CITI FINANCIAL INSURANCE SERVICES (INDIA) LTD, MUMBAI V. ACIT CIR 6(2), MUMBAI

ITA 2663/MUM/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79024 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 27-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 27-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: ARVIND SONDE
• Keywords: Transfer pricing
• Section: 37

Judgement Text

K IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI .. , , BEFORE SHRI P.M. JAGTAP, AM AND SHRI. SHRI AMIT SHU KA, JM ./ I.T.A. NO.2663 /MUM/2009 ( / ASSESSMENT YEAR : 2003-2004 M/S CITI FINANCIAL INSURANCE SERVICES (INDIA) LTD., C/O CITIBANK NA, CITIGROUP CENTRE, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI. / VS. A.C.I.T. CIRCLE 6(2) 65, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. ./ PAN : AABCC8249F ( # / APPELLANT ) .. ( $%# / RESPONDENT ) A PPELLANT BY SHRI ARVIND SONDE R E SPONDENT BY : SHRI SURENDRA KUMAR ) * / DATE OF HEARING : 27-5-2014 ) * / DATE OF PRONOUNCEMENT : 28-5-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A) - VI, MUMBAI DATED 27-2-2009 WHEREBY HE CONF IRMED THE PENALTY OF RS. 94,81,500/- IMPOSED BY THE A.O. U/S 271(1)(C) OF TH E INCOME TAX ACT, 1961 IN RESPECT OF ADDITION OF RS. 2,58,00,000/- MADE TO TH E TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DISALLOWANCE OF REFERRAL FEE . 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ADDITION OF RS. 2,58,00,000/- MADE BY THE A.O. AND CONFIRMED ITA 2663/M/09 2 BY THE LD. CIT(A) ON ACCOUNT OF DISALLOWANCE OF REF ERRAL FEE WAS DISPUTED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 4 TH OCTOBER, 2013 PASSED IN ITA NO. 1916/MUM/2007 SET ASIDE THE MATTER TO THE LD. CIT(A) FOR DECIDING THE SAME AFRESH VIDE PARA 8 OF ITS ORDER WHICH READS AS UNDER:- 8. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE AR E OF THE CONSIDERED VIEW THAT THE ENTIRE ISSUE IS REQUIRED T O BE CONSIDERED AFRESH REGARDING THE FINDING ON THE ASPECT OF RENDERING OF SERVICES BY THE CITI BANK, NA AND THE NATURE OF SERVICES. WE NOTE THAT THE ASSESSEE FILED CERTAIN DETAILS REGARDING TOP 25 CASES WHICH WERE R EFERRED BY THE CITI BANK, NA BUT THE AUTHORITIES BELOW DID NOT EXAMINE THE RELEVANT RECORD. ACCORDINGLY, IN THE INTEREST OF JUSTICE WE SET ASIDE THIS ISSUE TO THE RECORD OF THE VCIT(A) TO ADJUDICATE THE MATTER AFRESH BY CONSIDERING WHETHER ANY SERVICES HAS BEEN RENDERED BY THE CITI BANK, NA IRRESPECTIVE OF AGREEMENT IN QUESTION FOR ALLOWING THE CLAIM U/S 37 AND FURTHER THE ISSUE OF TRANSFER PRICING TO BE ADJUDIC ATED BY TAKING INTO CONSIDERATION THE SUITABLE COMPARABLE AND MOST APPR OPRIATE METHOD. 3. KEEPING IN VIEW THE ORDER PASSED BY THE TRIBUNAL IN THE QUANTUM PROCEEDING AS ABOVE SETTING ASIDE THE ISSUE RELATIN G TO DISALLOWANCE MADE ON ACCOUNT OF REFERRAL FEE TO THE LD. CIT(A), THE LD. REPRESENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THE CONSEQUENTIAL ISSUE INVO LVED IN THE PRESENT APPEAL RELATING TO IMPOSITION OF PENALTY IN RESPECT OF DIS ALLOWANCE ON ACCOUNT OF REFERRAL FEE SHOULD ALSO BE SET ASIDE TO THE LD. CI T(A). ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) CONFIRMING THE PENALTY IMPOSED BY THE A.O. U/S 271(1)(C) OF THE ACT IN RESPECT OF DISALLO WANCE MADE ON ACCOUNT OF REFERRAL FEE AND REMIT THE MATTER BACK TO THE LD. C IT(A) FOR DECIDING THE SAME AFRESH DEPENDING ON THE DECISION IN THE QUANTUM PRO CEEDING ON THE ISSUE OF DISALLOWANCE OF REFERRAL FEE ON MERIT. ITA 2663/M/09 3 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MAY, 2014. ) / 0 28-05-2014 ) SD/- SD/- (AMIT SHUKLA) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 0 DATED 285552014 [ .../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $%# / THE RESPONDENT. 3. () / THE CIT(A)VI, MUMBAI. 4. / CIT CITY -6, MUMBAI 5. < $> , * > , / DR, ITAT, MUMBAI KD BENCH 6. A / GUARD FILE. / BY ORDER, %< $ //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI