Appeal details
Counselvise Citation
[2021] 108 COUNSELVISE.COM (IT) 6900 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 1 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-04-2021
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
I1
Assessment Year
2013-2014
Appeal Filed On
12-02-2018
Judgement Text
PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I - 2 : NEW DELHI BEFORE SHRI KULDIP SINGH , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 1048/DEL/2018 (ASSESSMENT YEAR: 2013 - 14 ) ACIT, CIRCLE - 14(2), NEW DELHI VS. KNOWLEDGE INFRASTRUCTURE SYSTEMS PVT. LTD, G - 02, SALCOM AURUM COMPLEX, JASOLA, NEW DELHI PAN: AACCK4380L (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R. S. SHINSHVI, ADV ASSESSEE BY: SHRI DHIRAJ JAIN, SR. DR DATE OF HEARING 16/02 / 2021 DATE OF PRONOUNCEMENT 0 8 / 04 / 2021 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - 44, NEW DELHI DATED 30.11.2017 FOR THE ASSESSMENT YEAR 2013 - 14. THE LD AO HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - (I) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE ORDER OF LD. CIT(A) IS PERVERSE I N GIVING RELIEF TO THE ASSESSEE BY REDUCING THE RATE OF INTEREST FR OM L1BOR+400(4.96231%) TO 2.11% FOR THE TRANSACTION PERTAINING TO INTEREST ON LOAN TO AE BY COMP LETELY IGNORING THE DIRECTION OF HONBLE HIGH COURT IN THE CASE OF M/S COTTON NATURALS (I) (P) LTD. AND VARIOUS TRIBUNAL JUDGMENTS? (II) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE ORDER OF LD. CIT(A) IS PERVERSE IN GIVING RELIE F TO THE ASSESSEE BY REDUCING THE RATE OF INTEREST F ROM LIBOR+400(4.96231%) TO 2.1 FOR THE TRANSACTION PERTAINING TO INTEREST ON LOAN TO AE BY RELYIN G ON THE TPOS STAND IN PREVIOUS AY, WITHOUT APPRECIATING THE FACT THERE IS NO RES JUDICATA IN I NCOME TAX PROCEEDINGS AND IN TH E PROCESS NEGLECTED THE JUDGEMENT OF VARIOUS COURTS AND TRIBUNALS? (III) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE ORDER OF LD. CIT(A) IS PERVERSE, DELETING THE ADJUSTMENT MADE BY THE TPO REGARDING THE CORPORATE GUARANTEE, BY ALLOWING CORPORAT E GUARANTEE FEES AT MERE 0.25% INSTEAD OF THE 1.30% LEVIED BY THE TPO, WHEREAS IF THE SAFE HARBOUR RULES LAID DOWN UNDER INCOME TAX RULES WERE TO BE FOLLOWED, THE ASSESSEE SHOULD HAVE HAD ACCEPT THE FEES AT 2%? (IV) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE ORDER OF LD. C1T(A) IS PERVERSE DELETING THE ADJUSTMENT MADE BY THE TPO REGARDING THE CORPORATE GUARANTEE WITHOUT APPRECIATI NG THE FACT THAT THERE IS NO RES JUDICATA IN INCOME TAX PAGE | 2 PROCEEDING S AND IN THE PROCESS NEGLECTED THE JUDGEMENT OF VARIOUS COURTS AND TRIBUNALS ON THE ISSUE? (V) THAT THE ORDER OF THE LD.CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACT AND IN LAW. 2. BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPO RATED IN THE YEAR 2003 ENGAGED IN THE BUSINESS OF IMPORT AND DELIVERY OF COAL TO PSUS , AND IN POWER TRADING. 3. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.11.2013 DECLARING TOTAL INCOME OF RS. 35,46,51,760/ - . THE ASSESSEE HAS ENTERED INTO AN INTERNATIONAL TRANSACTION OF PURCHASE OF COAL ALONG WITH OTHERS. THE ASSESSEE HAS ALSO ENTERED INTO CERTAIN SPECIFIED DOMESTIC TRANSACTIONS. THE LD TPO VIDE ORDER DATED 25.10.2016 PROPOSED AN ADJUSTMENT OF RS. 7 , 53 , 37 , 772/ - . THE IMPUGNED ADJUSTMENT WAS WITH RESPECT OF INTEREST ON LOAN OF RS. 70 , 24 , 273/ - CORPORATE GUARANTEE COMMISSION OF RS. 1,20,14,304/ - AND REMUNERATION PAID TO KEY MANAGEMENT PERSONNEL OF RS. 5,62,99,195/ - . CONSEQUENTLY, THE DRAFT ASSESSMENT ORDER WAS PASSED BY THE LD AO AND THEREAFTER FINAL ASSESSMENT ORDER WAS PASSED U/S 143(3) READ WITH 92CA3 OF THE ACT ON 27.01.2017, WHEREIN, THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 42,99,89,53 0 / - AGAINST THE RETURN INCOME OF RS. 35,46,51,760/ - WHEREIN, TRANSFER PRICING ADJUSTMENT OF RS. 7,53,37,772/ - WA S INCORPORATED. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) WHO PASSED AN ORDER PARTLY ALLOWING THE APPEAL OF THE ASSESSEE AND THEREFORE REVENUE IS AGGRIEVED. THE ONLY GROUND OF APPEAL OF THE REVENUE IS WITH RESPECT TO THE ADJUSTMENT DELETED BY T HE LD CIT(A) WITH RESPECT TO INTEREST OF LOAN AND CORPORATE GUARANTEE. 5. AT THE TIME OF HEARING THE LD AR SUBMITTED ADVANCE PRICING AGREEMENT U/S 92CC OF THE ACT DATED 18.12.2017 WHEREIN, IN ROLL BACK Y E A R S THE IMPUGNED ASSESSMENT YEARS IS COVERED. A S P E R P A R A NO. 10 OF THAT AGREEMENT , T H E ASSESSEE FILED REVISED INCOME TAX RETURN FOR IMPUGNED ASSESSMENT Y E A R ON 15.03.2018 AN D SUBMITTED FORM 3CEF O N 16.03.2018 WHICH HAS BEEN ACCEPTED BY THE LD AO . 6. IN VIEW OF THIS APPEAL OF THE LD AO IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 / 04 / 2021 . - SD/ - - SD/ - ( KULDIP SINGH ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 8 / 04 / 2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT PAGE | 3 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
