M/s. Panasonic Consumer India Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 2328/DEL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7873 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2002-2003
• Appeal Filed On: 17-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI T.S. KAPOOR ITA NO. 2328/DEL/2010 ASSESSMENT YEAR: 2002-03 M/S. PANASONIC CONSUMER INDIA VS. ASSISTANT COMMIS SIONER OF IT, PVT. LTD., (FORMERLY) KNOWN AS CIRCLE 14(1), PANASONIC INDIA PVT. LTD., NEW DELHI. K-39, CONNAUGHT CIRCUS, N.DELHI. (PAN: AAACN1498G) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRADEEP DI NODIA, CA RESPONDENT BY: SHRI PRADEEP KUMA R, CIT(DR) ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 23.03.2010 PASSED FOR ASSESSMENT YEAR 2002-03. THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS.70,83,146 IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 29.10.2002 DECLARING A LOSS OF RS.473,88, 738. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) OF THE ACT WAS ISSUED ON 16.10.2003 WHICH WAS DULY SERVED UPON THE ASSESSEE. LEARNED ASSESSING OFFICER HAS MADE A REF ERENCE TO THE LEARNED TPO UNDER SECTION 92CA(3) IN RESPECT OF INTERNATION AL TRANSACTION. LEARNED 2 TPO HAS RECOMMENDED THE ADJUSTMENT REQUIRED TO BE M ADE IN THE ALP OF THE INTERNATIONAL TRANSACTION AND AN ADDITION OF RS .228,03,163 WAS MADE ON THAT BASIS. LEARNED ASSESSING OFFICER HAS ULTIMATE LY DETERMINED THE INCOME OF THE ASSESSEE AT RS.68,16,29,100. HE INITIATED TH E PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) OF THE ACT AND ISSUED NOTICE T O THE ASSESSEE. THE ASSESSING OFFICER HAS OBSERVED THAT LEARNED TPO HA S RECOMMENDED AN ADDITION OF RS.228,03,163 ON ACCOUNT OF TRANSFER PR ICING. LEARNED FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ADDITION TO T HE EXTENT OF RS.198,40,745 ON THIS ISSUE. ON THIS ADDITION, LEARNED ASSESSING OFFICER HAS IMPOSED A PENALTY OF RS.70,83,146. THE PENALTY HAS BEEN CONFI RMED BY THE LEARNED FIRST APPELLATE AUTHORITY. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ASSESSEE HAS CHALLENGED THE ADDITION MADE ON T HE BASIS OF THE LEARNED TPOS RECOMMENDATION AND THE ITAT HAS DELETED THE ADDITION ON THE APPEAL OF THE ASSESSEE. HE PLACED ON RECORD COPY OF THE IT ATS ORDER PASSED IN ITA NO. 1417/DEL/2008 AND ITA NO. 1373/DEL/2008. THESE ARE THE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE. THEY HAVE BEEN DIS POSED OF BY THE ITAT VIDE ORDER DATED 24 TH SEPTEMBER, 2010. IN PARAGRAPH N O.14, THE ITAT HAS OBSERVED THAT ADDITIONS MADE ON THE BASIS OF THE TP OS RECOMMENDATIONS DESERVES TO BE DELETED. HENCE, THE AMOUNT ON WHICH PENALTY HAS BEEN 3 IMPOSED STANDS DELETED. THE LEARNED COUNSEL FOR THE ASSESSEE PRAYED THAT ONCE QUANTUM ADDITION HAS BEEN DELETED, THERE CANNO T BE ANY PENALTY. LEARNED DR WAS UNABLE TO CONTROVERT THE CONTENTIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY SECTION 271(1)(C)(III) OF THE ACT CONTEMP LATES THAT THE ASSESSEE MAY BE DIRECTED TO PAY BY WAY OF A PENALTY, IN ADDI TION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE E VADED BY REASONS OF THE CONCEALMENT OF THE PARTICULARS OF HIS INCOME OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THUS, THE PENALTY IS TO BE COMPUTED ON THE TAX SOUGHT TO BE EVADED. IT CAN BE EQUIVALENT TO THE TA X SOUGHT TO BE EVADED OR THREE TIMES OF SUCH TAX. IN THE PRESENT SITUATION, ONCE ADDITION HAS BEEN DELETED THERE CANNOT BE ANY TAX SOUGHT TO BE EVADED ON WHICH PENALTY COULD BE COMPUTED. THEREFORE, NO PENALTY IS IMPOSABLE UPO N THE ASSESSEE. WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE PEN ALTY. DECISION PRONOUNCED IN THE OPEN COURT ON 15.06.201 2 SD/- SD/- ( T.S. KAPOOR ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/06/2012 MOHAN LAL 4 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR