ACIT, CIRCLE-10(1), NEW DELHI V. HONDA SIEL POWER PRODUCTS LTD., NEW DELHI

ITA 76/DEL/2022

AI Insights

The case involves the Income Tax Department (Revenue) appealing against the order of the Commissioner of Income Tax (Appeals)-44, New Delhi, which had earlier allowed the appeal of Honda Siel Power Products Ltd. The primary contention was regarding the disallowance made in respect of payment of royalty on sales made to Associated Enterprises (AEs) and the classification of the assessee as a contract manufacturer. The Income Tax Appellate Tribunal (ITAT) had previously set aside the assessment order, leading to a re-assessment which was partially contested by the assessee. The CIT(A) had allowed the appeal for statistical purposes, which was then challenged by the Revenue in the current appeal. However, the appeal was dismissed on the grounds of the tax effect being below the threshold specified in the CBDT circular.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707177 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2008-2009
• Appeal Filed On: 13-01-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SINGH SHARMA
• Assessee Lawyers: MANSHA BHALLA
• Keywords: Set aside; Question of law; Tax effect
• Section: 143(3)

Judgement Text

" ITA NO 76/Del/2022 ACIT vs Honda Siel Power Products Ltd A.Y. 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘I’: NEW DELHI) BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No:-76/Del/2022 (Assessment Year- 2008-09) ACIT CIRCLE -10 (1) New Delhi Vs. Honda Siel Power Products Ltd. 7th Floor, Vihaya Building, 17 Barakhamba, Road, Connaught Place, Delhi- 110001 PAN No: AAACH8464L APPELLANT RESPONDENT Appellant by: Sh. Vikram Singh Sharma, Sr. DR Respondent by : Ms. Mansha Bhalla, AR Date of Hearing :04.07.2025 Date of Pronouncement : 08.07.2025 ORDER PER SUDHIR KUMAR, JM The appeal by Revenue is preferred against the order of Commissioner of Income Tax (Appeals)-44, New Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 20.03.2020arising ITA No.76/Del/2022 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 2 out of the order of the AO vide dated 25.05.2017 for Assessment Year 2008-09, on the following grounds of appeal: - 1. Whether on the facts and circumstances of the case, the Ld.CIT(A) was right in deleting the disallowance made in respect of payment of royalty on sales made to AEs, whereas, this issue has been set aside by the Hon'ble ITAT for A.Y. 2008-09 to A.Υ. 2011-122 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in relying upon the order of Hon'ble High Court to hold that the assessee is not a contract manufacturer when this was not a Question of Law before the Hon'ble High Court. 3. The appellant craves leave to add, alter or amend any ground of appeal above at the time of hearing. 2. The brief facts of the case are that the assessee is a public limited company incorporated under the Companies Act, 1956 and is engaged in the business of manufacturing of portable generating sets, I.C. engines, water pumping sets and manufacturing and processing of pressure Die Casting Parts. The assessee company filed the return of income for the relevant previous year on 30-09- 2008 declaring total income of Rs. 37,15,75,026. The, Assessing Officer has completed the assessment u/s 143(3) r.w.s. 144C of the ITA No.76/Del/2022 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 3 Income Tax Act, 1961 [here in referred “the Act”] at an income of Rs. 55,57,99,422/- following the direction of the Ld. DRP after making several disallowances. Aggrieved the order of the assessing officer, the assessee filed the appeal before the Hon’ble ITAT. The appeal filed by the assessee was allowed by the Hon’ble ITAT by order dated 12-12-2014 and set aside the order of the assessing officer with the direction to decide the case as a fresh. In the compliance of the order of the Hon’ble ITAT the assessing officer passed the assessment order after allowing the partial relief. Aggrieved the order of the ld. Assessing officer the assessee filed the appeal before the Ld. CIT(A) who vide his order dated 20-03-2020 allowed the appeal for statistical purpose. Being aggrieved the order of the Ld. CIT(A) the Revenue is in appeal before the Tribunal. 3. We have heard both the parties and perused the records. 4. On the point of Tax effect in this appeal the clarification was sought from the department. The Ld. Sr. DR has submitted the report issued from the AO who admitted in his report that the case does not fall in the exception clause of the circular No. 5/2024. The report furnished by AO as under: ITA No.76/Del/2022 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 4 ITA No.76/Del/2022 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 5 ITA No.76/Del/2022 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 6 5. The grievance of the Revenue shows that the tax effect would be less than Rs.60 lacs, therefore, the present appeal filed by the Revenue is not maintainable in the light of the CBDT Circular No.09 ITA No.76/Del/2022 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 7 of 2024 dated 17/09/2024. The appeal is accordingly dismissed with the liberty, to move the restoration application if the tax effect found at any stage more than the Rs. 60 lacs. 6. In the result, the appeal filed by the revenue is accordingly dismissed. Order pronounced in the Open Court on 08.07.2025. Sd/- Sd/- (RAMIT KOCHAR) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 08/07/2025 NEHA, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "