Where correct determination of income was dependent
upon application of appropriate transfer pricing rule and, consequently,
assessee made a revision in income initially disclosed before SetCom after considerable debate during the course of
hearing, it could not be said that full and true disclosure of
undisclosed income was not made in original application filed before SetCom.
Issue
Whether income initially disclosed before SetCom could be
said to be concealed if additions were made due to transfer pricing provisions?
The
High Court held in favour of assessee as under-
1)
Normally, income
offered for tax in an application made before settlement commission binds the
parties concerned and any revision thereof, would prima facie, is deemed as evidence
of the fact that full and true disclosure of undisclosed income was not made in
original application. However, this is not cast in stone and depends upon the
factual context of each case.
2)
In the
instant case, the correct determination of income was dependent upon the
application of the appropriate transfer pricing rule which to an extent is
subjective and, consequently, additional income was declared by assessee after
a considerable debate over the transfer pricing provisions during the course of
hearing before SetCom.
3)
Therefore, assessee
found to be made a bonafide disclosure in original application and it could not
be said that income was not truly and fully disclosed by assessee- CIT v. Income Tax Settlement Commission
[2016] 65 taxmann.com 40 (Bombay)
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