Functional profile of a company cannot be that of a trader if it does not bear the risk associated with owning inventory

Last updated: 09 October 2021

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The Income Tax Appellate Tribunal has ruled that a company cannot be considered a trader if it does not bear the risks associated with owning inventory. The tribunal emphasised that a company operating on an assured return model with minimal risk should not be treated as a trader. This decision follows the binding precedent set by the Delhi High Court.

Court :
ITAT Delhi

Brief :
This appeal by the assessee is preferred against order dated 29.06.2021 framed u/s 143(3) r.w.s 144C(13) r.w.s 144B of the Incometax Act, 1961 [hereinafter referred to as 'The Act'] pertaining to A.Y. 2016-17.

Citation :
ITA No. 907/DEL/2021 [A.Y 2016-17]

Daily Limit Reached