ACIT, CHENNAI V. Transworld Garnet India Pvt Ltd., CHENNAI

ITA 1458/CHNY/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4417 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M M BHUSARI
• Assessee Lawyers: R SIVARAMAN
• Keywords: Transfer pricing; International transaction; Difference of opinion

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1458/MDS/2013 / ASSESSMENT YEAR : 2009-10 THE ASSTT. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(2), CHENNAI 600 034. V. M/S. TRANSWORLD GARNET INDIA PVT. LTD., N/NO.334/O/NO.46, MGR ROAD, KALASHETRA COLONY, BESANT NAGAR, CHENNAI 600 090. PAN: AAACT3408N ( ! /APPELLANT) ( '# ! /RESPONDENT) ! $ /APPELLANT BY : SHRI M. M. BHUSARI, CIT '# ! $ /RESPONDENT BY : SHRI R. SIVARAMAN, A DVOCATE $ /DATE OF HEARING : 26.04.2017 $ /DATE OF PRONOUNCEMENT : 31.05.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, CHENNA I DATED 26.03.2013 AND PERTAINS TO THE ASSESSMENT YEAR 2009 -10. THIS APPEAL WAS INITIALLY HEARD ON 01.10.2015. SINCE TH ERE WAS DIFFERENCE OF OPINION AMONG THE MEMBERS WHO CONSTITUTE THE BEN CH INITIALLY, THE ISSUE WAS REFERRED TO PRESIDENT OF INCOME TAX APPEL LATE TRIBUNAL. THE 2 I.T.A. NO. 1458/MDS/2013 PRESIDENT IN HIS CAPACITY AS THIRD MEMBER FOUND THA T IN VIEW OF THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN VIJAY TELEVISION PVT. LTD. 369 ITR 113, AN OPPORTUNITY MAY BE GIVEN TO THE ASS ESSEE TO FILE APPLICATION AND AFTER THE REPLY FILED BY THE REVENU E WITHIN THREE WEEKS, THE MATTER HAS TO BE ADJUDICATED BY THE DIVISION BE NCH. ACCORDINGLY, THE MATTER WAS FIXED FOR HEARING ON THE APPLICATION FILED BY THE ASSESSEE. 2. WHEN THE APPLICATION FILED BY THE ASSESSEE ALON G WITH REPLY WAS TAKEN UP FOR HEARING SHRI M.M. BHUSARI, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE HIGH COURT IN VIJAY TELEVISI ON LTD VS. DISPUTE RESOLUTION PANEL, 369 ITR 113. THE LD. DR CLARIFIED THAT AFTER 01.10.2009, THE LD.AO HAS TO FRAME DRAFT ASSESSMENT ORDER, IF HE PROPOSE TO MAKE VARIATIONS IN THE INCOME OR LOSS WR ITTEN, WHICH IS PREJUDICE TO THE INTEREST OF THE ASSESSEE. IN THIS CASE, ADMITTEDLY DRAFT ASSESSMENT ORDER WAS NOT MADE AND THE LD.AO MADE VA RIATIONS AFTER 01.10.2009. THEREFORE ACCORDING TO THE LD.DR IT IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. 3. WE HEARD SHRI R. SIVARAMAN, THE LD. COUNSEL FOR THE ASSESSEE ALSO. THE LD. COUNSEL POINTED OUT THAT RULE 11 OF THE INCOME TAX 3 I.T.A. NO. 1458/MDS/2013 (APPELLATE TRIBUNAL) RULES, 1963 CLEARLY SAYS THAT T HE ADDITIONAL GROUND SHALL BE RAISED BY THE APPELLANT WITH LEAVE OF THE TRIBUNAL. HOWEVER THE TRIBUNAL WHILE DECIDING THE MATTER WAS NOT BE CONFINED TO THE GROUNDS TAKEN BY THE APPELLANT IN THE MEMORANDU M OF APPEAL OR ADDITIONAL GROUND TAKEN BY THE APPELLANT WITH THE L EAVE OF THE TRIBUNAL. THE TRIBUNAL SHALL REST ITS DECISION ON ANY OTHER GR OUND AFTER GIVING AN OPPORTUNITY TO THE OTHER PARTY. IN FACT THE NON-DR AFTING OF DRAFT ASSESSMENT ORDER WAS SPECIFICALLY RAISED BY THE ASS ESSEE BEFORE THIS TRIBUNAL ON 24.06.2015. THIS TRIBUNAL RECORDED THE I SSUE RAISED BY THE ASSESSEE BEING THE RESPONDENT AND GAVE AN OPPOR TUNITY TO THE REVENUE TO RESPOND. AFTER HEARING THE OBJECTION, T HE APPEAL WAS HEARD. SINCE THE THIRD MEMBER INSTRUCTED THE ASSES SEE TO FILE AN APPLICATION, THE APPLICATION WAS FILED AND SUFFICIE NT OPPORTUNITY WAS GIVEN AS DIRECTED BY THE THIRD MEMBER. SINCE NO DR AFT ASSESSMENT ORDER WAS MADE, THERE CANNOT BE ANY VARIATION IN TH E INTERNATIONAL TRANSACTION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE QUESTI ON ARISES FOR CONSIDERATION IS CAN THE LD.AO MAKE ANY VARIATIONS IN THE INCOME OR LOSS WRITTEN IN RESPECT OF INTERNATIONAL TRANSACTIO N AFTER 01.10.2009 WITHOUT PASSING A DRAFT ASSESSMENT ORDER. THIS ISS UE WAS SPECIFICALLY 4 I.T.A. NO. 1458/MDS/2013 CONSIDERED BY THE MADRAS HIGH COURT IN VIJAY TELEVIS ION (P) LTD SUPRA. THE MADRAS HIGH COURT AFTER CONSIDERING THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT FOUND THAT THE OMISSION TO PASS DRAFT ASSESSMENT ORDER IS NOT A MERE PROCEDURE IRREGULARITY AND IT C ANNOT BE CURED AT ALL. THIS JUDGMENT OF THE MADRAS HIGH COURT IS BINDING ON ALL AUTHORITIES IN THE STATE. FURTHERMORE THE LD.DR VERY FAIRLY SUBMI TTED THAT THE ISSUE IS COVERED BY THE JUDGMENT OF THE MADRAS HIGH COURT IN VIJAY TELEVISION (P) LTD SUPRA. IN VIEW OF THE ABOVE, THI S TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 4. IN THE RESULT THE APPEAL OF THE REVENUE STANDS D ISMISSED. ORDER PRONOUNCED ON 31 ST MAY, 2017 AT CHENNAI. SD/- SD/- ( . . ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESA N) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 31 ST MAY, 2017. JR. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. !' /DR 6. #$ /GF