DCIT 3(2)(1), MUMBAI V. JABIL CIRCUIT INDIA P.LTD, MUMBAI

ITA 1848/MUM/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4537 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Additional evidence; Question of law; Initiation of penalty proceedings; Corroborative evidences; TDS; Set aside
• Section: 271(1)(c); 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M. BALAGANESH , ACCOUNTANT MEMBER ITA NO. 1848/MUM./2016 ( ASSESSMENT YEAR : 20 11 12 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 3(2)(1), MUMBAI . APPELLANT V/S JABIL CIRCUIT INDIA PVT. LTD. ARENA HOUSE, PLOT NO.103 ROAD NO.12, OPP. TULIP TELECOM MAROL MIDC, ANDHERI (E) MUMBAI 400 093 PAN AACCP7114K . RESPONDENT C.O. NO.165/MUM./2016 ( ARISING OUT OF ITA NO.1848/MUM./2016 ) ( ASSESSM ENT YEAR : 20 11 12 ) JABIL CIRCUIT INDIA PVT. LTD. ARENA HOUSE, PLOT NO.103 ROAD NO.12, OPP. TULIP TELECOM MAROL MIDC, ANDHERI (E) MUMBAI 400 093 PAN AACCP7114K . CROSS OBJECTOR (ORIGINAL RESPONDENT) V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 3(2)(1), MUMBAI . RESPONDENT (ORIGINAL APPELLANT) JABIL CIRCUIT INDIA PVT. LTD. 2 ITA NO.1963/MUM./2016 ( ASSESSMENT YEAR : 20 11 12 ) JABIL CIRCUIT INDIA PVT. LTD. ARENA HOUSE, PLOT NO.103 ROAD NO.12, OPP. TULIP TELECOM MAROL MIDC, ANDHERI (E) MUMBAI 400 093 PAN AACCP7114 K . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 3(2)(1), MUMBAI . RESPONDENT ITA NO.3627/MUM./2015 ( ASSESSMENT YEAR : 20 09 10 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 3(2)(1), MUMBAI . APPELLANT V/S JABIL CIRCUIT INDIA PVT. LTD. ARENA HOUSE, PLOT NO.103 ROAD NO.12, OPP. TULIP TELECOM MAROL MIDC, ANDHERI (E) MUMBAI 400 093 PAN AACCP7114K . RESPONDENT ASSESSEE BY : SHRI NILU JAGGI REVENUE BY : SHRI NIT ESH JOSHI DATE OF HEARING 20 . 02 .201 9 DATE OF O RDER 20.03.2019 O R D E R PER SAKTIJIT DEY, J.M. THESE ARE BUNCH OF THREE APPEALS AND A CROSS OBJECTION. WHILE A SET OF CROSS APPEALS AND CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R/W SECTION 144C(13) JABIL CIRCUIT INDIA PVT. LTD. 3 OF THE I NCOME TAX ACT, 1961 (FOR SHORT THE ACT ) FOR ASSESSMENT YEAR 2011 12, THE APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2009 10 ARISES OUT OF ORDER DATED 16 TH MARCH 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 56, MUMBAI. 2 . SINCE THE APPEALS RELAT E TO THE SAME ASSESSEE AND INVOLVE COMMON ISSUES, THEY HAVE BEEN CLUBBED TOG ETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.3627/MUM./2015 REVENUES APPEAL A.Y. 2009 10 3 . THE DISPUTE IN THE PRESENT AP PEAL BY THE REVENUE IS CONFINED TO DELETION OF ADDITION OF ` 1,07,28,467. 4 . BRIEF FACTS ARE, IN THE COURSE OF PROCEEDINGS BEFORE HIM, THE TRANSFER PRICING OFFICER NOTICED THAT THE ASSESSEE HAS REIMBURSED AN AMOUNT OF ` 9,27,27,628, TO ITS ASSOCIATED ENTERPR ISE S (A E) TOWARDS REIMBURSEMENT OF THI RD PARTY COST INCURRED BY THE AE ON BEHALF OF THE ASSESSEE. FROM THE TRANSFER PRICING STUDY REPORT, THE TRANSFER PRICING OFFICER FOUND THAT OUT OF THE AFORESAID AMOUNT, THE ASSESSEE HAS OFFERED AN AMOUNT OF ` 1,78,85,4 40, TO TAX BY NOT CLAIMING DEDUCTION. WHEREAS, THE BALANCE AMOUNT OF ` 7,48,42,181, WAS CLAIMED AS DEDUCTION ON THE REASONING THAT THEY ARE MERE REIMBURSEMENT OF COST WITHOUT ANY MARK UP. AFTER CALLING FOR NECESSARY DETAILS AND EXAMINING JABIL CIRCUIT INDIA PVT. LTD. 4 THEM, THE TRANSFER PRICING OFFICER OBSERVED THAT THE ASSESSEE COULD PROVIDE SAMPLE DETAILS ALONG WITH THIRD PARTY BREAK UP IN RELATION TO REIMBURSEMENT AMOUNTING TO ` 3,27,36,914. FURTHER, HE OBSERVED , IN RESPECT OF REIMBURSEMENT OF SALARY COST, THOUGH, THE ASSESSEE HAD PRO VIDED TDS CERTIFICATES IN FORM NO.16 RELATING TO SOME OF THE EXPATRIATES, HOWEVER, THE ASSESSEE COULD NOT FURNISH COMPLETE SUPPORTING DETAILS TO DEMONSTRATE THAT THE TRANSACTION WAS AT ARM'S LENGTH. THEREFORE, HE SUGGESTED AN ADJUSTMENT OF ` 5,99,91,047. T HE ADJUSTMENT PROPOSED BY THE TRANSFER PRICING OFFICER WAS ADDED IN THE ASSESSMENT ORDER. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 5 . L EARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD HELD THAT THE TRANSFER PRICING OFFICER HAD NEITHER POINTED OUT ANY DISCREPANCY IN THE DOCUMENTARY EVIDENCES FILED BEFORE HIM NOR HAD REQUIRED THE ASSESSEE TO PRODUCE ANY OTHER EVIDENCES. THUS, HE HELD THAT DI SALLOWANCE OF SALARY REIMBURSEMENT , IN TOTAL , IS UNJUSTIFIED. FURTHER, HE OBSERVED , AS PER FACTS ON RECORD, THE ASSESSEE COULD NOT FURNISH ANY SUPPORTING EVIDENCE WITH REGARD TO SALARY REIMBURSEMENT OF ` 78,45,266, TO THE AE JABIL CIRCUIT LTD. THEREFORE, H E HELD THAT THE AFORESAID AMOUNT OF ` 78,45,266, SHOULD BE CONSIDERED FOR TRANSFER PRICING ADJUSTMENT. JABIL CIRCUIT INDIA PVT. LTD. 5 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , BEFOR E THE FIRST APPELLATE AUTHORITY THE ASSESSEE HAS FURNISHED EVIDENCES TO RECONCILE THE DIFFERENCE S POINTED OUT BY THE TRANSFER PRICING OFFICER. HE SUBMITTED , THE DIFFERENCES POINTED OUT BY THE TRANSFER PRICING OFFICER WERE NEVER RECONCILED BY THE ASSESSEE BEFORE THE TRANSFER PRICING OFFICER. THEREFORE, ASSESSEES CLAIM SHOULD BE VERIFIED BY THE TRANSF ER PRICING OFFICER. FURTHER , HE SUBMITTED , THE DISCREPANCY IN THE NAME OF ONE EMPLOYEE APPEARING IN FORM NO.16, HAS NOT BEEN TAKEN NOTE OF BY THE FIRST APPELLATE AUTHORITY. THEREFORE, THE ISSUE HAS TO BE RESTORED BACK TO THE ASSESSING OFFICER FOR FRESH ADJ UDICATION. 7 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THOUGH IN FORM NO.16, THE PAN NUMBER OF THE CONCERNED EMPLOYEE WAS CORRECTLY SHOWN BUT THE NAME OF THE EMPLOYEE WAS WRONGLY MENTIONED AS S. KESAVAN INSTEAD OF K. SWAMINATHAN . HE SUBMITTED , TH E MISTAKE IN THE NAME IN FORM NO.16, ISSUED TO THE CONCERNED EMPLOYEE IS FURTHER EVIDENT FROM THE TDS CERT IFICATE ISSUED IN FORM NO.16, FOR ASSESSMENT YEA R 2011 12. FURTHER, LEARNED AUTHORISED REPRESENTATIVE REFERRING TO THE PAN VERIFICATION OF THE CONCERN ED EMPLOYEE SUBMITTED THAT THE PAN RELATES TO THE EMPLOYEE K SWAMINATHAN. THUS, HE SUBMITTED , SINCE THE MISMATCH/ DISCREPANCY WAS EXPLAIN ED WITH SUPPORTING EVIDENCE, LEARNED COMMISSIONER (APPEALS) HAS CORRECTLY DELETED THE ADJUSTMENT MADE BY THE TRANSFER PR ICING OFFICER. JABIL CIRCUIT INDIA PVT. LTD. 6 8 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN FROM THE GROUNDS RAISED BEFORE US, THE DISPUTE IS IN RELATION TO SALARY REIMBURSEMENT OF ` 1,07, 28,467, RELATING TO ONE OF T HE EXPATRIATE EMPLOYEE OF THE A E. IT IS NOTED , IN FORM NO.16, ISSUED TO THE CONCERNED EMPLOYEE FOR THE ASSESSMENT YEAR 2009 10, THE NAME OF THE EMPLOYEE HAS BEEN MENTIONED AS S. KESAVAN , FACTORY DIRECTOR, WHEREAS , THE PAN IS MENTIONED AS BBQPK3328F . WHEREAS, IN THE OTHER EVIDENCES SUBMITTED BY THE ASSESSEE, THE TRANSFER PRICING OFFICER FOUND THAT THE SALARY OF ` 1,07,28,467, WAS PAID TO PURSHOTHUMAN K. SWAMINATHAN, FACTORY DIRECTOR. T HEREFORE, DUE TO MISMATCH OF NAME IN FORM NO.16, AND THE OTHER DOCUMENTS, THE TRANSFER PRICING OFFIC ER MADE THE ADJUSTMENT. HOWEVER, FROM THE DOCUMENTARY EVIDENCES SUBMITTED IN THE PAPER BOOK, IT IS EVIDENT THAT THOUGH FORM NO.16, ISSUED FOR THE ASSESSMENT YEAR 2009 10, THE NAME OF THE CONCERNED FACTORY DIRECTOR HAS BEEN MENTIONED AS S. KESAVAN , HOWEVE R, IT APPEARS THAT SUCH NAME HAS BEEN WRONGLY MENTIONE D IN PLACE OF PURSHOTHUMAN K. SWAMINATHAN . THIS FACT IS EVIDENT FROM THE FORM NO.16, ISSUED FOR ASSESSMENT YEAR 2011 12, WHEREIN THE NAME OF THE EMPLOYEE HAS BEEN CORRECTLY MENTIONED AS PURSHOTHUMAN K. SWAMINATHAN . FURTHER, THE PAN OF THE EMPLOYEE MENTIONED IN FORM NO.16, MATCHES WITH THE PAN OF PURSHOTHUMAN K. SWAMINATHAN . THUS, THE DOCUMENTARY EVIDENCES CLEARLY D EMONSTRATE THE MISTAKE IN MENTIONING THE NAME OF THE JABIL CIRCUIT INDIA PVT. LTD. 7 EMPLOYEE IN FORM NO.16, ISSUED F OR THE ASSESSMENT YEAR 2009 10. HOWEVER, SINCE THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE AFORESAID MISTAKE THROUGH SUPPORTING EVIDENCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUNDS A RE DISMISSED. 9 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.1963/MUM./2016 ASSESSEES APPEAL A.Y. 2011 12 10 . GROUNDS NO.1, BEING GENERAL IN NATURE DOES NOT REQUIRE ADJUDICATION. 11 . ON THE INSTRUCTIONS OF THE ASSESSEE, THE LEARNED AUTHORISED REPRESEN TATIVE DID NOT PRESS GROUND NO.3. ACCORDINGLY, GROUND NO.3, IS DISMISSED. 12 . GROUND NO.4 CHALLENGING INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT BEING PREMATURE AT THIS STAGE , DOES NOT REQUIRE ADJUDICATION. 13 . THE ONLY SURVIVING GROUND IS GROUND NO.2, WHEREIN THE ASSESSEE HAS CHALLENGED ADDITION MADE OF ` 14,87,48,634, ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT ON INTRA GROUP SERVICES 14 . BRIEF FACTS ARE, THE ASSESSEE , AN INDIAN COMPANY , IS ENGAGED IN THE BUSINESS OF ASSEMBLY AND CUSTOMIZAT ION OF ALL TYPES, VARIETIES AND JABIL CIRCUIT INDIA PVT. LTD. 8 SPECIFICATIONS OF PRINTED CIRCUIT BOARDS AND SET TOP BOXES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH NOVEMBER 2011, DECLARING NIL INCOME UNDER THE NORMAL PROVISION. HOWEVER, THE ASSESSEE DECLARED BOOK PROFIT OF ` 73,72,52,231, UNDER SECTION 115JB OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS ENTERED INTO VARIOUS INTERNAT IONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES ( AE) MADE A REFERENCE TO THE TRANSFER PRICING OFFICER FOR DETERMINING THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION. IN THE COURSE OF PROCEEDINGS BEFORE HIM, THE TRANSFER PRICING OFFICER WHILE VERIFYING THE REPORT IN FORM NO.3CEB SUBMITTED BY THE ASSESSEE NOTICED THAT THE ASSESSEE HAS PAID CORPORATE ALLOCATION FEE AMOUNTING TO ` 15,32,53,694, TO THE AE TOWARDS SERVICES UTILIZED FROM THEM. THE TRANSFER PRICING OFFICER OBSERVED , SUCH PAYMENTS WERE MADE FOR THE FIRST TIME IN THE IMPUGNED ASSESSMENT YE AR. ON GOING THROUGH THE TRANSFER PRICING STUDY REPORT HE FOUND THAT THE ASSESSEE HAS BENCH MARKED THE AFORESAID TRANSACTIONS AT ENTITY LEVEL. AFTER VERIFYING THE DETAILS, HE OBSERVED THAT THE TRANSACTION RELATING TO CORPORATE SERVICE PAYMENT BEING A DISTIN CT INTERNATIONA L TRANSACTION NEEDS TO BE BENCH MARKED SEPARATELY. SINCE , THE ASSESSEE HAS NOT CARRIED OUT SEPARATE BENCH MARKING , THE TRANSFER PRI CING OFFICER REJECTED THE BENCH MARKING DONE BY THE ASSESSEE. HAVING DONE SO, HE CALLED UPON THE ASSESSEE TO FURN ISH COMPLETE SET OF DOCUMENTATION TO JABIL CIRCUIT INDIA PVT. LTD. 9 DEMONSTRATE FULFILLMENT OF BENEFIT TEST AND FURTHER TO EXPLAIN WHY THE CORPORATE A LLOCATION CHARGES PAID TO THE AE SHOULD NOT BE DISALLOWED AND THE ARM'S LENGTH PRICE BE DETERMINED AS NIL ON FAILURE TO DEMONSTRATE THE B ENEFIT RECEIVED. IN RESPONSE TO THE QUERY RAISED BY THE TRANSFER PRICING OFFICER, THE ASSESSEE MADE DETAILED SUBMISSIONS EXPLAINING THE NAT URE OF SERVICES RECEIVED FROM A E. IT WAS SUBMITTED , THE PAYMENTS MADE WERE FOR RECEIVIN G BUSINESS SUPPORT SERVICES, I NFORMATION TECHNOLOGY (IT) SUPPORT SERVICES, OPERATIONS AND LOGISTIC SERVIC ES ETC . AFTER EXAMINING THE SUBMISSIONS OF THE ASSESSEE AND THE DOCUMENTS FILED BEFORE HIM, THE TRANSFER PRICING OFFICER OBSERVED THAT EXCEPT FURNISHING CERTAIN E MAIL CORRESPONDENC ES, PRINT OUT OF SCREEN SHOTS REGARDING INFORMATION SERVICES, THE ASSESSEE COULD NOT DEMONSTRATE THAT SERVICES WERE AVAILED BY THE ASSESSEE WITH REGARD TO BUSI NESS SUPPORT SERVICES AND IT SERVICES. HE FURTHER OBSERVED , THE ASSESSEE ALSO COULD NOT DEMONSTRA TE THROUGH PROPER DOCUMENTARY EVIDENCES THAT IT HAS RECEIVED OPERATION AND LOGISTIC SERVICES AND BUSINESS DEVELOPMENT SERVICES. THE TRANSFER PRICING OFFICER OBSERVED , THE ASSESSEE WAS UNABLE TO FURNISH ANY EVIDENCE TO DEMONSTRATE THAT EITHER THE SERVICES W ERE AVAILED OR EVEN IF THEY WERE AVAILED , WHETHER THEY HAVE BENEFIT T ED THE ASSESSEE. HAVING HELD SO, HE OBSERVED , THE ARM'S LENGTH PRICE OF CORPORATE SUPPORT SERV ICES AVAILED FROM THE AE HAS TO BE BENCH MARKED BY APPLYING COMPARABLE UNCONTROLLED PRICE (CUP) METHOD. THE TRANSFER PRICING OFFICER OBSERVED , IN ABSENCE OF JABIL CIRCUIT INDIA PVT. LTD. 10 ANY EVIDENCE TO DEMONSTRATE THAT SERVICES WERE RENDERED BY THE AE, A REASONABLE ESTIMATE OF THE PRICE PAYABLE FOR SUCH SERVICES HAS TO BE MADE. ACCORDINGLY, BY APPLYING MAN HOUR RATE OF ` 8,500 PER HOUR, THE TRANSFER PRICING OFFICER ULTIMATELY DETERMINED THE ARM'S LENGTH PRICE OF THE SERVICES RENDERED BY THE AE AT ` 45,05,000. ACCORDINGLY, THE BALANCE AMOUNT OF ` 14,87,48,694, PAID TOWARDS COST ALLOCATION CHARGES WAS PROPOSED AS THE ADJUSTMENT TO BE MADE TO THE ARM'S LENGTH PRICE. ON THE BASIS OF THE ORDER PASSED BY THE TRANSFER PRICING OFFICER, THE ASSESSING OFFICER MADE THE ADDITION IN THE DRAFT ASSESSMENT ORDER. AGAINST SUCH ADDITION MADE IN THE DRAFT ASSESSMENT ORDER, THE ASSESSEE RAISED OBJEC TIONS BEFORE THE DRP. 15 . IN THE COURSE OF PROCEEDINGS BEFORE THE DRP, THE ASSESSEE FURNISHED CERTAIN ADDITIONAL EVIDENCES TO SUPPORT THE COST ALLOCA TION CHARGES PAID TO THE A E. ON THE BASIS OF THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE, THE DRP CALLED FO R A REMAND REPORT FROM THE TRANSFER PRICING OFFICER. AFTER CONSIDERING THE REMAND REPORT OF THE TRANSFER PRICING OFFICER AS WELL AS THE SUBMISSIO NS OF THE ASSESSEE, LEARNED DRP ULTIMATELY ENDORSED THE DECISION OF THE TRANSFER PRICING OFFICER AND ACCORDINGL Y SUSTAINED THE ADDITION MADE IN THAT BEHALF. 16 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , WITHOUT PROPERLY VERIFYING THE EVIDENCES FURNISHED BY THE ASSESSEE, THE DRP HAS SIMPLY ENDORSED THE VIEW EXPRESSED BY THE TRANSFER PRICING JABIL CIRCUIT INDIA PVT. LTD. 11 OFFICER. HE SUBMITTE D , COMPLETE DOCUMENTATION MAINTAINED BY THE ASSESSEE WITH REGARD TO COST ALLOCATION CHARGES WERE FURNISHED BEFORE THE DRP, HOWEVER, THE DRP HAS NOT AT ALL EXAMINED IN DETAIL SUCH DOCUMENTS FILED BY THE ASSESSEE. IN THIS REGARD, HE FURNISHED BEFORE THE BENC H A LIST OF DOCUMENTARY EVIDENCES SUBMITTED BEFORE THE TRANSFER PRICING OFFICER AND THE DRP TO JUSTIFY THE PAYMENT OF COST ALLOCATION CHARGES. HE ALSO FURNISHED THE DETAILS OF COST ALLOCATION KEYS FOR INTRA GROUP SERVICES. THE LEARNED AUTHORISED REPRESENTA TIVE SUBMITTED , RELYING UPON THE DRPS ORDER FOR THE I MPUGNED ASSESSMENT YEAR, WHILE DECIDING SIMILAR ISSUE IN ASSESSMENT YEAR 2012 13 AND 2013 - 14 , THE DRP HAS UPHEL D SIMILAR ADJUSTMENT MADE BY THE TRANSFER PRICING OFFICE R, T HOUGH, THE DRP ALLOW ED THE COS T ALLOCATION CHARGES FOR IT SUPPORT SERVICES. HE SUBMITTED , WHILE DECIDING ASSESSEES APPEAL ON THE ADJUSTMENT MADE TO THE ARM'S LENGTH PRICE OF INTRA GROUP SERVICES/ COST ALLOCATION CHARGES IN ASSESSMENT YEAR 2012 13 AND 2013 14, THE TRIBUNAL HAS DELETED T HE ADJUSTMENT MADE BY THE TRANSFER PRICING OFFICER AND SUSTAINED BY THE DRP. THUS, HE SUBMITTED , THE ISSUE STANDS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID DECISION OF THE TRIBUNAL. 17 . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELYIN G UPON THE OBSERVATIONS OF THE TRANSFER PRICING OFFICER AND THE DRP SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO DEMONSTRATE THAT SERVICES WERE ACTUALLY RENDERED BY THE AE AND THE ASSESSEE WAS BENEFIT TED FROM JABIL CIRCUIT INDIA PVT. LTD. 12 SUCH SERVICES , THE TRANSFER PRICING OFFICER WAS JUSTIFIED IN MAKING THE ADJUSTMENT. 18 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE VARIOUS DOCUMENTARY EVIDENCES SUBMITTED IN THE PAPER BOOK AND SPECIFICALLY REFERRED TO IN THE COURSE OF HEARING. IT IS EVIDENT , THE ASSESSEE HAS PAID AN AMOUNT OF ` 15,32,53,694, TOWARDS VARIOUS SUPPORT SERVICES PROVIDED BY ITS A E. IT IS ALSO EVIDENT , THE ASSESSEE HAS BENCH MARKED THE ARM'S LENGTH PRICE OF SUCH SERVICES IN THE TRANSFER PRICING STUDY REPORT. HOWEVER, THE TRANSFER PRICING OFFICER HAS REJECTED THE BENCHMARKING OF THE ASSESSEE POINTING OUT VARIOUS DISCREPANCIES , SUCH AS , LACK OF SUPP ORTING EVIDENCES TO DEMONSTRATE AVAILING OF SERVICES, FAILURE TO DEMONSTRATE THE BENEFIT DERIVED, ETC. HAVING DONE SO, THE TRANS FER PRICING OFFICER HAS PROCEEDED TO APPLY CUP METHOD TO BENCH MARK THE PRICE PAID FOR SUCH INTRA GROUP SERVICES. HOWEVER, WITH COMPLETE DISREGARD TO RULE 10B(1)(A) OF THE I.T. RULES, 1962, THE TRANSFER PRICING OFFICER HAS NOT BROUGHT EVEN A SINGLE INSTA NCE OF CUP TO SUPPORT HIS BENCH MARKING. RATHER, AS PER HIS OWN ADMISSION, THE TRANSFER PRICING OFFICER HAS PROCEEDED TO BENCH MARK THE ARM'S LENGTH PRICE OF INTRA GROUP SERVICES ON A REASONABLE ESTIMATION AND IN THE PROCESS HAS DETERMINED THE ARM'S LENGTH PRIC E OF THE INTERNATIONAL TRANSACTION AT ` 45,05,000. THUS, IT IS VERY MUCH CLEAR , THE BENCH MARKING DONE BY THE TRANSFER PRICING OFFICER IS NOT IN CONSONANCE WITH THE STATUTORY P ROVISION S . BE JABIL CIRCUIT INDIA PVT. LTD. 13 THAT AS IT MAY, LEARNED DRP HAS UPHELD THE BENCH MARKING DONE BY THE TRANSFER PRICING OFFICER BROADLY ON THE FOLLOWING GROUNDS: FROM THE AGREEMENT, IT IS NOT CLEAR WHICH GROUP ENTITY WILL PROVIDE WHICH SERVICE TO WHICH RECIPIENT; THE PERIOD OF VALIDITY OF THE AGREEMENT IS NOT MENTIONED; THOUGH, COST HAS BEEN CHARGED BY THE AE BY USING DIFFERENT ALLOCATION KEYS F OR EACH SERVICE, HOWEVER, THE DOCUMENTS ON THE BASIS OF WHICH SUCH COST HAS BEEN ALLOCATED EITHER TO THE ASSESSEE OR DIFFERENT ENTITIES HAVE NOT BEEN FURNISHED; CPA CERTIFICATE FURN ISHED TOWARDS ALLOCATION OF IT COST DOES NOT PROVIDE THE DETAILS FOR SUCH ALLOCATION; COST ALLOCATION FOR NON IT SERVICES ARE NOT SUPPORTED BY PROPER DOCUMENTARY EVIDENCES ; THOUGH, THE ASSESSEE HAS SHO WN INCURRING OF COST BY THE AE AS WELL AS ITS ALLOCATION AMONGST VARIOUS GROUP ENTI TIES BY FURNISHING THE CPA CERTIFICATE , BUT , IT HAS NOT P ROVIDED THE FINANCIALS OF THE AE TO SHOW THAT COSTS HAVE BEEN INCURRED AND THAT IT HAS BEEN CHARGED BY THE AE FOR THE SAME SERVICES; AND THE ASSESSEE, THROUGH PROPER DOCUMENTATION HAS FAILED TO PROV E THAT THE SERVICES HAVE ACTUALLY BEEN AVAILED AND IT HAS BENEFIT T ED THE ASSESSEE. 19 . THUS, ON THE BASIS OF THE AFORESAID REASONING, LEARNED DRP HAS UPHELD THE ADJUSTMENT PROPOSED BY THE TRANSFER PRICING OFFICER. NOTABLY, SIMILAR ADJUSTMENT WAS MADE TO THE A RM'S LENGTH PRICE OF JABIL CIRCUIT INDIA PVT. LTD. 14 INTRA GROUP SERVICES BY THE TRANSFER PRICING OFFICER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2012 13 AND 2013 14 ON IDENTICAL REASONING. LEARNED DRP WHILE DEALING WITH THE ISSUE IN THE AFORESAID ASSESSMENT YEARS , IN SUBSTANCE , HAS ADOPTED THE REASONING OF LEARNED DRP IN THE IMPUGNED ASSESSMENT YEAR , EXCEPT , IN C ASE OF PAYMENT MADE TOWARDS IT SUPPORT SERVICES. BE THAT AS IT MAY, WHILE DEALING WITH THE ISSUE RELATING TO THE AFORESAID ADJUSTMENT IN ASSESSMENT YEAR S 2012 13 AND 2013 14, THE TRIBU NAL DELETED THE ADDITION MADE WITH THE FOLLOWING OBSERVATIONS: 26. UPON CAREFUL CONSIDERATION, WE NOTE THAT THE ISSUE IN DISPUTE IS THE ALLOCATION OF INTRA GROUP SERVICES TO BE BORNE BY THE ASSESSEE FROM ITS AE IN 16 WORLDWIDE LOCALITIES. THE ASSESSEES ALLOCATION IS BASED UPON A GLOBAL AGREEMENT BETWEEN THE AES IN THIS REGARD. VARIOUS ALLOCATION KEYS, I.E., ASSET, REVENUE, NUMBER OF EMPLOYEE, DEPENDING UPON THE NATURE HAS BEEN USED. THE ALLOCATION IS SUPPORTED BY A CPA CERTIFICATE. THE REVENUE S GROUSE IS THAT NECESSARY EVIDENCE IN THIS REGARD FOR THE VERACITY OF ALLOCATION AND INCURRING OF EXPENDITURE HAS NOT BEEN SUBMITTED. THAT THE CPA CERTIFICATE IS NOT CREDIBLE IN ABSENCE OF SUPPORTING DOCUMENTS ON THE BASIS OF WHICH THE SAID CERTIFICATE W AS ISSUED. THAT THERE ARE SEVERAL ERRORS IN THE GLOBAL AGREEMENT. THAT THE USE OF ALLOCATION KEYS IS NOT PERMISSIBLE. THE SOLUTION FOUND BY THE TPO TO THE ABOVE SHORTCOMING IS THE REJECTION OF THE ASSESSEES ALLOCATION TO BE SUBSTITUTED BY AN ABSOLUTELY WHIMSICAL AND BIZARRE ESTIMATION THAT TOTAL 1500 MAN HOURS @ 8,500/ - WOULD ONLY BE PERMISSIBLE AND THAT WOULD BE ALLOCATED AS UNDER: IT SUPPORT SERVICE - 300 HOURS FINANCE SERVICE - 400 HOURS OTHER INTRA GROUP SERVICES FOR SALES, MARKETING, ETC . - 300 HOURS 27. WE FIND THAT THE LD. COUNSEL OF THE ASSESSEE HAS REFERRED TO THE VOLUMINOUS PAPER BOOK AND THE DOCUMENTS SUBMITTED BEFORE THE AUTHORITIES BELOW. THE SUMMARY OF THE SAME HAS ALSO BEEN REPRODUCED IN THE ABOVE PART CONTAINING THE SUMMARY OF THE LD . COUNSEL OF THE ASSESSEES SUBMISSION. WE HAVE REVIEWED JABIL CIRCUIT INDIA PVT. LTD. 15 THE CO - RELATION BETWEEN THE ITEM OF EXPENDITURE ALLOCATED AND THE SUPPORTING DOCUMENT MENTIONED IN THE PAPER BOOK. IN OUR CONSIDERED OPINION, THE SUPPORTING EVIDENCE SUBMITTED BY THE ASSESSEE ARE REA SONABLE AND COGENT. THE ADVERSE INFERENCE DRAWN BY THE AUTHORITIES BELOW THAT THE SUBMISSIONS OF THE ASSESSEE HAS NO EVIDENTIALLY VALUE IS TOTALLY MISPLACED AND IT IS A RESULT OF NON EXAMINATION OF EVIDENCES BY THE AUTHORITIES BELOW. IN THIS REGARD, WE DRA W SUPPORT FROM THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAERSK GLOBAL SERVICE CENTRE (IN ITA NO. 692 OF 2012 VIDE ORDER DATED 22.08.2014). IN THIS CASE, THE HON'BLE JURISDICTIONAL HIGH COURT HAS EXPOUNDED THAT IN A SITUATION WHE RE THE DETAILS WERE VERY MUCH BEFORE THE TPO, THE HONBLE HIGH COURT HELD THAT THE TRIBUNAL THEREFORE, DID NOT AND RIGHTLY PERMITTED THE DR TO ARGUE THE APPEAL CONTRARY TO THE RECORD. THAT THE APPEAL THEREFORE DID NOT RAISE ANY SUBSTANTIVE QUESTION OF LAW AND DESERVES TO BE DISMISSED. THE RATIO FROM THE ABOVE SAID DECISION IS APPLICABLE ON THE PRESENT CASE ALSO. THE NECESSARY EVIDENCE HAS ALSO BEEN BROUGHT ON RECORD BY THE ASSESSEE. THE AUTHORITIES BELOW HAVE TOTALLY DISREGARDED THE SAME AND MADE THE ALLOCA TION ON THE BASIS OF A TOTAL BIZARRE AND WHIMSICAL METHOD. THE BIZARRENESS AND WHIMSICAL NATURE OF THE ALLOCATION DONE BY THE TPO WHICH HAS BEEN SUPPORTED BY THE DRP IS NOT LOST UPON THE LD. DR WHO HAS ARGUED FOR A REMAND FOR PROPER APPRECIATION BY THE TPO . IN VIEW OF THE AFORESAID HON'BLE JURISDICTIONAL HIGH COURT DECISIONS WE ARE OF THE CONSIDERED OPINION THAT SUCH AN ACT OF TPO AND DRP CANNOT BE SET RIGHT BY REMITTING THE ISSUE ON THIS ACCOUNT. 28. WE NOTE THAT IT IS THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE HAS INTRA GROUP AES SPREAD AROUND THE LENGTH AND BREADTH OF THE GLOBE. IT HAS BEEN CLAIMED THAT THE INTRA GROUP SERVICES HAVE BEEN ALLOCATED ON THE BASIS OF GLOBAL AGREEMENT AMONG THE AES. PROPER ALLOCATION KEYS HAVE BEEN USED AND THAT THE METHODO LOGY ADOPTED HAS THE MANDATE OF GUIDING OF THE OECD. IN THIS REGARD, WE NOTE THAT IN THE OECD GUIDELINES IN THE CHAPTER VII RELATING TO SPECIAL CONSIDERATION FOR INTRA GROUP SERVICES HAS OBSERVED THAT MAINLY TWO ISSUES WERE TO BE CONSIDERED, ONE WAS WHETHE R INTRA GROUP SERVICE HAVE IN FACT BEEN PROVIDED. THE OTHER ISSUE IS WHETHER THE INTRA GROUP CHARGE FOR SUCH SERVICES FOR TAX PURPOSE SHOULD BE IN ACCORDANCE WITH THE ARMS LENGTH PRINCIPLE. THE OECD GUIDELINES INTERALIA ALSO PROVIDE THAT THE ALLOCATION OF THE GROUP COST MIGHT BE BASED UPON THE TURNOVER OR STAFF EMPLOYED OR SOME OTHER BASIS. IT MENTIONED THAT WHETHER THE ALLOCATION METHOD IS APPROPRIATE MAY DEPEND UPON THE NATURE AND USE OF THE SERVICES. A READING OF THIS OECD GUIDELINES MAKES IT ABUNDANTLY CLEAR THAT CONTRARY TO THE REVENUES ARGUMENT, THE USING OF ALLOCATION KEYS FOR ALLOCATION OF INTRA GROUP SERVICES IS NOT ALIEN TO INTERNATIONAL TAX JURISPRUDENCE. FURTHER, THE ALLOCATION OF JABIL CIRCUIT INDIA PVT. LTD. 16 CONCERNED GROUP EXPENSES TO DIFFERENT ACCOUNTING UNITS IS A DULY ACCEPTED ACCOUNTING PROCEDURE. FURTHERMORE, THE ASSESSEE HAS USED A CPA CERTIFICATE FOR THE ALLOCATION OF INTRA GROUP SERVICES FROM THE AE. THE AUTHORITIES BELOW HAVE REJECTED THE CPA CERTIFICATE ON THE GROUND THAT UNDERLYING DOCUMENTS ON THE BASIS OF WHIC H THE CPA CERTIFICATE HAS BEEN ISSUED HAS NOT BEEN PRODUCED BEFORE THEM. IN THIS REGARD, WE NOTE THAT THE CPA CERTIFICATE IS QUITE SPECIFIC AND HAS BEEN DULY AUTHENTICATED. WE FIND THAT IN RULE 10D, CONTAINING INFORMATION AND DOCUMENTS TO BE KEPT AND MAINT AINED U/S.92D IT HAS BEEN DULY MENTIONED THAT THE INFORMATIONS REQUIRED UNDER RULE 10D(2)(A) SHALL BE SUPPORTED BY AUTHENTIC DOCUMENTS WHICH MAY INCLUDE INTER ALIA PUBLIC ACCOUNTS AND THE FINANCIAL STATEMENTS RELATING TO THE BUSINESS OF THE ASSOCIATED ENT ERPRISES. HENCE, THE EVIDENCE FOR INTERNATIONAL TRANSACTION CAN BE DULY SUPPORTED BY PUBLIC ACCOUNTS AND FINANCIAL STATEMENTS RELATING TO BUSINESS AFFAIRS OF THE AE. WITH SUCH MANDATE OF LAW, IN OUR CONSIDERED OPINION, THE ACTION OF THE AUTHORITIES BELOW I N REJECTING THE CPA CERTIFICATE IS NOT SUSTAINABLE. THE VARIOUS OTHER PROPOSITION MENTIONED BY THE LD. COUNSEL OF THE ASSESSEE AND CASE LAWS IN SUPPORT THEREOF AS NOTED IN PARA 22 HEREINABOVE ARE GERMANE AND DULY SUPPORT THE CASE OF THE ASSESSEE. 29. WE F URTHER NOTE THAT AS REGARDS THE ESTIMATION AND ALLOCATION OF IT COST IS CONCERNED, THE SAME HAS BEEN DULY ACCEPTED FOR THE DISPUTE RESOLUTION PANEL FOR A.Y. 2013 - 14 AND THE REVENUE HAS ACCEPTED THE SAME. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND P RECEDENT, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. HENCE, THE TRANSFER PRICING ADJUSTMENT STANDS DELETED. 20 . ON CAREFUL PERUSAL OF THE ORDER OF THE TRIBUNAL, IT IS NOTICED THAT THE RELEVANT FACTS INVOL VED IN THE IMPUGNED ASSESSMENT YEAR AND ASSESSMENT YEAR S 2012 13 AND 2013 14 ARE ALMOST IDENTICAL. MOREOVER, WHILE DELETING SIMILAR ADDITIONS MADE IN ASSESSMENT YEARS 2012 13 AND 2013 14 THE TRIBUNAL HAS DEALT WITH ALL THE REASONING OF LEARNED DRP ON THE B ASIS OF WHICH ADDITION WAS SUSTAINED IN THE IMPUGNED ASSESSMENT YEAR. IN FACT, LIKE THE DOCUMENTATION MAINTAINED AND FURNISHED BEFORE THE DEPARTMENTAL AUTHORITIES IN ASSESSMENT YEAR S JABIL CIRCUIT INDIA PVT. LTD. 17 2012 13 AND 2013 14, AS REPRODUCED IN PARA 21 OF THE AFORESAID ORDER OF T HE TRIBUNAL , THE ASSESSEE HAS MAINTAINED AND PRODUCED SIMILAR DOCUMENTS BEFORE THE DEPARTMENTAL AUTHORITIES , WHICH IS EVIDENT FROM THE DETAILS AND FACTUAL PAPER BOOK FILED BEFORE US. 21 . THUS, IT IS NOTICED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES, THE TR IBUNAL WHILE CONSIDERING THE ISSUE IN ASSESSMENT YEARS 2012 - 13 AND 2013 - 14 HAS DELETED THE ADDITION MADE ON ACCOUNT OF ADJUSTMENT MADE TO THE ARM'S LENGTH PRICE OF INTRA GROUP SERVICES. NO MATERIAL DIFFERENCE IN FACTS BETWEEN THE IMPUGNED ASSESSMENT YEAR A ND ASSESSMENT YEAR S 2012 13 AND 2013 14, HAVE BEEN BROUGHT TO OUR NOTICE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE, WE DELETE THE ADDITION MADE OF ` 14,87,48,637. GROUND IS ALLOWED. 22 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ITA NO.1848/MUM./2016 REVENUES APPEAL A.Y. 2011 12 23 . THOUGH, THE REVENUE HAS RAISED THREE EFFECTIVE GROUNDS, HOWEVER, THE ONLY COMMON ISSUE ARISING THEREIN RELATES TO DELETION OF ADDITION MADE OF ` 11,66,18,461, UNDER SECTION 41(1) OF THE ACT. 24 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS OF SUNDRY JABIL CIRCUIT INDIA PVT. LTD. 18 CREDITORS APPEARING IN THE BALANCE SHEET. MORE SPECIFICALLY, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE LIST OF SUNDRY CREDITORS WHICH ARE OUTSTANDING FOR MORE THAN THREE YEARS AND FURTHER , TO EXPLAIN WHY SUCH OUTSTANDING SUNDRY CREDITORS SHOULD NOT BE ADDED BACK TO THE INCOME OF TH E ASSESSEE UNDER SECTION 41(1) OF THE ACT. THOUGH, THE ASSESSEE OBJECTED TO THE PROPOSED ADDITION, HOWEVER, THE ASSESSING OFFICER ADDED BACK SUNDRY CREDITORS AMOUNTING TO ` 11,66,18,461, WHICH HAS REMAINED OUTSTANDING FOR MORE THAN THREE YEARS TO THE INCOM E OF THE ASSESSEE UNDER SECTION 41(1) OF THE ACT. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE DRP. 25 . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, LEARNED DRP FOUND THAT OUT OF THE TOTAL SUND RY CREDITORS APPEARING IN THE BOOKS OF ACCOUNT AN AMOUNT OF ` 6,65,11 ,456, HAS EITHER BEEN PAID BACK TO THE CREDITORS OR WRITTEN BACK AS INCOME BY DECEMBER 2014. FURTHER, LEARNED DRP FOUND THAT THE ASSESSEE HAS ALSO ACKNOWLEDGED THE DEBT IN ITS BOOKS OF AC COUNT . THEY ALSO FOUND THAT THE ASSESSEE HAS FURNISHED NOT ONLY DETAILS OF OUTSTANDING SUNDRY CREDITORS BUT THE REASON FOR NON PAYMENT OF DUES BEFORE THE ASSESSING OFFICER. THEY ALSO FOUND THAT THE OUTSTANDING SUNDRY CREDITORS LARGELY BELONG TO JABIL GROUP OF COMPANIES AND THE ASSESSEE COULD NOT PAY THE CREDITORS BECAUSE IT WAS NOT IN A GOOD FINANCIAL POSITION. ON THE BASIS OF AFORESAID FACTS, LEARNED DRP OBSERVED THAT WHEN THE ASSESSEE HAS ACCEPTED ITS LIABILITY AND THE JABIL CIRCUIT INDIA PVT. LTD. 19 CREDITORS HAVE NOT WRITTEN OFF / REM ITTED THE OUTSTANDING AMOUNT IN THEIR BOOKS, PROVISIONS OF SECTION 41(1) OF THE ACT CANNOT BE INVOKED. THEREAFTER, RELYING U PON CERTAIN JUDICIAL PRECEDENTS LEARNED DRP, ULTIMATELY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 26 . THE LEARNED DEPARTMENTA L REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER , WHEREAS , LEARNED AUTHORISED REPRESENTATIVE STRONGLY RELYING UPON THE OBSERVATIONS OF LEARNED DRP SUBMITTED THAT THE ASSESSING OFFICER HAS ADDED BACK THE OUTSTANDING SUNDRY CREDITORS UN DER SECTION 41(1) OF THE ACT MERELY BECAUSE THEY HAVE REMAINED OUTSTANDING FOR MORE THAN THREE YEARS. HE SUBMITTED , THE ASSESSEE HAS EITHER SQUARED OFF OR WRITTEN BACK THE ENTIRE OUTSTANDING SUNDRY CREDITORS BY END OF DECEMBER 2018. THUS, HE SUBMITTED , THE ADDITION MADE BY THE ASSESSING OFFICER IS MER ELY ON PRESUMPTION AND SURMISES, HENCE, NOT SUSTAINABLE. FURTHER , HE SUBMITTED , SIMILAR ADDITION MADE BY THE ASSESSING OFFICER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010 11 WAS DELETED BY THE TRIBUNAL SINC E THE ONLY REASON ON THE BA S IS OF WHICH THE ASSESSING OFFICER HAD MADE THE ADDITION IS , THE SUNDRY CREDITORS HAVE REMAINED OUTSTANDING . 27 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. A READING OF THE ASSESSMENT ORDER MAKES IT CLEAR T HAT THE ONLY REASON ON WHICH THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION IS, THE SUNDRY CREDITORS HAVE REMAINED OUTSTANDING FOR MORE JABIL CIRCUIT INDIA PVT. LTD. 20 THAN THREE YEARS. HOWEVER, BEFORE INVOKING THE PROVISIONS OF SECTION 41(1) OF THE ACT, THREE CONDITIONS HAVE TO BE SATISFIED. FIRSTLY, THE CREDIT AMOUNT MUST HAVE ARISEN IN THE ORDINARY COURSE OF BUSINESS , SECONDLY, THE ASSESSEE MUST HAVE RECEIVED THE BENEFIT EITHER IN CASH OR IN KIND A S A RESULT OF REMISSION OR CESSATION OF LIABILITY AND THIRDLY, SUCH BENEFIT HAS ACC RUED TO THE ASSESSEE IN THAT PARTICULAR ASSESSMENT YEAR. ON A CAREFUL READING OF THE ASSESSMENT ORDER, WE DO NOT FIND ANY F ACTUAL BASIS UPON WHICH THE ASSESSING OFFICER HAS DEMONSTRATED THAT THE CONDITIONS OF SECTION 41(1) ARE SATISFIED. MERELY BECAUSE THE SUNDRY CREDITORS ARE OUTSTANDING FOR MORE THAN THREE YEARS, IT CANNOT BE SAID THAT THERE IS REMISSION/ CESSATION O F LIABIL ITY. MOREOVER , THE FACTS ON RECORD CLEARLY REVEAL THAT IN SUBSEQUENT PERIOD THE LIABILITY ON ACCOUNT OF OUTSTANDING SUNDRY CREDITOR HA S EITHER BEEN PAID OR WRITTEN BACK IN THE BOOKS OF ACCOUNT. THE AFORESAID FACTUAL FINDING OF LEARNED DRP REMAINS UNCONTROVERTED BEFORE US. THAT BEING THE CASE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE DRP ON THE ISSUE. GROUNDS ARE DI SMISSED. 28 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. C.O. NO.165/MUM./ 2016 BY ASSESSEE 29 . IN VIEW OF OUR DECISION IN ITA NO.1848/MUM./2016 , THIS CROSS OBJECTION HAS BECOME INFRUCTUOUS, HENCE, DISMISSED. JABIL CIRCUIT INDIA PVT. LTD. 21 30 . IN THE RESULT, CROSS OBJECTION IS DISMISSED. 31 . TO S UM UP, ITA NO.3627/MUM./2015 IS DISMISSED; ITA NO.1963/MUM./2016 IS PARTLY ALLOWED; ITA NO.1848/MUM./2016 AND C.O. NO.165/MUM./2016, ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.03.2019 SD/ - M. BALAGANESH ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDIC IAL MEMBER MUMBAI, DATED: 20.03.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE S ECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI