Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 8268 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-10-2016
Appeal Filed By
Assessee
Bench Allotted
D
Next Hearing Date
24-10-2016
Assessment Year
2010-2011
Appeal Filed On
27-05-2016
Judgement Text
, / / / , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! . ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1554/MDS./2016 / ASSESSMENT YEAR : 2010-11 M/S. TRIMBLE INFORMATION TECHNOLOGIES INDIA PRIVATE LTD., MODUE NO.603-604, 6 TH FLOOR, C BLOCK, TIDEL PARK-NO.4,RAJIV GANDHI SALAI, TARAMANI,CHENNAI 600 113. VS. INCOME TAX OFFICER, COMPANY WARD NO.III(1) CHENNAI-34. [PAN AACCA 6240 K ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : MR.ASHIK SHAH & MR. KULDEEP SHARMA, C.A /RESPONDENT BY : / DATE OF HEARING : 24 - 1 0 - 201 6 !' / DATE OF PRONOUNCEMENT : 24 - 10 - 2016 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-11, CHENN AI DATED 07.03.2016 PERTAINING TO ASSESSMENT YEAR 2010-11. ITA NO.1554 /MDS./2016 :- 2 -: 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 1 THE ORDER PASSED BY THE LEARNED (LD.) COMMISSIONE R OF INCOME TAX (APPEALS) -IL [HEREINAFTER REFERRED TO AS CIT (A) ] UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 (THE ACT) TO THE EXTE NT PREJUDICIAL TO THE APPELLANT, IS PERVERSE, ERRONEOUS ON FACTS AND BAD IN LAW. 2. THE LD. CIT (A) ERRED IN LAW AND ON FACT BY NOT TAKING COGNIZANCE OF THE SUBMISSIONS FILED BY THE APPELLANT AND THEREBY NOT PASSING A SPEAKING ORDER IN RESPECT OF SUCH SUBMISSIONS. 3. THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD. TRANSFER PRICING OFFICER (TPO), WHEREIN, THE ARMS LENGTH M ARK-UP WERE COMPUTED INACCURATELY AND FUNCTIONALLY DISSIMILAR C OMPARABLES WERE SELECTED, IGNORING MATERIAL DIFFERENCES LIKE DIVERS E OPERATIONS, INSUFFICIENT DATA, EXTRAORDINARY EVENTS, DIFFERENT BUSINESS MODEL ETC. 4. THE LD. CIT (A) HAS ERRED IN UPHOLDING INAPPROPR IATE QUANTITATIVE FILTERS ADOPTED BY THE LD. TPO WHILE ARRIVING AT TH E FINAL COMPARABLE COMPANIES. 5. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS BY UPHOLDING LD. TPOS APPROACH OF ADOPTING DATA AVAILABLE AS AT THE TIME OF ASSESSMENT PROCEEDINGS WHILE DETERMINING ARMS LENG TH PRICE. 6. THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY NOT GRANTING AN ECONOMIC ADJUSTMENT OWING TO DIFFERENCES IN RISKS B ORNE BY THE, APPELLANT AS A LIMITED RISK CAPTIVE SERVICE PROVIDE R COMPARED TO FULL- FLEDGED ENTREPRENEURIAL COMPANIES SELECTED AS COMPA RABLE. 7. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS BY UPHOLDING LD. TPOS APPROACH OF NOT APPLYING THE MULTIPLE YEAR? P RIOR YEAR DATA FOR COMPARABLE COMPANIES WHILE DETERMINING THE ARM S LENGTH PRICE. 8. THE LD. CIT ERRED IN LAW AND ON FACTS THAT THE A PPELLANT IS ENTITLED TO TAX HOLIDAY UNDER SECTION 10A OF THE ACT ON ITS PROFITS THEREBY FAILING TO APPRECIATE THAT THE APPELLANT WOULD NOT HAVE ANY ITA NO.1554 /MDS./2016 :- 3 -: UNTOWARD MOTIVE OF DERIVING A TAX ADVANTAGE BY MANI PULATING TRANSFER PRICES OF ITS INTERNATIONAL TRANSACTIONS. 3. THE MAIN CONTENTION OF THE LD.A.R IS THAT THE O RDER OF LD.CIT(A) IS VERY CRYPTIC, NOT PASSED THE SPEAKING ORDER. HE SUBMITTED THAT THE ASSESSEE HAS CHALLENGED THE INCLUSION/EXCLUSION OF EIGHT COMPARABLES. HOWEVER, LD.CIT(A) HAD GIVEN FINDINGS WITH REFERENC E TO ONLY TWO COMPARABLES I.E. WITH REGARD TO M/S.KALS INFORMATIO N SYSTEMS LTD., AND M/S.COMPU LINK SYSTEMS LTD. ACCORDING TO HIM, THE CRYPTIC ORDER OF LD.CIT(A) TO BEVACATED. 4. ON THE OTHER HAND, LD.D.R SUBMITTED THAT LD.CIT (A) CONSIDERED ALL THE SUBMISSIONS OF THE ASSESSEE AND PASSED A DE TAILED ORDER, WHICH IS TO BE UPHELD. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN CONTENTION OF LD.A.R IS THAT TH E ORDER OF LD.CIT(A) IS VERY NON-SPEAKING AND HE HAS NOT RECOR DED ALL THE SUBMISSIONS OF THE LD.A.R. FURTHER, LD.A.R SUBMITTE D THAT LD.CIT(A) HAS GIVEN FINDINGS TO ONLY TWO COMPARABLES OUT OF E IGHT COMPARABLES AND HAS NOT GIVEN ANY FINDINGS ON THE BASIS OF WHIC H HE HAS CONFIRMED THE TPOS REPORT. ADMITTEDLY, THE ORDER OF LD.CIT(A) IS VERY CRYPTIC. THE LD.CIT(A) HAS NOT PASSED SPEAKING ORDER. HE HAS NOT CONSIDERED ALL THE SUBMISSIONS OF THE LD.A.R. H OWEVER, THE LD.CIT(A) IN A SUMMARY MANNER ENDORSED THE ORDER OF THE ASSESSING ITA NO.1554 /MDS./2016 :- 4 -: OFFICER WITHOUT ASCERTAINING ANY REASONS AND THE OR DER OF LD.CIT(A) CANNOT BE SUSTAINED. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF LD.CIT(A) FOR FRESH ADJUDICATION AND HE IS DIRECTED TO PASS SPEAK ING ORDER AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND HE SHALL CONSIDER THE SAME IN ACCORDANCE WITH LAW AND DECIDE IT AFRESH. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 24 TH OCTOBER,2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 24 TH OCTOBER, 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF
