CAP GEMINI CONSULTING INDIA P. LTD, MUMBAI V. ITO 10(2)(1), MUMBAI

ITA 1682/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3588 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L1
• Next Hearing Date: 11-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 13-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDER SINGH
• Assessee Lawyers: ZAR EER MEHTA; M M GOLVALA AKRAM KHAN
• Keywords: Transfer pricing; Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI V.DURGA RAO, JM ITA NOS.1509 & 6467/MUM/2006, 1682/MUM/2009 : ASST .YEARS 2002-2003, 2003-2004 AND 2004-2005 M/S.CAP GEMINI CONSULTING INDIA PVT.LTD. (FORMERLY CAP GEMINI ERNST & YOUNG CON. INDIA P.LTD.) C/O.KALYANIWALLA & MISTRY KALPATARU HERITAGE, 5 TH FLOOR 127, MAHATMA GANDHI ROAD FORT, MUMBAI 400 023. PA NO.AAACE2443A. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 10(2) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI M.M.GOLVALA, AKRAM KHAN & ZAR EER MEHTA RESPONDENT BY : SHRI NARENDER SINGH (CIT-DR) O R D E R PER R.S.SYAL, AM : THESE THREE APPEALS BY THE ASSESSEE RELATE TO ASSES SMENT YEARS 2002-2003, 2003-2004 AND 2004-2005. SINCE THESE APPEALS INVOLV E SOME COMMON ISSUES, WE ARE THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ASSESSMENT YEAR 2002-2003 2. FIRST FOUR GROUNDS ABOUT DEDUCTIBILITY OF EXPENS ES WERE NOT PRESSED BY THE LEARNED A.R. THESE GROUNDS, THEREFORE, DISMISSED AS NOT PRESSED. 3. GROUND NO.5 IS AGAINST THE CONFIRMATION OF LEVY OF INTEREST U/S.234D. 4. HAVING HEARD BOTH SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD WE FIND THAT THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE SPECIAL BENCH ORDER IN THE CASE OF ITO VS. EKTA PROMOTERS P.LTD. [(2008) 113 ITD 719 ( DEL.) (SB)] HOLDING THAT PROVISIONS OF INTEREST U/S.234D INSERTED WITH EFFEC T FROM 1 ST JUNE, 2003 HAVE NO ITA NOS.1509 & 6467/M/06, 1682/M/09 M/S.CAP GEMINI CONSULTING INDIA PRIVATE LIMITED. 2 RETROSPECTIVE EFFECT. THE LEARNED A.R. HAS PLACED O N RECORD A COPY OF THE UNREPORTED JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. BAJAJ HINDUSTAN LTD. DATED 15 TH APRIL, 2009 HOLDING THAT INTEREST U/S.234D CANNOT BE CHARGED IN RESPECT OF REFUNDS GRANTED PRIOR TO 01.0 6.2003. IN THIS CASE THE HONBLE HIGH COURT HAS HELD THAT SECTION 234D HAS BEEN INSE RTED WITH EFFECT FROM 01.06.2003 AND HENCE DOES NOT HAVE ANY RETROSPECTIV E EFFECT. AS THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2002-2003, NATURALLY TH E PROVISIONS OF SECTION 234D WOULD NOT BE ATTRACTED. THIS GROUND IS ALLOWED. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ASSESSMENT YEAR 2003-2004 6. GROUND NOS.1 TO 4 ABOUT DEDUCTIBILITY OF EXPENSE S WERE NOT PRESSED BY THE LEARNED A.R. THESE GROUNDS, THEREFORE, DISMISSED AS NOT PRESSED. 7. GROUND NO.5 ABOUT TRANSFER PRICING ADJUSTMENT U/ S.92C WAS ALSO NOT PRESSED BY THE LEARNED A.R. WHICH IS AGAIN DISMISSED AS NOT PRESSED. 8. GROUND NO.6 IS AGAINST NOT GRANTING OF DEDUCTION U/S.80HHE ON A SUM OF RS.16,62,613 CREDITED TO THE PROFIT AND LOSS ACCOUN T AS UNBILLED REVENUE. THE ASSESSING OFFICER DID NOT GRANT DEDUCTION ON THE AB OVE REFERRED SUM REPRESENTING THE AMOUNT CREDITED AS UNBILLED REVENUE TO THE PROF IT AND LOSS ACCOUNT ON THE GROUND THAT THE INVOICES IN THIS RESPECT WERE RAIS ED AFTER THE END OF THE YEAR. THE LEARNED CIT(A) ECHOED THE ASSESSMENT ORDER ON THIS POINT ON THE GROUND THAT THE BILLS FOR THE SAME WERE RAISED AFTER THE YEAR ENDI NG. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN OUR CONSIDERED OPINION THE LEARNED CIT(A ) HAS RIGHTLY APPRECIATED THE FACTS IN DENYING THE DEDUCTION U/S.80HHE FOR THE RE ASON THAT THE BILLS IN RESPECT OF THIS AMOUNT WERE NOT RAISED IN THIS YEAR AND AS STA TED BY THE LEARNED A.R. IT WAS ITA NOS.1509 & 6467/M/06, 1682/M/09 M/S.CAP GEMINI CONSULTING INDIA PRIVATE LIMITED. 3 ONLY WORK IN PROGRESS. OBVIOUSLY IN SUCH A SITUATIO N THIS AMOUNT CANNOT BE CONSIDERED AS PART OF `TURNOVER AND THE RESULTANT ALLOWABILITY OF DEDUCTION U/S.80HHE IS NOT POSSIBLE. WE, THEREFORE, UPHOLD TH E VIEW TAKEN BY THE LEARNED CIT(A) ON THIS ISSUE. THIS GROUND FAILS. 10. IN THE RESULT, THE APPEAL IS DISMISSED. ASSESSMENT YEAR 2004-2005 11. GROUND NOS.1 TO 4 ABOUT DEDUCTIBILITY OF EXPENS ES WERE NOT PRESSED BY THE LEARNED A.R. THESE GROUNDS, THEREFORE, DISMISSED AS NOT PRESSED. 12. GROUND NO.5 IS AGAINST NOT GRANTING OF DEDUCTIO N U/S.80HHE ON A SUM OF RS.39,46,430 CREDITED TO THE PROFIT AND LOSS ACCOUN T AS UNBILLED REVENUE. 13. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THIS YEAR ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF ASSESSMENT YEAR 2003-2004. FOLL OWING THE VIEW TAKEN HEREINABOVE WE UPHOLD THE ORDER OF THE L EARNED CIT(A). THIS GROUND IS DISMISSED. 14. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF DECEMBER, 2010. SD/- SD/- ( V.DURGA RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 27 TH DECEMBER, 2010. DEVDAS* ITA NOS.1509 & 6467/M/06, 1682/M/09 M/S.CAP GEMINI CONSULTING INDIA PRIVATE LIMITED. 4 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - X, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.