Deputy Commissioner of Income-tax, Circle - 2, Jalgaon V. Jain Irrigation System Ltd, Jalgaon

ITA 2343/PUN/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6882 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 05-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRASHANT S MAHESHWARI
• Keywords: Depreciation; Transfer pricing; International transaction; Bad and doubtful debts; Assessment record; Revised return
• Section: 143(3); 14A; 144C; 13; 92CA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO S.2343 & 2336 /PUN/201 7 / ASSESSMENT YEAR S : 2010 - 11 & 2011 - 12 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 2, JALGAON ...... / APPELLANT / V/S. JAIN IRRIGATION SYSTEM LTD., PLASTIC PARK, N.H. 6, BAMBHORI, DISTT. - JALGAON PAN : AAACJ7163Q / RESPONDENT ASSESSEE BY : SHRI PRASHANT S. MAHESHWARI REVENUE BY : SHRI NAVIN GUPTA / DATE OF HEARING : 0 8 - 01 - 2021 / DATE OF PRONOUNCEMENT : 28 - 01 - 2021 / ORDER PER S.S. VISWANETHRA RAVI, JM : TH ESE TWO APPEALS BY THE REVENUE ARE AGAINST THE COMMON ORDER DATED 19 - 07 - 2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2, NASHIK [CIT(A)] FOR ASSESSMENT YEARS 2010 - 11 AND 2011 - 12. 2. WE FIND THAT THE ISSUES RAISED IN BOTH APPEALS ARE SIMILAR, BASED SAME IDENTICAL FACTS EXCEPT VARIANC E AT DISALLOWANCES. WITH THE CONSENT OF 2 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 BOTH THE PARTIES, WE PROCEED TO HEAR BOTH THE APPEALS TOGETHER AND TO PASS A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. FIRST , WE SHALL TAKE UP THE APPEAL IN ITA NO. 2343/PUN/2017 FOR A.Y. 2010 - 11. ITA NO. 2343/PUN/2017, (A.Y. 2010 - 11) 4. GROUND NOS. 1 AND 2 RAISED BY THE REVENUE ARE AGAINST THE ACTION OF CIT(A) IN QUASHING THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5 . THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A COMPANY AND FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 196,19,84,080/ - . AGAIN THE ASSESSEE FILED REVISED RETURN OF INCOME ON 29 - 12 - 2011. FOR THE SECOND TIME AGAIN FILED REVISED RETURN OF INCOME DECL ARING THE TOTAL INCOME AT RS.158,36,43,921/ - ON 30 - 03 - 2012 , A GAINST WHICH THE AO DETERMINED THE TOTAL INCOME AT RS.2,00,93,67,780/ - INTER ALIA MAKING DISALLOWANCE AS UNDER : 1 . ON A/C OF DEPRECIATION ON NON COMPETE FEE RS.10,28,322/ - 2 . INCOME AS PER TRANSFER PRICING ORDER RS.43,67,625/ - 3 . ON A/C OF FOREIGN EXCHANGE LOSS RS.69,33,357/ - 4 . ON A/C OF BAD DEBTS RS.11,52,165/ - 5 . INT. U/S. 36(1)(III) RS.1,13,77,407/ - 6 . DISALLOWANCE U/S. 14A RS.6,343/ - 7 . RENT PAID (INT. ON WALKESHWAR FLAT DEP) RS.68,40,000/ - 8 . INTEREST ON DEPOSIT RS.37,11,295/ - 9 . RENT PAID (FAMILY MEMBER) RS.13,95,832/ - 3 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 6. CHALLENGING THE ACTION OF AO, THE ASSESSEE RAISED 7 GROUNDS OF APPEAL BEFORE THE CIT(A). THE GROUNDS FORMING PART AND PARCEL OF FORM NO. 35 ARE AS UNDER : 1. REJECTION OF CLAIM FOR DEPRECIATION ON NON COMPETE FEE RS.10,28,322/ - 2. DISALLOWANCE OF FOREIGN EXCHANGE LOSS OF RS.69,33,357/ - . 3. DISALLOWANCE OF INTEREST OF RS.1,13,77,407/ - U/S. 36(I)(III). 4. DISALLOWANCE OF RS.68,40,000/ - OUT OF INTEREST PAID. 5. DISALLOWANCE OF RS.37,11,295/ - OUT OF INTEREST. 6. REJECTION OF CLAIM FOR DEDUCTION OF RS.33,41,09,821/ - U/S. 80IB(IIA). 7. CONSIDERATION OF C/F OF UNABSORBED CAPITAL LOSS RS.4,15,15,549/ - . 7. THE PLAIN READING OF ABOVE GROUNDS RAISED BY THE ASSESSEE BEFORE THE CI T(A) CLEARLY ESTABLISHES THAT THERE WAS NO GROUND QUESTIONING THE ACTION OF AO FOR MAKING UPWARD TRANSFER PRICING ADJUSTMENT IN RESPECT OF INTERNATIONAL TRANSACTIONS BUT HOWEVER THE ASSESSEE RAISED ADDITIONAL GROUND OF APPEAL CHALLENGING THE VALIDITY OF AS SESSMENT ORDER PASSED U/S. 143(3) OF THE ACT FOR NOT FOLLOWING MANDATORY PROVISIONS OF SECTION 144C(1) OF THE ACT. 8. THE ASSESSEE REQUESTED THE CIT(A) TO TAKE UP THE ADDITIONAL GROUND STATING THAT IT IS LEGAL GROUND, CONSIDERING THE SAME U/S. 250(5) OF THE ACT , THE CIT(A) HELD THAT NO N FILING OF SAID GROUND AT THE TIME OF FILING OF APPEAL IS NOT WILLFUL AND PROCEEDED TO DISPOSE OF THE ADDITIONAL GROUND. 9. PARA NO. 6 OF THE IMPUGNED ORDER REVEALS THAT THE ASSESSEE HAS CLAIMED THAT THE AO PROCEEDED TO PASS FINAL ASSESSMENT ORDER U/S. 143(3) OF THE ACT ON RECEIPT OF THE ORDER U/S. 92CA(3) OF THE ACT WITHOUT PASSING DRAFT ORDER AS REQUIRED U/S. 144C(1) OF THE ACT. FURTHER, IT WAS CONTENDED IT IS INCUMBENT UPON THE AO TO FORWARD A DRAFT ASSESSMENT ORDER U/S. 144C(1) OF THE ACT TO THE ASSESSEE , IF THE AO PROPOSES TO MAKE ANY ADDITION 4 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 ON THE BASIS OF ORDER PASSED BY THE TPO U/S. 92CA(3) OF THE ACT. IT IS CLAIMED THAT THE AO HAS FAILED TO FORWARD SUCH DRAFT ORDER PRIOR TO PASSING THE FINAL ASSESSMENT ORDER , THE WHOLE ASSESSMENT PROCEEDINGS BECOME A NULLITY AND THE ASSESSMENT ORDER BECOMES VOID - AB - NITIO. FURTHER, IT WAS CONTENDED NON - PASSING OF DRAFT ASSESSMENT ORDER BY THE AO, THE RIGHT OF SEEKING DIRECTION FROM DRP HAS INFRINGED , INTER ALIA CHALLENGING THE ACTION OF AO IN RESPECT OF OTHER ADDITIONS. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF INTERNATIONAL AIR TRANSPORT ASSOCIATION VS. DCIT REPORTED IN 290 CTR 46 AND ORDER OF PUNE TRIBUNAL IN THE CASE OF SOKT AS INDIA PVT. LTD. V S . ACIT IN ITA NO. 206/PN/2015, ORDER DATED 09 - 12 - 2016. THE CIT(A) EXAMINED THE ASSESSMENT RECORD AND OBSERVED THAT THERE WAS NO REFERENCE MADE BY THE AO TO ANY DRAFT ASSESSMENT ORDER IN THE ORDER PASSED U/S. 144C(1) OF THE ACT AND NO MENTION OF ANY DRAFT ASSESSMENT ORDER FORWARD ED TO THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 144C(1) OF THE ACT. HE HELD THAT THE AO FAILED TO PASS ON ANY DRAFT ASSESSMENT ORDER TO THE ASSESSEE. THE CIT(A) DISCUSSED THE PROVISIONS OF SECT ION 144C OF THE ACT AND IN PARA 6.3 , HE HELD THE AO DID NOT FOLLOW THE PROCEDURE LAID DOWN U/S. 144C(1) OF THE ACT AND THE SAID VIOLATION WOULD GO TO THE VERY FOUNDATION AND ROOT OF THE ASSESSMENT AND THE ENTIRE ASSESSMENT PROCEEDINGS SHALL BE RENDERED NUL L AND VOID IN LAW. 10. THE CIT(A) TAKEN REFERENCE TO THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF INTERNATIONAL AIR TRANSPORT ASSOCIATION (SUPRA) WHICH HELD THAT THE FORWARDING OF DRAFT ASSESSMENT ORDER U/S. 144C(1) IS A MANDATORY REQUIRE MENT STIPULATED BY THE ACT, THE SAME IS NOT A PROCEDURAL FORMALITIES, THEN THE ASSESSMENT ORDER BECOMES INVALID AND ILLEGAL FOR NON - ISSUANCE OF DRAFT ASSESSMENT ORDER . 5 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 11. FURTHER, HE REFERRED TO THE ORDER OF PUNE TRIBUNAL IN THE CASE OF SOKTAS INDIA PVT . LTD. (SUPRA) WHICH HELD THAT THE COMPLIANCE OF SECTION 144C OF THE ACT IS MANDATORY IF THE TPO PROPOSES VARIATION IN THE INCOME. 12. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THE FACTS BEFORE THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF INTERNATIONAL AIR TRANSPORT ASSOCIATION (SUPRA) ARE THAT THE ASSESSEE THEREIN IS A FOREIGN COMPANY AND GOVERNED BY SECTION 144C(1) OF THE ACT, THEREOF THE AO IS REQUIRED TO PASS A DRAFT ASSESSMENT ORDER U/S. 144C(1) OF THE ACT BEFO RE PASSING A FINAL ORDER U/S. 143(3) OF THE ACT , THE AO PASSED FINAL ASSESSMENT ORDER U/S. 143(3) OF THE ACT ON 23 - 03 - 2015 WITHOUT THERE BEING DRAFT ASSESSMENT ORDER . THE ASSESSEE FILED OBJECTION IN TERMS OF SECTION 144C(2) OF THE ACT TO THE DISPUTE RESOLUTION PANEL (DRP). THE DRP REFUSED TO PASS ANY DIRECTION ON THE OBJECTIONS BECAUSE THE OBJECTIONS HAD BEEN FILED IN RESPECT OF A FINAL ORDER NOT UNDER DRAFT ASSESSM ENT ORDER U/S. 144C(1) OF THE ACT. THE HONBLE HIGH COURT OF BOMBAY WAS PLEASED TO FIND SUPPORT FROM THE UNREPORTED DECISION IN THE CASE OF ZUARI CEMENT LTD. VS. ACIT (WRIT PETITION NO.5557 OF 2012) OF HONBLE HIGH COURT OF ANDHRA PRADESH AND CONSEQUENTLY THE DISMISSAL OF SLP BY THE HONBLE SUPREME COURT QUASHED THE FINAL ASSESSMENT ORDER DATED 23 - 03 - 2015 TREATING THE SAME WAS PASSED WITHOUT THERE BEING JURISDICTION. IN THE PRESENT CASE AS EMANATING FROM THE RECORDS THAT THE AO REFERRED THE INTERNATIONAL TRANSACTIONS FOR DETERMINATION OF ARMS LENGTH PRICE (ALP) TO THE TPO AND THE TPO SUGGESTED UPWARD ADJUSTMENT , THE AO SHOW CAUSED THE ASSESSEE ON THIS ISSUE. IN RESPONSE TO WHICH THE ASSESSEE FILED A LETTER DATED 24 - 02 - 2014 STATING AGREEING FOR THE SAID ADDITION RELATING TO UPWARD ADJUSTMENT SUGGESTED BY THE TPO. AS IT SHOWS THE ASSESSEE WAS IN THE IMPRESSION THAT NO PREJUDICE WILL CAUSE TO IT IF THE TP ADJUSTMENT IS 6 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 ACCEPTED. THE AO PASSED FINAL ASSESSMENT ORDER WITHOUT THERE BEING A DRAFT ASSESSMENT O RDER. THEREFORE, IN THE FACTS AND CIRCUMSTANCES BEFORE THE HONBLE HIGH COURT OF BOMBAY WHICH LE D TO QUASH FINAL ASSESSMENT ORDER TREATING THE SAME AS THERE BEING NO JURISDICTION ARE A SIMILAR IDENTICAL TO THE FACTS OF PRESENT CASE, THUS, THE PRINCIPLE LA ID DOWN BY THE HONBLE HIGH COURT OF BOMBAY IS APPLICABLE TO THE PRESENT CASE . 13. LET US EXAMINE THE DECISION OF HONBLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF ZUARI CEMENT LTD. (SUPRA). BRIEF FACTS, THE ASSESSEE THEREIN IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTUR E AND SALE OF CEMENT. THE AO, HAVING NOTICED, CERTAIN INTERNATIONAL TRANSACTIONS IN AUDIT REPORT , REFERRED THE CASE TO TPO U/S. 92CA OF THE ACT FOR DETERMINATION OF ALP. THE TPO PASSED ORDER UNDER SUB - SECTION (3) OF SECTION 92CA OF THE ACT RECOMMENDING UPWARD TP ADJUSTMENT. THE AO FORWARDED THE SAME TO THE ASSESSEE THEREIN. THE AO AFTER EXAMINATION OF INFORMATION FURNISHED BY THE ASSESSEE THEREIN FROM TIME TO TIME PASSED FINAL ASSESSMENT ORDER ON 23 - 12 - 2011 U/S. 143(3) OF THE ACT. THE ASSESSEE THEREIN RAISED OBJECTIONS TO THE SAID ASSESSMENT ORDER VIDE LETTER DATED 20 - 01 - 2012 CONTENDING THE PROVISIONS CONTEMPLATED U/S. 144C WAS NOT FOLLOWED. THE AO BY TAKING REFERENCE TO CIRCULAR NO. 5/2010 ISSUED BY THE CBDT HELD THE PROVISIONS U /S. 144C ARE NOT APPLICABLE TO THE YEAR UNDER CONSIDERATION BUT HOWEVER GIVEN AN OPPORTUNITY TO THE ASSESSEE TO MAKE HIS SUBMISSIONS. THE HONBLE HIGH COURT DISCUSSED THE PROVISIONS U/S. 144C AND THE FACTS IN DETAIL AND DECLARED THE FINAL ASSESSMENT ORDER DATED 23 - 12 - 2011 AS ONE WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEABLE. AS DISCUSSED ABOVE THE FACTS OF THE CASE THEREIN ARE SIMILAR TO THE FACTS OF THE PRESENT CASE . 7 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 14. THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2009 - 10 QUASHED THE ASSESSMENT ORDER DATED 21 - 03 - 2013 TREATING THE SAME AS BAD IN LAW. WE NOTE THAT IN THAT CASE THE TPO HAD PASSED ORDER U/S. 92CA(3) OF THE ACT ON 28 - 01 - 2013, WHEREIN UPWARD TP ADJUSTMENT WAS SUGGESTED. THE AO PASSED ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE ACT. AGAINST THE ORDER OF CIT(A), CROSS APPEALS WERE FILED BY THE ASSESSEE AS WELL AS REVENUE BEFORE THIS TRIBUNAL. THE ASSESSEE RAISED ADDITIONAL GROUND BEFORE THIS TRIBUNAL REQUE STED TO TAKE UP AS PRELIMINARY ISSUE AS IT IS A LEGAL GROUND. ACCORDINGLY, THIS TRIBUNAL ADMITTED THE SAID ADDITIONAL GROUND AND ADJUDICATED THEREUPON. WE NOTE THAT THE ASSESSEE CONTENDED THAT THE AO HAS FAILED TO FOLLOW THE MANDATORY PROVISIONS OF SECTI ON 144C OF THE ACT, WITHOUT ISSUING ANY DRAFT ASSESSMENT ORDER, PASSING OF FINAL ASSESSMENT ORDER SUFFERS FROM INFIRMITY AND TO BE TREATED THE SAME AS BAD IN LAW. THIS TRIBUNAL DISCUSSING THE PROVISIONS U/S. 144C OF THE ACT AND HELD THE FINAL ASSESSMENT O RDER PASSED BY THE AO WITHOUT ISSUING DRAFT ASSESSMENT ORDER IS AGAINST THE PROVISIONS OF THE ACT. 15. THIS TRIBUNAL PLACED RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF PR. CIT VS. LIONBRIDGE TECHNOLOGIES (P.) LTD. REPORTED IN (2018) 100 TAXMANN.COM 413 (BOM). THIS TRIBUNAL DISCUSSED THE SAME IN DETAIL IN PARA NO. 13 AND OBSERVED THAT THE HONBLE BOMBAY HIGH COURT IN LIONBRIDGE TECHNOLOGIES (P.) LTD. (SUPRA) PLACED RELIANCE IN THE CASE OF INTERNATIONAL AIR TRANSPORT ASSOCIATIO N (SUPRA) WHICH HELD THAT THE DRAFT ASSESSMENT ORDER IS NECESSARY IN TERMS OF SECTION 144C(1) OF THE ACT BEFORE THE AO CAN PROCEED TO PASS FINAL ASSESSMENT ORDER. WE NOTE THAT THE ASSESSEE ACCEPTED THE UPWARD TP ADJUSTMENT IN RELATING TO INTERNATIONAL TRA NSACTIONS BY WAY OF VIDE ITS COMMUNICATION AS THAT OF IN THE PRESENT CASE INVOLVING A.YS. 2010 - 11 AND 2011 - 12. THIS TRIBUNAL 8 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 CONSIDERED THE SUBMISSIONS OF REVENUE THAT HAVING PARTICIPATED FOR THE ASSESSMENT PROCEEDINGS THE ASSESSEE IS ESTOPPE D FROM CHALLE NGING THE ACTION OF AO FOR NON - ISSUANCE OF DRAFT ASSESSMENT ORDER. THE TRIBUNAL DISCUSSED THE SAME AND OBSERVED WHERE MERE CONSENT OF PARTIES DOES NOT BESTOW THE JURISDICTION IF THE ORDER IS BEYOND JURISDICTION. THE RELEVANT PORTION FROM PARA NOS. 13 TO 16 OF ORDER DATED 01 - 08 - 2019 IN ITA NO. 739/PUN/2015 FOR A.Y. 2009 - 10 IN ASSESSEES OWN CASE ARE REPRODUCED HERE - IN - BELOW FOR READY REFERENCE : 13. THE HONBLE BOMBAY HIGH COURT IN PR.CIT VS. LIONBRIDGE TECHNOLOGIES (P.) LTD. (SUPRA) HAVE LAID DOWN THE P ROPOSITION THAT IN TERMS OF SECTION 144C(1) OF THE ACT, THE ASSESSING OFFICER IS TO FIRST PASS A DRAFT ASSESSMENT ORDER WHICH IS SUBJECT TO CHALLENGE, BY WAY OF REPRESENTATION TO THE DRP. IT IS ONLY AFTER DRP DISPOSES OF REPRESENTATION, THAT ASSESSING OFFI CER PASSES A FINAL ORDER IN TERMS OF DIRECTIONS OF DRP AND SUCH FINAL ORDER IS APPEALABLE TO THE TRIBUNAL. IN THE FACTS BEFORE THE HONBLE BOMBAY HIGH COURT A FINAL ORDER WAS PASSED WITHOUT PASSING ANY DRAFT ASSESSMENT ORDER AND THE SAME WAS SOUGHT TO BE C ORRECTED BY ISSUE OF CORRIGENDUM ON A DATE AFTER THE TIME TO PASS DRAFT ASSESSMENT ORDER HAD EXPIRED. THEN, RELIANCE WAS PLACED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN INTERNATIONAL AIR TRANSPORT ASSOCIATION VS. DCIT (2016) 68 TAXMANN.COM 246 (BOM) , WHEREIN IT WAS HELD THAT DRAFT ASSESSMENT ORDER IS NECESSARY IN TERMS OF SECTION 144C(1) OF THE ACT BEFORE THE ASSESSING OFFICER CAN PROCEED TO PASS FINAL ASSESSMENT ORDER. IT WAS HELD THAT IN THE ABSENCE THEREOF, ORDER IS WITHOUT JURISDICTION. THE HONB LE BOMBAY HIGH COURT IN THE FACTS BEFORE IT IN PR.CIT VS. LIONBRIDGE TECHNOLOGIES (P.) LTD. (SUPRA) DID NOT ACCEPT THE CONTENTION ON BEHALF OF REVENUE THAT THE RESPONDENT WAS ESTOPPED FROM CHALLENGING THE CORRIGENDUM, WHICH WAS PASSED AFTER THE DATE OF PAS SING OF DRAFT ASSESSMENT ORDER, AS IT WAS ACCEPTED BY IT AND REPRESENTATION WAS ALSO FILED TO THE DRP. THE HONBLE BOMBAY HIGH COURT HELD THIS SUBMISSION OVERLOOKS THE FACT THAT THERE CAN BE NO ESTOPPEL ON ISSUE OF LAW PERTAINING TO JURISDICTION. IT WAS FU RTHER HELD THAT IF THE CORRIGENDUM AND THE ORDER PASSED BY ASSESSING OFFICER WAS WITHOUT JURISDICTION, THE SAME CAN BE RAISED AT ANY TIME AND THE PRINCIPLE OF ESTOPPEL WILL NOT APPLY. MERE CONSENT OF PARTIES DOES NOT BESTOW THE JURISDICTION IF THE ORDER IS BEYOND JURISDICTION. 14. APPLYING THE SAID PROPOSITION TO THE FACTS OF PRESENT CASE AND MAINLY RELYING ON THE PROPOSITION THAT MERE CONSENT OF PARTIES DOES NOT BESTOW THE JURISDICTION, WHERE THE ORDER IS BEYOND JURISDICTION. WE HOLD THAT EVEN IF ASSESSEE HAD ACCEPTED ADDITION TO BE MADE ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT, DURING ASSESSMENT PROCEEDINGS, WOULD NOT BESTOW THE JURISDICTION UPON THE ASSESSING OFFICER AND FINAL ASSESSMENT ORDER PASSED IN THE CASE CANNOT BE UPHELD IN LAW, IN THE ABSENCE O F ASSESSING OFFICER PASSING DRAFT ASSESSMENT ORDER, WHICH IS ENVISAGED AS PER SECTION 144C(1) OF THE ACT. ACCORDINGLY, WE HOLD THAT ASSESSMENT ORDER PASSED IN THE CASE IS WITHOUT JURISDICTION AND BAD IN LAW. 15. THE STAND OF REVENUE IN THIS CASE THAT THE ASSESSEE HAVING PARTICIPATED IN ASSESSMENT PROCEEDINGS AND HENCE, THE ERROR, IF ANY, STANDS CORRECTED, DO NOT STAND IN VIEW OF THE DICTATE OF THE HONBLE BOMBAY HIGH COURT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS ALSO RELIED ON THE DECI SION OF TRIBUNAL IN DCIT VS. MAGNA INTERNATIONAL INC. (SUPRA), WHEREIN THE FACTS ARE AT VARIANCE. SINCE THE ASSESSEE SUO MOTU IN GOOD FAITH CLAIMS TO HAVE OFFERED ADDITIONAL INCOME TO TAX AT THE BEGINNING OF ASSESSMENT PROCEEDINGS ITSELF, THE SAID INCOME W AS ASSESSED IN THE HANDS OF ASSESSEE AND THE TRIBUNAL HELD THAT VARIATION IN INCOME WAS NOT ON ACCOUNT OF ANY ADDITION MADE BY THE ASSESSING OFFICER BUT WAS ON ACCOUNT OF VOLUNTARY OFFER OF ADDITIONAL INCOME BY THE 9 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 ASSESSEE AND IT COULD NOT BE SAID THAT TH E ASSESSING OFFICER HAD MADE VARIATION IN THE INCOME RETURNED, WHICH WAS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. THEN THE ISSUE WAS DECIDED ON MERITS OF THE SAID CASE. HOWEVER, THE SAID PROPOSITION DOES NOT HOLD GOOD AS THE FACTS ARE AT VARIANCE. 16 . WE FURTHER FIND THAT SIMILAR ISSUE OF ASSESSING OFFICER HAVING PASSED FINAL ASSESSMENT ORDER UNDER SECTION 143(3) MAKING CERTAIN ADJUSTMENTS TO ASSESSEES ARM'S LENGTH PRICE WITHOUT PROCESSING DRAFT ASSESSMENT ORDER, THE TRIBUNAL IN SOKTAS INDIA (P.) LTD . VS. ACIT (SUPRA) IT WAS HELD THAT THE SAID ORDER BEING AGAINST PROVISIONS OF SECTION 144C OF THE ACT. IN VIEW OF OUR SETTING ASIDE THE ASSESSMENT ORDER PASSED IN THE CASE UNDER SECTION 143(3) OF THE ACT, THE GROUNDS OF APPEAL RAISED BY ASSESSEE ON MERITS AND THE GROUNDS OF APPEAL RAISED BY REVENUE BECOME ACADEMIC IN NATURE AND THE SAME ARE DISMISSED. 16. IN THE LIGHT OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND IT IS JUSTIFIED. THUS, THE GROUND NOS. 1 AND 2 RAISED BY THE REVENUE ARE DISMISSED. 17. GROUND NOS. 3 AND 4 RAISED BY THE REVENUE BECOME ACADEMIC IN VIEW OF OUR DECISION IN QUASHING THE FINAL ASSESSMENT ORDER DECLARING VOID UNDER LAW. HENCE, NO ADJUDICATION IS REQUIRED AND ARE DISMISSED. 18. GROUND NOS. 5 AND 6 OF APPEAL ARE GENERAL IN NATURE, THUS, REQUIRE NO ADJUDICATION. 19. IN THE RESULT, THE APPEAL OF REVENUE IN ITA NO. 2343/PUN/2017 IS DISMISSED. ITA NO. 2336/PUN/2017, (A.Y. 2011 - 12) 20. BOTH SIDES ARE UNANIMOUS IN STATING THAT THE ISSUES RAISED IN THE APPEAL AND THE FACTS IN ITA NO. 2336/PUN/2 017 ARE IDENTICAL TO ITA NO. 2343/PUN/2017. SINCE, THE FACTS IN ITA NO. 2336/PUN/2017 ARE SIMILAR TO ITA NO. 2343/PUN/2017, THE FINDINGS GIVEN BY US WHILE DECIDING THE APPEAL OF REVENUE IN ITA NO. 2343/PUN/2017 WOULD MUTATIS MUTANDIS 10 ITA NO S.2343 & 2336/PUN/2017, A.YS. 2010 - 11 & 2011 - 12 APPLY TO ITA NO. 2336/PUN/2017, AS WELL . THE APPEAL OF REVENUE IS DISMISSED, ACCORDINGLY. 21. TO SUM UP, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2021. SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 28 TH JANUARY, 2021. RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) - 2, NASHIK 4. THE PR. CIT - 2, NASHIK 5. , , , / DR, ITAT, C BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE