Deputy Commissioner of Income-tax, V. Abicor Binzel Production (India) Pvt. Ltd., Pune

ITA 2248/PUN/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9514 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-01-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Transfer pricing; Opportunity of being heard; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2248 /P U N/201 4 / ASSESSMENT YEAR : 20 08 - 09 DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE ....... / APPELLANT / V/S. ABICOR BINZEL PRODUCTION (INDIA) PVT. LTD., SURVEY NO. 297, 298, 299, VILLAGE - URAWADE, TALUKA - MULASHI, PUNE - 412115 PAN : AACCA2959F / RESPONDENT ASSESSEE BY : S HRI DARPAN KIRPALANI REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 09 - 01 - 2018 / DATE OF PRONOUNCEMENT : 10 - 01 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - IT/TP, PUNE DATED 11 - 09 - 2014 FOR THE ASSESSMENT YEAR 2008 - 09. 2. SHRI DARPAN KIRPALANI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ASSESSEE HAS ENTERED INTO ADVANCE PRICING AGREEMENT (APA) WITH CENTRAL BOARD OF DIRECT TAXES (CBDT) ON 22 ND JANUARY, 2016 IN 2 ITA NO .2248/PUN/2014, A.Y. 2008 - 09 RESPECT OF ASSESSMENT YEARS 2014 - 15 TO 2018 - 19. THE TERMS AND CONDITIONS OF THE SAID AGREEMENT WOULD ALSO APPLY TO FOUR ROLLB ACK YEARS COMMENCING FROM THE YEAR 2010 - 111 TO 2013 - 14 AS WELL. THUS, THE AGREEMENT COVERS NINE ASSESSMENT YEARS STARING FROM ASSESSMENT YEARS 2010 - 11 TO 2018 - 19. THE INTERNATIONAL TRANSACTIONS UNDERTAKEN BY THE ASSESSEE FOR ASSESSMENT YEARS UNDER APPEA L ARE IDENTICAL TO THE ASSESSMENT YEARS WHICH ARE PART OF APA PROCEEDINGS. THUS, TP ADJUSTMENT, IF ANY, ARE TO BE MADE THEY SHALL BE IN SAME TERMS AS HAS BEEN AGREED BY ASSESSEE IN APA PROCEEDINGS. 2.1 THE LD. AR FURTHER SUBMITTED THAT THE CO - ORDINATE BE NCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.2253 TO 2255/PUN/2014 FOR ASSESSMENT YEARS 2005 - 06 TO 2007 - 08 DECIDED ON 15 - 12 - 2017 AND IN ITA NO.139/PN/2014 FOR ASSESSMENT YEAR 2009 - 10 HAVE REMITTED THE ISSUE BACK TO THE FILE OF TRANSFER PRICING OFF ICER (TPO) FOR APPLYING THE TERMS AND CONDITIONS OF APA. 3. DR. VIVEK AGGARWAL REPRESENTING THE DEPARTMENT FAIRLY ADMITTED THAT THE ASSESSEE HAS ENTERED INTO AN APA AND THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS AND IN THE SUBSEQUENT ASSESSMENT YEAR HA S DIRECTED TO APPLY APA , PROVIDED THE INTERNATIONAL TRANSACTIONS CARRIED OUT BY THE ASSESSEE ARE OF SIMILAR NATURE. 4. BOTH SIDES HEARD. IN THE ASSESSMENT YEARS UNDER APPEAL THE ASSESSEE HAD ENTERED INTO FOLLOWING INTERNATIONAL TRANSACTIONS WITH THE AE : NATURE OF TRANSACTIONS AMOUNT (RS.) PURCHASE OF RAW MATERIAL AND COMPONENTS 8,55,81,127 SALE OF FINISHED GOODS RECEIVED 12,24,17,172 SALE OF FINISHED GOODS RECEIVABLE 7,29,13,588 PURCHASE OF TOOLS, LABEL PRINTING SOFTWARE, RENT FOR VIDEO CONFERENCING SYSTEM AND CALENDARS 6,08,673 TOTAL 28,15,20,560 3 ITA NO .2248/PUN/2014, A.Y. 2008 - 09 IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS ENTERED INTO APA WITH CBDT ON 22 ND JANUARY, 2016. THE TRIBUNAL IN THE APPEALS BY THE ASSESSEE IN ITA NOS.2253 TO 2255/PUN/2014 (SUPRA) HAD MADE SIMILAR PRAYER FOR APPLYING THE TERMS AND CONDITIONS OF APA. 5. THE TRIBUNAL REMITTED THE ISSUE BACK TO TPO/AO WITH THE FOLLOWING OBSERVATIONS : 5. IN THE LIGHT OF FACT THAT ASSESSEE HAS ENTERED INTO APA, THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSMENT YEAR 2009 - 10 HAS DIRECTED ASSESSING OFFICER TO DECIDE THE ISSUE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF APA AS NATURE OF TRANSACTI ONS ARE SIMILAR. THE RELEVANT EXTRACT OF FINDINGS OF THE TRIBUNAL ON THIS ISSUE ARE AS UNDER: 8. THE PERUSAL OF GROUNDS OF APPEAL REFLECTS THAT THE ASSESSEE IS IN APPEAL ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT MADE IN THE HANDS OF ASSESSEE. NO OTHER GROUNDS OF APPEAL HAVE BEEN RAISED BY THE ASSESSEE OTHER THAN TRANSFER PRICING ADJUSTMENT. THE ASSESSEE HAS MADE A REQUEST SINCE IT HAD ENTERED INTO ADVANCE PRICING AGREEMENT (APA) WITH CBDT COVERING NINE YEARS FROM ASSESSMENT YEARS 2010 - 11 TO 2013 - 14 UND ER ROLL BACK PROVISIONS AND FROM ASSESSMENT YEARS 2014 - 15 TO 2018 - 19 BEING THE BALANCE APA PERIOD, SIMILAR PROPOSITION SHOULD BE APPLIED TO THE YEAR UNDER CONSIDERATION ALSO AS THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH ITS ASSOCIATE ENTERPRISES IN THE INSTANT ASSESSMENT YEAR ARE IDENTICAL TO THE INTERNATIONAL TRANSACTIONS WHICH WERE PART OF APA PROCEEDINGS. THE DCIT(TP) 1(1), PUNE HAS SUBMITTED A REPORT DATED 13.07.2016, IN WHICH IT HAS BEEN STATED THAT THE INTERNATIONAL TRANSACTIONS DURING THE ASSESSMENT YEAR 2009 - 10 WERE SIMILAR TO THE INTERNATIONAL TRANSACTIONS ENTERED DURING ASSESSMENT YEARS 2010 - 11 TO 2015 - 16. IN VIEW THEREOF, WHERE THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH ITS ASSOCIATE ENTERPRISES ARE SI MILAR TO THE INTERNATIONAL TRANSACTIONS IN THE SUCCEEDING YEARS, THEN WHERE THE APA PROCEEDINGS HAVE BEEN CARRIED OUT IN THE CASE OF ASSESSEE AND THE BOARD AND THE ASSESSEE HAVE COME TO A SETTLEMENT VIS - - VIS THE MANNER OF COMPUTATION OF ARM'S LENGTH PRICE IN THE CASE OF ASSESSEE IN RELATION TO THE INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATE ENTERPRISES, WE DEEM IT FIT TO RESTORE THIS ISSUE ALSO BACK TO THE FILE OF ASSESSING OFFICER, WHO SHALL CONSIDER THE PLEA OF ASSESSEE AND SHALL AFTER OBTAINING REPORT FROM THE TPO IN THIS REGARD, DECIDE THE ISSUE IN ACCORDANCE WITH LAW. REASONABLE OPPORTUNITY OF BEING HEARD SHALL BE AFFORDED TO THE ASSESSEE WHILE DECIDING THE ISSUE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. IN RESPECT OF THE BA LANCE ADDITIONS, NO SPECIFIC GROUND OF APPEAL HAS BEEN RAISED NOR ANY ARGUMENTS HAVE BEEN MADE BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, HENCE THE SAME ARE NOT DISTURBED. IN VIEW OF THE FACTS DISCUSSED ABOVE, WE ARE OF CONSIDERED OPINION THAT IT WOULD BE JUST AND PROPER TO RESTORE THESE ISSUES TO THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTIONS AS ABOVE BY THE TRIBUNAL IN ASSSESSEES APPEAL FOR ASSESSMENT YEAR 2009 - 10. WE FURTHER FIND FORCES IN THE SUBMISSION OF LD. DR THAT BEFORE DE CIDING THE ISSUES RAISED IN APPEALS UNDER CONSIDERATION, IT WOULD BE RELEVANT TO ASCERTAIN THE NATURE OF INTERNATIONAL TRANSACTIONS THAT HAVE BEEN CARRIED OUT DURING ASSESSMENT YEARS 2005 - 06 TO 2007 - 08. IF THEY ARE OF SIMILAR NATURE, THE SAME CAN BE DECIDE D AFRESH IN LINE WITH THE TERMS AND CONDITIONS OF APA. THE APPEALS OF THE ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSE WITH AFORESAID DIRECTIONS. 4 ITA NO .2248/PUN/2014, A.Y. 2008 - 09 6. THE ASSESSMENT YEAR UNDER APPEAL IS INTERVENING THE TWO ASSESSMENT YEARS WHERE THE TRIBUNAL HAS DIRECTED TO FOLLOW THE TERMS AND CONDITIONS OF APA FOR MAKING TRANSFER PRICING ADJUSTMENT , IF ANY . SINCE, BOTH THE SIDES ARE UNANIMOUS IN ADMITTING THAT THE ISSUE IN THE PRESENT APPEAL IS SIMILAR TO ASSESSMENT YEARS 2005 - 06 TO 2007 - 08 , WE DEEM IT APPROPRI ATE TO DISPOSE OF THIS APPEAL WITH SIMILAR DIRECTIONS. THUS, THE APPEAL OF DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSE WITH THE DIRECTIONS AS STATED IN THE ORDER OF TRIBUNAL FOR ASSESSMENT YEARS 2005 - 06 TO 2007 - 08 IN THE APPEALS BY ASSESSEE . 7. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 10 TH DAY OF JANUARY, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 10 TH JANUARY, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - IT/TP, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE