the Act as the starting point of computing the assessed income vide assessment order dated 24/10/2024 despite the fact that such intimation was never issued to the assessee. 4.1 Before us, the ld. AR of the assessee vehemently submitted that the intimation u/s 143(1) of the Act for the assessment year 2021-22 was never issued to the assessee and the status of the return of the assessee as per the income tax portal is still showing “under processing”. The ld. AR also submitted that the assessee company suo-motto declared the bad debt recovered in its return of income amounting to Rs.1,09,20,680/- and the addition once again if made u/s 143(1) of the Act will amount to double taxation. Lastly, the ld. A.R of the assessee submitted that in response to notice u/s 143(1)(a) of the Act, the assessee had categorically submitted that the Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 7 of 12 said amount was already offered to tax in the return of income and accordingly the proposed addition of the same once again will result into a double taxation. 5. The ld. D.R. on the other hand supported the order of the authorities below. 6. We have heard the rival submissions and perused the materials available on record. The assessee company has filed its return of income for the assessment year 2021-22 on 15.3.2022 vide acknowledgement no.366168590150322 by declaring total income of Rs. Nil and accordingly claimed refund of Rs.7,56,31,640/-. The said return was taken for processing by the CPC and the notice u/s 143(1)(a) of the Act was also issued. In response to said notice, the assessee submitted its reply by stating that the bad debts recovered amounting to Rs.1,09,20,680/- had already been offered to tax in the return of income voluntarily by the assessee and addition of the same once again u/s 143(1) of the Act will amount to double taxation. Thereafter, the assessee claimed that no intimation u/s 143(1) of the Act was passed by the CPC and the status of the return of income of the assessee as per the income tax portal is still showing “under processing”, which is extracted below for ease of reference and convenience: Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 8 of 12 6.1 Further, while concluding the assessment proceedings of the assessee vide assessment order dated 24.10.2024, the AO considered the income as per the intimation u/s 143(1) of the Act as the starting point of computing the assessed income. The ld. A.R. of the assessee also argued that that even if the intimation u/s 143(1) of the Act was passed by the CPC, that was without providing any further Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 9 of 12 opportunity of being heard to the assessee and the intimation also never served on the assessee. 6.2 On going through the return of income submitted by the assessee before us, we take note of the fact that the assessee in Part A - P & L of the return had declared bad debts recovered amounting to Rs.1,09,20,680/- under the head “Any other income” which is reproduced below for ease of reference and convenience: Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 10 of 12 6.3 Further, on going through the schedule of the audited financial statement, we also take a note of the fact that in schedule 18, which relates to other income, the assessee had declared bad debts recovered amounting to Rs.1,09,20,680/-, which is also reproduced below for ease of reference and convenience: Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 11 of 12 6.4 Taking into consideration of the above facts, we are of the considered opinion that the assessee had already declared the bad debts recovered amounting to Rs.1,09,20,680/- in its return of income filed for the assessment year 2021-22. Therefore, we find no merit in adding the same once again while passing intimation u/s 143(1) of the Act. The AO had grossly erred in considering the income as per the intimation u/s 143(1) of the Act as starting point of computing the income and should have examined whether the assessee had declared the bad debt recovered in its return of income while concluding the assessment proceedings. Under these circumstances, the addition of Rs.1,09,20,680/- as made under the alleged intimation u/s 143(1) of the Act which has been taken as the starting point while calculating the assessed income while completing the assessment proceedings is unjustified and therefore, we direct the AO to delete the same. Thus, the ground nos. 29 to 32 as raised by the assessee are hereby allowed. 7. Ground No.33 is related to the levy of interest u/s 234A & 234B of the Act, which in our opinion is consequential in nature. 8. Ground No.34 which is related to short grant of TDS credit to the extent of Rs.1,00,98,197/- including the tax credit of UL Quality Assurance Pvt. Ltd. (its subsidiary merged with the company w.e.f. 1.4.2018). This issue relating to short granting of TDS are remitted to the file of AO to examine the same and if the assessee has declared the corresponding income, then the AO should allow the credit of the TDS also after due verification. Accordingly, this ground of appeal is partly allowed. Printed from counselvise.com IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 12 of 12 9. Now ground No.35 and 36 are related to penalty proceedings u/s 274 r.w.s. 270A & 271AAC of the Act, which in our opinion is premature at this stage and accordingly dismissed. 10. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open court on 3rd Nov, 2025 Sd/- (Prashant Maharishi) Vice President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 3rd Nov, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "