Where the Assessing Officer in the assessment proceedings did not make any enquiry as to whether the equipment received by the assessee free of cost from its holding / subsidiary companies was received on returnable basis or otherwise, the assessment order was erroneous and prejudicial to the interest of the revenue. If, in the set aside proceedings, the assessee satisfies the AO by substantiating based on the documents that the equipments were received on returnable basis then the AO will decide the issue on hand in the light of the order of the Tribunal in the case of Sony India Software Center Private Limited [170 taxmann.com 309 (Bang.-Trib.)]

39. LSI India Research & Development Pvt Ltd. vs. PCIT

ITA No. 1061/Bang./2024

A.Y.: 2017-18 Date of Order: 23.7.2025

Sections: 28(iv), 263

Where the Assessing Officer in the assessment proceedings did not make any enquiry as to whether the equipment received by the assessee free of cost from its holding / subsidiary companies was received on returnable basis or otherwise, the assessment order was erroneous and prejudicial to the interest of the revenue.

If, in the set aside proceedings, the assessee satisfies the AO by substantiating based on the documents that the equipments were received on returnable basis then the AO will decide the issue on hand in the light of the order of the Tribunal in the case of Sony India Software Center Private Limited [170 taxmann.com 309 (Bang.-Trib.)]

FACTS

The assessee preferred an appeal against the order passed by PCIT under section 263 of the Act holding the assessment framed under section 143(3) r.w.s 144(3) and 144B of the Act to be erroneous and prejudicial to the interest of the revenue and further directing the Assessing Office