DCIT., CIR.-3(1), MUMBAI V. CORUS INTERNATIONAL INDIA PVT. LTD., MUMBAI

ITA 1442/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4441 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: K
• Next Hearing Date: 30-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 02-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K CHAND SHRI F V IRANI
• Keywords: Transfer pricing; International transaction; Tax effect
• Section: 143(3)

Judgement Text

M/S CORUS INTERNATIONAL INDIA PVT LTD, (NOW KNOWN AS TATA S TEEL INTERNATIONAL (INDIA) LTD.) ITA NO. 1442 /MUM/201 2 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D / K , MUMBAI , , BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOU NTANT MEMBER ITA NO. : 1442 /MUM/201 2 (ASSESSMENT YEAR: 2008 - 09 ) D CIT - CIR 3(1) , ROOM NO. 607, AAYKAR BHAVAN, M K ROAD, MUMBAI - 400 0 30 VS M/S CORUS INTERNATIONAL INDIA PVT LTD , (NOW KNOWN AS TATA STEEL INTERNATIONAL (INDIA) LTD.) 14 TH FLOOR, THE RUBY, 29, SENAPATI BAPAT MARG, DADAR(WEST), MUMBAI - 400 0 28 .: PAN: AACCC 5436 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N K CHAND RESPONDENT BY : SHRI F V IRANI /DATE OF HEARING : 22 - 12 - 201 5 / DAT E OF PRONOUNCEMENT : 06 - 01 - 201 6 ORDER : . . : PER AMIT SHUKLA , JM : T HE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST IMPUGNED ORDER DATED 09.12.2011 , PASSED BY CIT(A) - 15, MUMBAI FOR THE QUANTUM OF ASSESSMENT P ASSED U/S 143(3) FOR THE ASSESSMENT YEAR 2008 - 09 ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.20,42,820/ - MADE BY THE WAY OF TRANSFER PRICING ADJUSTMENT, WITHOUT APPRECIATING THE FACT THAT THE TP ADJUSTMENT WORKED OUT BY THE ASSESSEE WAS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 92C(2) OF THE I.T. ACT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ASSESSEE IS ENTITLED TO BENEFIT OF 5% MARGIN AS PER SECTION 92C(2) EVEN IN CASES WHERE THE PRICE AT WHICH THE INTERNATIONAL TRANSACTION HAS ACTUALLY BEEN UNDERTAKEN IS FOUND TO OUTSIDE THE 5% BAND. M/S CORUS INTERNATIONAL INDIA PVT LTD, (NOW KNOWN AS TATA S TEEL INTERNATIONAL (INDIA) LTD.) ITA NO. 1442 /MUM/201 2 2 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSEE IS ENTITLED TO BENEFIT OF 5% MARGIN EVEN IN CASES WHERE ONLY ON PRICE HAS BEEN DETERMINED. 4. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 2. AT THE OUTSET, THE LD. CO UNSEL FOR THE ASSESSEE , SHRI F V IRANI, SUBMITTED THAT THE TAX EFFECT ON THE DISPUTED ISSUE IS ONLY RS. 6,94,354/ - , WHICH IS MUCH BELOW THE PRESCRIBED MONETARY LIMIT OF RS. 10 LAKHS IN TERMS OF LATEST CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015. THE SAID CIRCULAR HAS BEEN SPECIFICALLY MADE APPLICABLE RETROSPECTIVELY THAT IS TO PENDING APPEALS ALSO. THUS, THE APPEAL OF THE REVENUE SHOULD BE TREATED AS DISMISSED AS WITHDRAWN. 3. ON THE OTHER HAND, LD. CIT DR SHRI N K CHAND , SUBMITTED THAT IN THE GROUNDS OF APPEAL, THE REVENUE HAS CHALLENGED THE VERY ILLEGALITY OF THE RELIEF ALLOWED, BECAUSE THE STANDARD DEDUCTION OF () 5% MARGIN AS PER SECTION 92C(2) HAS BEEN AMENDED RETROSPECTIVELY, THEREFORE, ORDER OF THE CIT(A) IS BAD IN LAW. HE FURTHER SUBMITTED THA T, HE WANTS TIME TO SEEK INSTRUCTION FOR CONTESTING THIS APPEAL. 4. AFTER CONSIDERING THE AFORESAID SUBMISSION, WE FIND THAT, IT IS AN ADMITTED FACT THAT THE MONETARY LIMIT ON THE DISPUTED ISSUE IS MUCH BELOW THE PRESCRIBED LIMIT FOR FILING OF APPEAL BEFO RE THE TRIBUNAL . NOW AS PER THE LATEST CBDT CIRCULAR NO. 21 OF 2015 DATED 10 TH DECEMBER, 2015, ISSUED BY THE CBDT IN PURSUANCE OF PROVISIONS CONTAINED U/S 268A(1) , THE MONETARY LIMIT , PRESCRIBED FOR FILING OF THE APPEAL BY THE DEPARTMENT BEFORE THE INCOME - TAX APPELLATE TRIBUNAL IS AT RS. 10 LAKHS, THAT IS, THE TAX AFFECT FOR FILING OF APPEAL SHOULD NOT EXCEED THE SAID MONETARY LIMIT. THIS HAS BEEN LAID DOWN IN PARA 3 OF THE CIRCULAR WHICH READS AS UNDER: - M/S CORUS INTERNATIONAL INDIA PVT LTD, (NOW KNOWN AS TATA S TEEL INTERNATIONAL (INDIA) LTD.) ITA NO. 1442 /MUM/201 2 3 3. HENCEFORTH, APPEALS/SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: - S NO APPEALS IN INCOME - TAX MATTERS MONETARY LIMIT(IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/ - 2 BEFORE HIGH COURT 20,00,000/ - 3 BEFORE SUPREME COURT 2 5,00,000/ - IT HAS FURTHER BEEN CLARIFIED BY THE CBDT THAT THE SAID INSTRUCTION WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS ALSO AND SUCH APPEALS SHOULD BE EITHER WITHDRAWN OR NOT PRESSED BY THE REVENUE. THE RELEVANT PARA 10 READS AS UNDER: - 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED B Y THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 5 . AS REGARDS THE CONTENTIONS RAISED BY THE LD. CIT DR , WE ARE UNABLE TO ACCEPT HIS REQUEST AS THE CBDT CIRCULAR SPECIFICALLY PROVIDES THAT IF TAX LIMIT IS BELOW 10 LAK HS , THEN APPEAL SHOULD NOT BE FILED AND IF IT HAS BEEN FILED THEN SAME HAS TO BE TREATED AS NOT PRESSED. E XCEPTIONS TO SUCH RULE HAS BEEN PROVIDED IN THE CIRCULAR ITSELF, WHICH ARE ADMITTEDLY NOT APPLICABLE IN THE PRESENT CASE AT ALL. HENCE, APPEAL FILED B Y THE REVENUE IS DISMISSED AS NON - MAINTAINABLE AND AS NOT PRESSED . 6 . RESULTANTLY, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED AS NOT MAINTAINABLE. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY , 201 6. SD/ - SD/ - ( ) ( ) (RAMIT KOCHAR ) ( AMIT SHUKLA ) ACCOUNTANT MEM BER JUDICIAL MEMBER MUMBAI, DATE: 6 TH JANUARY , 201 6 M/S CORUS INTERNATIONAL INDIA PVT LTD, (NOW KNOWN AS TATA S TEEL INTERNATIONAL (INDIA) LTD.) ITA NO. 1442 /MUM/201 2 4 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 15 , MUMBAI . 4 ) THE COMMISSIONER OF INCOME TAX 3 , MUMBAI . 5 ) , , / THE D.R. K BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS