Hyundai Motor India Engineering Private Limited , Hyderabad V. Dy. Commissioner of Income Tax , Circle-2(2), Hyderabad

ITA 205/Hyd/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3719 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 05-11-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 14-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Set aside
• Section: 143(3); 205; 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. M OH AN ALANKAMONY , ACCOUNTANT MEMBER (THROUGH VIRTUAL CONFERENCE) I TA - TP NO. 205/HYD/2020 ASSESSMENT YEAR: 2 014 - 15 HYUNDAI MOTOR INDIA ENGINEERING PVT. LTD., HYDERABAD. PAN A ABCH 7867C VS DY. COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), HYDERABAD. (APPELLANT) (RESPONDENT) DATE OF HEARING : 05 - 1 1 - 20 20 DATE OF PRONOUNCEMENT : 06 - 1 1 - 20 20 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS ASSESSEES APPEAL FOR AY 2014 - 15 A GAINST THE CONSEQUENTIAL ORDER OF AO DATED 26/11/2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , A PVT. LTD. COMPANY, FURNISHED IT S RETURN OF INCOME FOR AY 2014 - 15 ON 28/11/2014. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE IT ACT, THE AO NOTICED THAT THE ASSESSEE HAS ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS AE AND, THEREFORE, THE MATTER WAS REFERRED TO TPO U/S 92CA OF THE ACT FOR DETERMINATION OF THE FOR ASSESSEE : SHRI H. SRINIVASULU FOR REVENUE : SHR I K. RAVI KIRAN ITA NO . ITA - TP NO. 205 HYD/20 20 M/S HYUNDAI MOTOR INDIA ENGG. PVT. LTD., : - 2 - : ALP OF THE INTERNATIONAL TRANSACTION S . THE TPO PROPOSED ADJUSTMENT S TO THE ALP AND ACCORDINGLY, A DRAFT ASSESSMENT ORDER WAS PASSE D , AGAINST WHICH, THE ASSESSEE PREFERRED ITS OBJECTIONS TO THE DRP. IN ACCORDANCE WITH THE DRPS DIRECTIONS, FINAL ASSESSMENT ORDER WAS PASSED, AGAINST WHICH, ASSESSEE PREFERRED AN APPEAL IN ITA NO. 2303/HYD/2018 BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ITS ORDER DATED 02/08/2019, PARTLY ALLOWED THE APPEAL AND AS REGARDS GROUND NOS. 2, 3, 6, & 9, IT HAD DIRECTED THE TPO TO RECONSIDER WHETHER THE COMPANIES MENTIONED BY THE ASSESSEE IN THE SAID GROUNDS SATISFY THE FILTERS ADOPTED BY THE TPO AND ARE COMPARABLE TO THE ASSESSEE COMPANY. IN ACCORDANCE WITH THESE DIRECTIONS, THE TPO PASSED AN ORDER DAT ED 25/11/2019 AND IN ACCORDANCE WITH THE SAID ORDER, CONSEQUENTIAL ORDER DATED 26/11/2019 WAS PASSED BY THE AO. 3. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT THIS ORDER SHOULD HAVE BEEN PASSED AS A DRAFT ASSESSMENT ORDER, THEREBY, THE ASSES SEE WOULD GET AN OPPORTUNITY TO RAISE ITS OBJECTIONS BEFORE THE DRP AND THEREAFTER FINAL ASSESSMENT ORDER COULD BE PASSED. HOWEVER, FINAL CONSEQUENTIAL ORDER HAS BEEN PASSED. THEREFORE, HE SUBMITTED THAT THE SAID ORDER SHOULD BE QUASHED AND IN SUPPORT OF H IS THIS CONTENTION, HE PLACED RELIANCE UPON VARIOUS DECISION S . ITA NO . ITA - TP NO. 205 HYD/20 20 M/S HYUNDAI MOTOR INDIA ENGG. PVT. LTD., : - 3 - : 4. THE LD. DR, ON THE OTHER HAND, POINTED OUT THAT THE TRIBUNAL HAD ONLY DIRECTED THE TPO TO RECALCULATE THE ALP AFTER CONSIDERING THE COMPARABILITY OF THE COMPANIES, WHICH ASSESSEE WANTED TO BE INCLUDE D IN THE FINAL LIST OF COMPARABLES AND SINCE THERE WAS NO SET ASIDE OF THE ASSESSMENT BY THE TRIBUNAL , CONSEQUENTIAL ORDER HAS BEEN PASSED . 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES, IT IS OBSERVED THAT SINCE THE TRIBUNAL HAD SET ASIDE THE ISSUE TO THE FILE OF THE TPO, THE TPO OUGHT TO HAVE RECONSIDERED THE ISSUE AND PROPOSED A REVISED ADJUSTMENT AND THEREAFTER, THE AO OUGHT TO HAVE PASSED A FRESH DRAFT ASSESSMENT ORDER. B UT, THE DIRECTIONS OF THE TRIBUNAL HA VE NOT BEEN PROPERLY UNDERSTOOD BY THE AO. WE FIND THAT IN ACCORDANCE WITH THE DIRECTIONS OF THE TRIBUNAL, TH E TPO OUGHT TO HAVE CONSIDERED THE COMPARABILITY OF THE COMPANIES , WHICH THE ASSESSEE HAS PROPOSED FOR INCLUSI ON IN THE FINAL SET OF COMPARABLES, BUT, HE HAS REJECTED THE SAME WITHOUT GIVING THE ASSESSEE PROPER OPPORTUNITY. THEREFORE, AS AGREED TO BY BOTH THE PARTIES BEFORE US , WE SET ASIDE THE ISSUE OF COMPARABILITY AND INCLUSION OF THE COMPANIES MENTIONED AT GROUN D NOS. 2, 3, 6 9 TO THE FILE OF THE AO WITH A DIRECTION TO REMIT THE ISSUE TO THE FILE OF THE TPO FOR A DECISION ON THESE GROUNDS AND THEREAFTER, THE AO SHALL PASS A DRAFT ASSESSMENT ORDER IN ITA NO . ITA - TP NO. 205 HYD/20 20 M/S HYUNDAI MOTOR INDIA ENGG. PVT. LTD., : - 4 - : ACCORDANCE WITH THE PROVISIONS OF THE ACT, IN VIEW OF THE SAME, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER , 20 20 . SD/ - SD/ - ( A . M OH AN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDE RABAD, DATED : 6 TH NOVEMBER , 20 20 . KV C OPY TO : 1. M/S HYUNDAI MOTOR INDIA ENGG. PVT. LTD., SURVEY NO. 52 & 53, BACKSIDE OF NAC, OPP. HITECH MMTS STATION, IZZATNAGAR, LINGAMPALLY, HYDERABAD 500 084 2. DC IT , CIRCLE - 2 ( 2 ), SIGNATURE TOWERS, KONDAPUR HYDERABAD . 3 . DRP 1, BENGALURU 4 . D.R. ITAT, HYDERABAD. 5 . GUARD FILE.