M/s. VA Tech Escher Wyss Flovel Pvt. Ltd., Palwal V. DCIT, Faridabad

ITA 1000/DEL/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81735 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 23-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: YOGESH VERMA
• Assessee Lawyers: G C SRIVASTAVA
• Keywords: Transfer pricing; International transaction
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : I : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI GEORGE GEORGE K. , JM ITA NO.1000/DEL/2014 ASSESSMENT YEAR : 2009-10 VA TECH ESCHER WYSS FLOVEL PVT. LTD., (NOW KNOWN AS ANDRITZ HYDRO PVT. LTD.), 49/5, MATHURA ROAD, VILLAGE-PRITHLA, PALWAL. PAN : AAACF0010A VS. DCIT, CIRCLE-1, FARIDABAD. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI G.C. SRIVASTAVA, ADVOCATE DEPARTMENT BY : SHRI YOGESH VERMA, CIT ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 21.01.2014 PASSED BY THE AO U/S 143(3) READ WITH SE CTION 144C OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2009-10. ITA NO.1000/DEL/2014 2 2. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE CHA LLENGING THE VALIDITY OF THE IMPUGNED ORDER ON THE BASIS THAT TH E SAME WAS MADE IN A WRONG NAME, WAS NOT PRESSED BY THE LD.AR. THE SAME, THEREFORE, STANDS DISMISSED. 3. THE FIRST ISSUE RAISED IN THIS APPEAL IS AGAINST THE TRANSFER PRICING ADJUSTMENT AMOUNTING TO `98,66,814/- ON ACC OUNT OF PAYMENT MADE BY THE ASSESSEE FOR TECHNICAL SERVICES RECEIVED FROM ITS ASSOCIATED ENTERPRISE (AE). 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE PAID A SUM OF `98.66 LAC AS TECHNICAL FEES TOWARDS TECHN ICAL SERVICES RENDERED BY ITS AE. THE TPO DETERMINED ARMS LENGT H PRICE OF THIS INTERNATIONAL TRANSACTION AT ` NIL AS, IN HIS OPINI ON, THE ASSESSEE DID NOT NEED ANY SERVICES IN QUESTION AND THESE WERE NO T ACTUALLY RECEIVED, AND, IF AT ALL THESE WERE RECEIVED, WERE NOT REQUIRED. THAT IS HOW THE TRANSFER PRICING ADJUSTMENT OF `98.66 LA C WAS PROPOSED BY THE TRANSFER PRICING OFFICER AND IN TURN, MADE BY THE ASSESSING OFFICER. THE ASSESSEE IS AGGRIEVED AGAINST THIS ADD ITION. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT TH E ASSESSEE MADE ITA NO.1000/DEL/2014 3 PAYMENT OF THE ABOVE AMOUNT ON RECEIPT OF TECHNICAL SERVICES PURSUANT TO AN AGREEMENT DATED 26.04.2006, A COPY O F WHICH HAS BEEN PLACED ON PAGE 196 OF THE PAPER BOOK. SUCH PA YMENT WAS MADE IN CONSIDERATION OF RECEIPT OF TECHNICAL SERVI CES IN THE PRECEDING YEAR AS WELL, FOR WHICH THE TPO PROPOSED AND THE AO MADE TRANSFER PRICING ADJUSTMENT IN THE SAME MANNER IN WHICH IT HAS BEEN DONE FOR THE INSTANT YEAR. THE ASSESSEE P REFERRED APPEAL AGAINST THAT ORDER AND THE TRIBUNAL VIDE ITS ORDER DATED 26.09.2013 IN ITA NO.6226/DEL/2012, HAS RESTORED THE MATTER FO R A FRESH DETERMINATION OF ALP WITH CERTAIN DIRECTIONS. A CO PY OF SUCH TRIBUNAL ORDER IS AVAILABLE ON RECORD. IN THE ABSE NCE OF ANY DISTINGUISHING FACTUAL OR LEGAL FEATURE HAVING BEEN BROUGHT TO OUR NOTICE IN THE FACTS FOR THE PRECEDING YEAR AS WELL AS FOR THE INSTANT YEAR, RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO/TPO FOR A FRESH DETERMINATION OF ALP OF THIS INTERNATIONAL TR ANSACTION IN ACCORDANCE WITH LAW, AFTER ALLOWING A REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE ONLY OTHER GROUND IS AGAINST THE ADDITION OF `60 LAC MADE BY THE AO U/S 14A OF THE ACT. HERE AGAIN, WE FIND THAT SIMILAR ITA NO.1000/DEL/2014 4 DISALLOWANCE WAS MADE BY THE AO. WHEN THE MATTER C AME UP BEFORE THE TRIBUNAL, THIS ISSUE WAS ALSO SENT BACK FOR A FRESH EXAMINATION IN THE LIGHT OF CERTAIN DIRECTIONS. THE FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUESTION OF DISALLOWANCE U/S 14A AFRES H AS PER LAW, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.09.201 4. SD/- SD/- [ GEORGE GEORGE K. ] [ R.S. SYAL ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 24 TH SEPTEMBER, 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.*