The Mumbai Bench of the Income-tax Appellate Tribunal held that two enterprises will be treated as “associated enterprises” if the conditions of section 92A(1) of the Income-tax Act are independently satisfied—irrespective of the “deeming fiction” set out under the statute.
The case is: Kaybee Private Ltd. v. ITO
The facts reveal that the Indian taxpayer (operating a business centre by providing amenities) and a Singapore entity had a common director who was also a shareholder of the taxpayer and who held a key position in the Singapore company. Based on the common directorship and participation in management, the Assessing Officer determined that the entities were associated enterprises.
The tribunal upheld this determination.
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