GE Intelligent Platforms Pvt. Ltd., V. ACIT,

ITA 1564/BANG/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7104 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-08-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 14-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI JT BENGALURU
• Keywords: Transfer pricing; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER IT (TP) A NO. 156 4/BANG/201 3 ASSESSMENT YEAR : 200 3 - 04 GE INTELLIGENT PLATFORMS PVT. LTD., (FORMERLY M/S. GE FANUC SYSTEMS PVT. LTD.,) # 43, VELANKANI TECH PARK, BUILDING NO.9, FIRST FLOOR, ELECTRONIC CITY, HOSUR ROAD, BANGALORE 560 100. PAN: AA A C G 7573K VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(2), BANGALORE. APP ELLANT RESPONDENT A PPELLANT BY : SHRI SACHIT JOLLY, ADVOCATE R ESPONDENT BY : SMT. PADMA MEENAKSHI, JT. CIT(DR)(ITAT), BENGALURU DATE OF HEARING : 1 1 .12.2017 DATE OF PRONOUNCEMENT : 15 .12.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAIN ST THE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS::- THE GROUNDS HEREINAFTER TAKEN BY THE APPELLANT ARE WITHOUT PREJUDICE TO ONE ANOTHER. 1. THAT THE ORDER PASSED BY THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) IV, BANGALORE [CIT (APPEALS )'], TO THE EXTENT PREJUDICIAL TO THE APPELLANT, IS BAD IN LAW AND LIABLE TO BE QUASHED. IT(TP)A NO.1564/BANG/2014 PAGE 2 OF 4 2. THAT THE LEARNED CIT (APPEALS) ERRED IN UPHOLDIN G THE REJECTION OF TRANSFER PRICING (`TP') DOCUMENTATION BY THE LEARNED TRANSFER PRICING OFFICER (`TPO')/ ASSESSING OFFICER ('AO') AND THEREBY ERRED IN NOT APPRECIATING THAT THE APPELLAN T HAD PREPARED THE TP DOCUMENTATION BONA FIDE AND IN GOOD FAITH AN D CONDUCTED THE COMPARABLE ANALYSIS BASED ON THE DETAILED FUNCT IONAL ASSET AND RISK (FAR') ANALYSIS PERFORMED WITH DUE DILIGE NCE AND THE DATA AVAILABLE AT THE TIME OF CONDUCTING THE COMPAR ABILITY ANALYSIS. 3. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (APPEALS) ERRED IN DISREGARDING THE VAR IOUS SUBMISSIONS MADE BY THE APPELLANT AGAINST THE ORDER OF THE LEARNED TPO / AO. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE TRANSF ER PRICING ADJUSTMENT OF RS. 2,17,60,002 IN RESPECT OF THE INT ERNATIONAL TRANSACTIONS OF THE APPELLANT UNDER SECTION 92CA OF THE INCOME TAX ACT, 1961 (THE 'ACT'). 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE REJECT ION OF COMPARABLE COMPANIES. 6. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (APPEALS) ERRED IN NOT EVEN CONSIDERING THE CORRECTION OF ERRORS IN THE COMPUTATION OF MARGINS OF THE COMPARABLE COMPANIES AS PROVIDED BY THE APPELLANT A ND FURTHER ERRED IN NOT CONSIDERING EXCLUSION OF NON OPERATING INCOMES AND EXPENSES WHILE COMPUTING THE MARGINS OF COMPARABLE COMPANIES. 7. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (APPEALS) ERRED IN ACCEPTING THE PROFIT LEVEL INDICATOR ('PLI') ADOPTED BY THE TPO OF CASH PROFIT / SALES INSTEAD OF OPERATING PROFIT/ SALES. 8. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE ADJUST MENT OF RS. IT(TP)A NO.1564/BANG/2014 PAGE 3 OF 4 2,17,60,002 AND IN UPHOLDING THE TP ADJUSTMENT EVEN FOR THE NON ASSOCIATED ENTERPRISE TRANSACTIONS OF THE APPELLANT . 9. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (APPEALS) ERRED IN NOT PROVIDING THE WO RKING CAPITAL ADJUSTMENT. 10. THE LEARNED CIT (APPEALS) ERRED IN NOT CONSIDE RING THE PERFORMANCE OF THE APPELLANT IN THE SUBSEQUENT YEAR S AS A CORROBORATIVE SUBSTANTIATION FOR THE LOWER MARGINS EARNED BY IT IN THE CURRENT YEAR. 11. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING T HAT THE APPELLANT WAS NOT ENTITLED TO THE BENEFIT OF PROVIS O TO SECTION 92C(2) OF THE ACT AS THE PRICE CHARGED BY THE APPEL LANT WAS OUTSIDE THE +/- 5% RANGE OF THE ARITHMETIC MEAN OF THE COMPARABLE PRICES. 12. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING TH E CHARGING OF INTEREST UNDER SECTION 234B, SECTION 23 4C AND SECTION 234D OF THE ACT. 13. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND / OR ALTER, AMEND, RESCIND OR MODIFY THE GROUNDS TAKEN HEREINAB OVE BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE CIT(APPEA LS) WITH THE SUBMISSION THAT THE CIT(APPEALS) HAS NOT APPLIED HIS MIND TO T HE CONTENTIONS OF THE ASSESSEE WHILE DECLINING THE EXCLUSION OF CERTAIN C OMPARABLES. HE BLINDLY APPROVED THE ORDER OF THE TPO/AO. THE LD. DR, THOU GH RELIED UPON THE ORDER OF THE CIT(APPEALS), BUT HAS CANDIDLY ADMITTE D THAT THERE IS NO PROPER ADJUDICATION OF THE ISSUES RAISED BEFORE THE CIT(AP PEALS). 3. HAVING CAREFULLY EXAMINED THE ORDER OF THE CIT(A PPEALS) IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE CIT(APPE ALS) DID NOT ADJUDICATE THE CONTENTIONS OF THE ASSESSEE FOR INCLUSION/EXCLU SION OF THE COMPARABLES IT(TP)A NO.1564/BANG/2014 PAGE 4 OF 4 BY PASSING A REASONED ORDER. HE HAS SIMPLY APPROVE D THE ORDER OF THE TPO/AO. IN THE ABSENCE OF PROPER ADJUDICATION BY T HE CIT(APPEALS), BOTH THE PARTIES HAVE AGREED THAT THE MATTER BE SENT BAC K TO HIM FOR ADJUDICATION OF THE ISSUES AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BY PASSING A REASONED ORDER ON ALL THE DISPUTED COMPAR ABLES AND THEREAFTER TO DETERMINE THE ALP. ACCORDINGLY, WE SET ASIDE THE O RDER OF THE CIT(APPEALS) AND RESTORE THE MATTER TO HIS FILE WIT H A DIRECTION TO READJUDICATE THE ISSUES RAISED BEFORE HIM BY PASSIN G A REASONED ORDER, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF DECEMBER, 2017. SD/- SD/- ( INTURI RAMA RAO ) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 15 TH DECEMBER, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.