SOLVAY SPECIALITIES INDIA P.LTD, MUMBAI V. DCIT 8(2)(2), MUMBAI

ITA 1369/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5376 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2011-2012
• Appeal Filed On: 11-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Additional evidence
• Section: 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO. 1369 / MUM/ 2016 ( / ASSESSMENT YEAR: 2011 - 12 ) SOLVAY SPECIALITIES INDIA PRIVATE LIMITED PHOENIX HOUSE, A - WING, 4 TH FLOOR, 462, S.B. MARG, LOWER PAREL, MUMBAI - 400013. / VS. DCIT - 8(2)(2), ROOM NO. 615, 6 TH FLOOR, AAYKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI - 400020. /. /. PAN/GIR NO. : AAJCS 0613 F ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 30 .0 7 .201 8 /DATE OF PRONOUNCEMENT: 30. 07 .2018 / O R D E R PER B.R. BASKARAN, AM: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 30 - 12 - 2015 PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 144C(13) OF THE ACT IN PURSUANCE OF DIRECTIONS GIVEN BY LD DRP FOR ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE IS, INTER ALIA, CHALLENGING THE TRANSFER PRICING ADJUSTMENT OF RS.653.58 LAKHS MADE BY THE TAX AUTHORITIES. 3. THE LD A.R SUBMITTED THAT THE ASSESSEE IS HAVING THREE DISTINCT SEGMENTS, VIZ., MANUFACTURING, TRADING AND PROVIDING OF SERVICES. HE SUBMITTED THAT THE ASSESSEE HAD PROVIDED AUDITED SEGMENTAL RESULTS OF ALL THE THREE SEGMENTS BEFORE THE AO. HOWEVER, THE TPO PREFERRED TO DETERMINE THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS AT THE ENTITY LEVEL. HE SUBMITTED THAT THE TPO HA D MADE TP ADJUSTMENTS ON SIMILAR BASIS , I.E., AT THE ENTITY LEVEL IN THE EARLIER YEARS ALSO AND THE SAME HAS BEEN FOLLOWED DURING THE YEAR UNDER CONSIDERATION ALSO. HE SUBMITTED THAT THE ASSESSEE DID NOT FURNISH AUDITED SEGMENTAL RESULTS BEFORE THE AO/TPO IN THE EARLIER YEARS. ASSESSEE BY : SHRI M.P. LOHIA & HEMEN CHANDANIYA REVENUE BY: SHRI JAYANT KUMAR ( D R) ITA. NO.1369/M/2016 A.Y. 2011 - 12 4. THE LD A.R SUBMITTED THAT CO - ORDINATE BENCH OF TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE ASSESSEES OWN CASE IN AY 2009 - 10 AND 2010 - 11 IN ITA NO.1702/M/2014 AND ITA NO.1853/M/2015 RESPECTIVELY. THE ASSESSEE HAD SUBMITT ED AUDITED SEGMENTAL RESULTS BEFORE THE TRIBUNAL IN THE FORM OF ADDITIONAL EVIDENCES AND HENCE THE TRIBUNAL HAS RESTORED ALL THE ISSUES TO THE FILE OF THE AO/TPO FOR DE - NOVA EXAMINATION OF ALL THE ISSUES. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS, IN FAC T, FURNISHED ONLY AUDITED SEGMENTAL REPORTS BEFORE THE AO DURING THE YEAR UNDER CONSIDERATION AND FURTHER SUBMITTED THAT HE DOES NOT HAVE ANY OBJECTION IF THE ISSUES CONTESTED IN THIS APPEAL ARE RESTORED TO THE FILE OF THE AO/TPO FOR CONSIDERING THEM ON TH E BASIS OF SEGMENTAL REPORTS. HE SUBMITTED THAT THE KOLKATA BENCH OF TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF LANDIS + GYR LTD (ITA NO.584/KOL/2015 DATED 13 - 09 - 2017) AND HAS HELD THAT THE SEGMENTAL PROFITABILITY STATEMENTS HAVE TO BE CONS IDERED FOR THE PURPOSE OF BENCH MARKING THE TRANSACTIONS OF EACH OF THE SEGMENTS. 5. THE LD D.R SUBMITTED THAT THE LD DRP HAS FOLLOWED THE ORDER PASSED BY IT IN THE EARLIER YEARS. HE FURTHER SUBMITTED THAT ALL THE ISSUES MAY BE RESTORED TO THE FILE OF AO/TPO, SINCE THE TRIBUNAL HAS RESTORED THE ISSUES TO THE FILE OF AO/TPO IN THE EARLIER YEARS. 6. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT ALL THE ISSUES CONTESTED BEFORE US MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER, SINCE I DENTICAL ISSUES HAVE BEEN RESTORED IN THE EARLIER YEARS BY THE CO - ORDINATE BENCH, VIDE THE ORDER REFERRED SUPRA. ACCORDINGLY WE RESTORE ALL THE ISSUES TO THE FILE OF THE AO/TPO WITH THE DIRECTION TO EXAMINE ALL THE ISSUES AFRESH BY DULY CONSIDERING THE AU DITED SEGMENTAL RESULTS AND ALSO BY CONSIDERING THE DECISION OF THE KOLKATA BENCH OF TRIBUNAL (SUPRA) RELIED UPON BY THE ASSESSEE. ITA. NO.1369/M/2016 A.Y. 2011 - 12 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN TH E OPEN COURT ON 30. 07 .2018. SD/ - SD/ - ( AMARJIT SINGH ) ( B. R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 30. 07 .2018 . VIJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PRIVATE SECRETARY ) , / ITAT, MUMBAI