Sugam (P) Ltd., Mumbai is engaged in manufacture of ceiling fans and exporting the same to various associated and other enterprises worldwide. The…

Sugam (P) Ltd., Mumbai is engaged in manufacture of ceiling fans and exporting the same to various associated and other enterprises worldwide. The income tax assessment for A.Y. 2022-23 was completed by making reference to the TPO who enhanced the arm's length price of the international transaction by 855 lakhs. The company applied for APA in March 2024 which was signed in July 2024. The tax assessment for the A.Y. 2021-22 regarding ALP of international transaction was disputed before the Tribunal which set aside the order for fresh consideration by the Assessing Officer in June 2024. The company also applied for rollback benefit which was agreed and signed in December 2024. If the APA is applied, the ALP determined for the A.Y.2022-23 would get enhanced by 580 lakhs as against 855 lakhs originally determined by TPO. Sugam (P) Ltd. has an associated enterprise by name Fiber Inc. in Australia. Fiber Inc. wants to appoint an agent in India to procure raw materials from India for the purpose of manufacture of its products in Germany. The persons/ entity so appointed would be authorized to enter into contracts on its behalf after negotiations with the suppliers. Sugam (P) Ltd. borrowed USD 100 lakhs from Triple Inc. USA on 1st July 2019 under a loan agreement approved by the Central Government. Interest is payable half yearly in foreign currency @ 4% per annum, on every half year i.e. on 31st December and 30th June. For the half year ended 31st December 2024, interest was paid on 28th February 2025 after deducting tax on source. TT buying rate of SBI on various dates are: 31st December, 2024 - 1 USD = 72; 31st January, 2025 - 1 USD = 73; 28th February, 2025 - 1 USD = 72.50; 31st March 2025 - 1 USD = 74. Sugam (P) Ltd. exported its products to unrelated party Midland Ltd., Canada. Sugam (P) Ltd. did not maintain prescribed document and information in respect of sales made to Midland Ltd. During the financial year 2024-25, the aggregate sale made by Sugam (P) Ltd. to Midland Ltd., was 12 crores.