Sesa Goa Limited ( The name has since change to Sesa Sterlite Ltd.), Panaji V. Addl. Commissioner of Income Tax, Range-1, Panaji., Panaji

ITA 107/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1388 (ITAT-PANAJI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction
• Section: 143(3); 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 107 /PNJ/201 5 (ASST. YEAR : 200 8 - 0 9 ) M/S. SESA GOA LTD., (THE NAME HAS SINCE CHANGED TO SESA STERLITE LTD.) SESA GHOR, 20 , EDC COMPLEX, PATTO, PANAJI GOA. VS. A CIT, RANGE - 1, PANAJI GOA. PAN NO. AACCS 7101 B (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. ANITA SUMANTH ADV. BENECIO MENEZES AGM (TAXATION) V. SANTHI KUMAR - CA DEPARTMENT BY : SHRI K.M. MAHESH - DR SHRI RAMESH S. MUTAGAR D R DATE OF HEARING : 10 / 0 9 /2015 . DATE OF PRONOUNCEMENT : 1 0 / 0 9 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX , PANAJI , DATED 0 9 /0 1 /201 5 . 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 THE LEARNED CIT ERRED IN HOLDING THAT THE ASSESSMENT MADE BY THE A.O. U/S.143 READ SECTION WITH 144 - C (13) OF THE ACT, WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT ORDER HAVING BEEN MADE BY THE A.O. AFTER THE DUE SCRUTINY OF THE TRANSFER PRICING OFFICER AS TO THE A LLEGED INTERNATIONAL TRANSACTIONS AND FURTHER 2 ITA NO. 107 /PNJ/201 5 EXAMINING OF ALL THE RELEVANT DETAILS, AND BY DULY APPLYING HIS MIND THEREOF; HE COULD NOT HAVE PASSED THE ORDER U/S.263 OF THE ACT HOLDING THAT THE ASSESSMENT WAS ERRONEOUS IN SO AS IT IS PREJUDICIAL TO THE I NTEREST OF THE REVENUE. 2 THE LEARNED CIT ERRED HOLDING THAT THE SAID ASSESSMENT WAS ERRONEOUS FOR THE ALLEGED REASONS THAT THERE HAD BEEN UNDER - INVOICING OF EXPORTS OF IRON - ORE, AND OVER - INVOICING OF IMPORTS OF COKING COAL, BASED ON THE FIRST REPORT OF THE SF IO . THE CIT OUGHT TO HAVE HIMSELF CONSIDERED THE SECOND REPORT OF THE SF IO CONCLUDING THAT THERE HAD NEITHER BEEN ANY UNDER - INVOICING OF EXPORTS OF IRON ORE NOR OVER - INVOICING OF IMPORTS OF COKING COAL, BY THE APPELLANT, AND OUGHT NOT TO HAVE MADE A N ORDER U/S.263 OF THE ACT, HOLDING THAT THE SAID ORDER OF THE A.O. WAS ERRONEOUS. 3 THE LEARNED CIT ERRED IN REVISING U/S.263 OF THE ACT, THE A. O .S ORDER IN THE MATTER OF IMPORT OF COKING COAL, WHICH MATTER HAD ALREADY BEEN CONSIDERED AND DECIDED ON AP PEAL BY THE ITAT. THE CIT OUGHT HAVE APPRECIATED THAT HE HAD NO - JURISDICTION TO REVISE U/S.263 OF THE ACT, AN ORDER QUA THE MATTERS CONSIDERED AND DECIDED IN APPEAL BY THE ITAT SINCE THE BY VIRTUE OF THE SAID ITATS ORDER, THE AOS ORDER HAS BEEN MERGED WITH THE ORDER OF THE ITAT IN SO FAR AS THE ISSUES SPECIFICALLY COVERED IN THE SAID ITAT ORDER. 4 THE CIT ERRED IN HOLDING THAT THE SAID ASSESSMENT BY THE A.O. WAS ERRONEOUS U/S.263 OF THE ACT, BASED ON SHAH COMMISSION REPORT. THE CIT OUGHT TO HAVE APPRECIATED THAT THE SAID REPORT OF THE SHAH COMMISSION HAS BEEN ISSUED AFTER CONCLUSION OF THE PROCEEDINGS EVEN BEFORE THE HONBLE ITAT IN RESPECT OF IMPUGNED YEAR AND THUS, IT WAS NOT AVAILABLE TO THE A.O. DURING THE TIME WHEN HE CONDUCTED THE SCRUTINY E XAMINATION FOR THE PURPOSE OF THE ASSESSMENT. THUS, SUCH REPORT WAS NOT A PART OF THE RECORD OF THE PROCEEDINGS AND HENCE THE CIT COULD NOT HAVE HELD THAT THE ASSESSMENT UNDER REFERENCE WAS ERRONEOUS ON THIS ACCOUNT SINCE THE VALIDITY TO ASSUME JURISDICT ION COULD BE EXERCISED ONLY WHEN ANY RECORD IN THE ASSESSMENT PROCEEDINGS IS NOT PERUSED APPROPRIATELY OR PERUSED ERRONEOUSLY BY THE AO. 5 THE LEARNED CIT ALSO ERRED IN NOT APPRECIATING THAT IN THE SFIO REPORT ITSELF, IT WAS OBSERVED THAT THE PRICES AT W HICH EXPORT SALES WERE MADE BY THE COMPANY WERE IN LINE WITH THE LEGITIMATE CONTRACTS ENTERED INTO BY THE COMPANY WITH ITS FOREIGN BUYER AND THE UNDERLYING PRICING MECHANISM WAS IN LINE WITH THE BEST INTERNATIONAL PRACTICES. 3 ITA NO. 107 /PNJ/201 5 6 THE LEARNED CIT ERRED IN HO LDING THAT THE ASSESSMENT ORDER OF THE A.O . WAS ERRONEOUS BASED ON THE SHAH COMMISSION REPORT, WHEREIN THE COMMISSION ITSELF, FOR THE CONSTRAINTS MENTIONED IN THE SAID REPORT ITSELF, ADMITTED THAT IT WAS NOT IN A POSITION TO FINALISE THE ILLEGALITY OR IRRE GULARITY IN THE EXPORTS OF IRON ORE BY THE EXPORTERS IN GOA. 7 THE CIT OUGHT TO HAVE APPRECIATED THAT HE COULD NOT HAVE PASSED HIS ORDER U/S.263 OF THE ACT, DEPENDING ON THE SHAH COMMISSION REPORT, FINDINGS OF WHICH, AT BEST, WERE A GUESS WORK BASED ON V ARIOUS PROBABILITIES AND SUSPICION. 8. THE LEARNED CIT ERRED IN HOLDING THAT THE ASSESSMENT ORDER OF THE A. O . WAS ERRONEOUS BASED ON THE SHAH COMMISSION REPORT, EVEN WHEN THE SF IO HAD ALREADY INVESTIGATED THE MATTER ON THE SAME ISSUE/S AND SUBMITTED ITS REPORT TO THE CENTRAL GOVERNMENT. THE CIT OUGHT TO HAVE APPRECIATED THAT HE COULD NOT HAVE PASSED HIS ORDER U/S.263 OF THE ACT, WHEN THE SF IO BEING A CENTRAL GOVERNMENT AGENCY, HAD IN FACT, INVESTIGATED SUCH ALLEGATION IN RESPECT OF THE APPELLANT TRANS A CTIONS DURING THE PERIOD AND ISSUED A REPORT DATED 7 TH MAY 2012 IN WHICH IT CATEGORICALLY HELD THAT THE PERCENTAGE OF COMMISSION, RATES OF INVOICING IN IMPORT OF COKING COAL AND EXPORT OF IRON ORE ARE NEARLY AT THE SAME LEVELS ACCORDING TO THE PREVAILING M ARKET RATE. FURTHER THE A O HAD ALSO INVESTIGATED SUCH ALLEGATION IN THE PREVIOUS YEAR AND HAS MADE NO ADDITIONS ON THIS COUNT. 9. THE LEARNED CIT ERRED IN HOLDING THAT THE ORDER IS ERRONEOUS ESPECIALLY WHEN THE ORDERS PASSED BY CIT EXERCISING HIS JURISD ICTION U/S 263 MAKING THE SAME ALLEGATIONS IN RESPECT OF OTHER YEARS HAVE BEEN EXAMINED BY THE A O AND HE HAS ALSO PASSED ORDER U/S 143(3) READ WITH SECTION 263 IN RESPECT A.Y. 2006 - 07, 2007 - 08 & 2009 - 10 AND HAVE FOUND NOTHING WRONG IN THE TRANSACTIONS UNDE RTAKEN BY THE COMPANY. THE A0 HIMSELF HAD ALSO OBSERVED THAT THE REPORT OF SF IO , BEING THE CENTRAL AGENCY, HAS CLEARED ALL THE ALLEGATIONS AGAINST THE COMPANY. 10. THE LEARNED CIT ERRED IN HOLDING THAT THE ASSESSMENT MADE BY THE A. O . U/S.143 READ SECTION WITH 144 - C (13) OF THE ACT, WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, ESPECIALLY WHEN THE TPO & A0 HAD THEMSELVES EXAMINED ALL THE TRANSACTIONS UNDER REFERENCE AND TPO COULD NOT FIND ANY ADVERSE INFERENCE EXCEPT A MERE A SSUMPTION REGARDING A POSSIBLE RELATED PARTY 4 ITA NO. 107 /PNJ/201 5 RELATIONSHIP WITH THE ASSESSEE WHICH ASPECT WAS, UPON THOROUGH EXAMINATION, CLEARED OF DOUBT BY THE HONBLE ITAT IN ITS ORDER DATED. 17.05.2013. 3 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DR. ANITA SUMANTH, ADVOCATE SUBMITTED THAT ON SIMILAR ISSUES , THE ORDER UNDER SEC. 263 OF THE ACT WAS PASSED BY THE COMMISSIONER OF INCOME TAX ON 30/03/2012 IN ASSESSMENT YEAR 2009 - 10 , THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL IN I.T.A.NO. 50/PNJ/2012 . DURING T HE PENDENCY OF THE APPEAL BEFORE THE TRIBUNAL, T HE ASSESSING OFFICER IN THE CONSEQUENTIAL ORDER PASSED UNDER SEC. 143(3) READ WITH SEC. 263 OF THE ACT ON 28/03/2013 DID NOT MAKE ANY ADDITION ON THE ISSUES ON WHICH THE COMMISSIONER OF INCOME TAX PASSED THE ORDER UNDER SEC. 263 OF THE ACT. THEREFORE, THE ASSESSEE WITHDREW THE SAID APPEAL AND THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE TRIBUNAL VIDE ITS ORDER DATED 25/07/2013 PASSED IN I.T.A.NO. 50/PNJ/2012. IT WAS THEREFORE THE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ISSU ES IN THE PRESENT APPEAL AGAINST THE ORDER UNDER SEC. 263 OF THE COMMISSIONER OF INCOME TAX ARE IDENTICAL TO THAT OF THE ASSESSMENT YEAR 2009 - 10 . C ONSIDERING THE ORDER OF THE ASSESSING OFFICER PASSED IN ASSESSMENT YEAR 200 9 - 1 0 UNDER SEC. 143(3) READ WITH SEC. 263 OF THE ACT , THE ORDER OF THE COMMISSIONER OF INCOME TAX UNDER SEC. 263 SHOULD BE QUASHED AS HAVING BECOME INFRUCTUOUS . 4 . THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE , WE FIND THAT NO MATERIAL WAS PRODUCED BEFORE US TO SHOW HOW THE FACTS AND ISSUE IN THE PRESENT YEAR ARE IDENTICAL TO THE FACTS AND ISSUE IN THE ASSESSMENT YEAR 2009 - 10 . 6 . THE ONLY ARGUMENT OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE IS THAT SINCE IN THE ASSESSMENT YEAR 2009 - 10 , THE ASSESSING 5 ITA NO. 107 /PNJ/201 5 OFFICER HAS NOT MADE ANY ADDITION ON THE GROUND ON WHICH COMMISSIONER OF INCOME TAX HAS PASSED THE ORDER UNDER SEC. 263 IN THE ORDER PASSED UNDER SEC. 143(3) READ WITH SEC. 263 ON 28/03/2013 , T HE ORDER OF THE COMMISSIONER OF INCOME TAX HAS BECOME INFRUCTUOUS. 7 . WE ARE NOT IN AGREEMENT WITH THE ARGUMENT OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. IF THE ISSUES ARE SAME AND THE FACTS ARE IDENTICA L AS WERE IN THE ASSESSMENT YEAR 2009 - 10 , THEN THE ASSESSING OFFICER WILL BE BOUND BY HIS ORDER FOR ASSESSMENT YEAR 2009 - 10 PASSED UNDER SEC. 143(3) READ WITH SEC. 263 OF THE ACT ON 28/03/2013 AND THERE REMAINS NO GRIEVANCE TO THE ASSESSEE AGA INST THE ORDER PASSED UNDER SEC. 263 BY THE COMMISSIONER OF INCOME TAX. 8 . FURTHER, PRINCIPLES OF RES JUDICATA ARE NOT APPLICABLE IN I NCOME T AX PROCEEDINGS . EACH YEAR IS A SEPARATE UNIT OF THE ASSESSMENT AND THEREFORE, THE ARGUMENT OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CANNOT BE ACCEPTED. FURTHER, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS NOT AD VANCED ANY ARGUMENTS ON THE GROUNDS OF APPEAL RAISED IN THIS APPEAL ON THE MERITS OF ADDITION. HENCE, THEY ARE DISMISSED FOR WANT OF PROSECUTION. THEREFORE, WE FIND NO MERIT IN THIS APPEAL OF THE ASSESSEE AND CONSEQUENTLY THE SAME IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 10 TH DAY OF SEPTEMBER , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 0 TH SEPTEMBER , 201 5 . VR/ - 6 ITA NO. 107 /PNJ/201 5 COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 7 ITA NO. 107 /PNJ/201 5 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 0 & 11 .0 9 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 11 .09 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 11 /0 9 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 11 /0 9 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 11 /0 9 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 10 /0 9 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 11 /0 9 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER