Doosan Power Systems India Pvt. Ltd., Gurgaon V. DCIT, New Delhi

ITA 1803/DEL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98024 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I2
• Next Hearing Date: 08-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MITALI MADHUSMITA
• Assessee Lawyers: MANOJ PARDASANI
• Keywords: Transfer pricing
• Section: 143(3)

Judgement Text

ITA NO. 6199/D/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH:I-2 NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER & SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A .NO. 6199/DE L/2012 (ASSESSMENT YEAR-2008- 09) DOOSAN POWER SYSTEMS INDIA PVT. LTD., (FORMERLY KNOWN AS DOOSAN BABCOCK ENGINEERING & SERVICES INDIA P. LTD.) 16 TH FLOOR, DLF SQUARE, JACARANDA MARG, DLF PHASE-II, GURGAON. AACCD2754M VS DCIT, CIRCLE 10(1), NEW DELHI. APPELLANT BY SH. MANOJ PARDASANI, CA RESPONDENT BY SMT. MITALI MADHUSMITA, CIT DR I.T.A .NO. 1803/DEL/2015 (ASSESSMENT YEAR-2010- 11) DOOSAN POWER SYSTEMS INDIA PVT. LTD., (FORMERLY KNOWN AS DOOSAN BABCOCK ENGINEERING & SERVICES INDIA P. LTD.) 16 TH FLOOR, DLF SQUARE, JACARANDA MARG, DLF PHASE-II, GURGAON. AACCD2754M VS DCIT, CIRCLE 10(1), NEW DELHI. APPELLANT BY SH. MANOJ PARDASANI, CA RESPONDENT BY SMT. MITALI MADHUSMITA, CIT DR DATE OF HEARING 08.10.2015 DATE OF PRONOUNCEMENT 04.12.2015 ITA NO. 6199/D/2012 2 ORDER PER BENCH : THIS ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER DATED 30.01.2015, OF LD. DCIT, CIRCLE 10(1) AND DCIT CIRCLE 7(2) DATED 27.02.2015, U/S 143(3) OF I.T. ACT, 196 1 FOR A.Y. 2008-09 AND 2010-11 RESPECTIVELY. 2. BRIEF FACTS AS RECORDED BY THE LD.AO ARE AS UNDE R; THE ASSESSEE IS A SUBSIDIARY OF DOOSAN HEAVY INDUST RIES & CONSTRUCTION LIMITED (HEREINAFTER REFERRED TO AS D HIC), SOUTH KOREA. DHIC IS A MAJOR ENGINEERING, PROCUREMENT, C ONSTRUCTION (EPC) CONTRACTOR, PROVIDING SERVICES THAT INCLUDE ENGINEERING DESIGN, BASIC MATERIAL FABRICATION, EQUIPMENT INSTA LLATION, AND COMMISSIONING AND FACILITY CONSTRUCTION. 2.1 THE APPELLANT ASSESSEE IS ENGAGED IN PROVISION OF ENGINEERING DRAWINGS, DESIGN AND CONSULTANCY SERVICES (ENGINEER ING DESIGN AND RELATED SERVICES) TO ITS ASSOCIATED ENTERPRISES (A ES) IN RELATION TO THE THERMAL, NUCLEAR AND HYDRO POWER PLANT PROJECTS UNDERTAKEN BY THESE AES. 3. AFTER HEARING THE RIVAL CONTENTIONS, WE FIND THA T THE ASSESSEE HAS SELECTED DIFFERENT SET OF COMPARABLES FOR BOTH THE ASSESSMENT YEARS. WHEN QUESTIONED BY THE BENCH, AS TO WHY THE ASSESSE E IS NOT CONSISTENT WITH THE SELECTION OF COMPARABLE COMPANI ES IN BOTH THE YEARS, THOUGH THE FACTS ARE THE SAME, THE LD. COUNS EL SUBMITTED THAT DIFFERENT AUDITORS WERE EMPLOYED FOR BOTH THE YEARS AND THEY ITA NO. 6199/D/2012 3 HAD THEY HAD SELECTED DIFFERENT SET OF COMPARABLES FOR THESE YEARS. ON A FURTHER QUESTION, WE ARE INFORMED THAT THE TPO FOR BOTH THE ASSESSMENT YEARS SELECTED DIFFERENT SET OF COMPARAB LES 3.1. ON EXAMINATION, WE FIND THAT NEITHER THE ASSE SSEE, NOR THE REVENUE IS CONSISTENT IN THEIR APPROACH. IN FACT ON A FURTHER QUERY, WE ARE INFORMED THAT, FOR ASSESSMENT YEAR 2011-12, WHICH IS NOT BEFORE US TODAY, THE ASSESSEE HAD YET ANOTHER AUDIT OR, RESULTING IN CERTAIN OTHER COMPANIES BEING SELECTED AS COMPARABL ES. THE REVENUE HAS ALSO TAKEN A DIFFERENT APPROACH THAN WH AT WAS DONE IN THE PREVIOUS TWO ASSESSMENT YEARS. THUS THE ASSESSE E AS WELL AS REVENUE HAS SELECTED DIFFERENT SETS OF COMPARABLES FOR THESE THREE ASSESSMENT YEARS. 3.2. THE INCONSISTENT APPROACH, BOTH BY THE ASSESSE E AS WELL AS THE REVENUE, CANNOT BE COUNTENANCED. THUS WE DEEM IT FI T AND PROPER TO SET ASIDE THE ISSUE DE NOVO TO THE FILES OF THE LD.TPO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. THE ASSESSEE SHALL FILE A FRESH TPO REPORT FOR BOTH THE ASSESSMENT YEARS, TAKING A CONSISTENT STAND AND THE TPO SHALL EXAMINE THE SAME AFRESH. 9. THE APPEALS FILED BY THE ASSESSEE IN BOTH THE AS SESSMENT YEARS STANDS STATISTICALLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04/12/ 2015 SD/- SD/- (J.S. REDDY) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA NO. 6199/D/2012 4 DATED: 04/12/2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 24.11.15 2. DRAFT PLACED BEFORE AUTHOR 24.11.15 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 09.12.15 6. KEPT FOR PRONOUNCEMENT ON 04.12.15 7. FILE SENT TO THE BENCH CLERK 09.12.15 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.