NSK Barings Manufacturing India Pvt Ltd (Formerly Known as NSK-ABC Bearings Pvt Ltd), Sriperumbudur V. ACIT, Corporate Circle 4(2), Chennai

ITA 268/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7408 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJITH KUMAR CHORADIA
• Keywords: Depreciation; Transfer pricing; International transaction; Capital expenditure
• Section: 143(3); 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.268/CHNY/2018 ( / ASSESSMENT YEAR: 2009-10) M/S. NSK BEARINGS MANUFACTURING INDIA PVT. LTD., (FORMERLY KNOWN AS NSK-ABC BEARINGS PVT. LTD.,), NO.A2, SIPCOT ORAGADAM GROWTH CENTRE, MATHUR VILLAGE, SRIPERUMPUDUR TALUK, TAMILNADU 602 105. VS THE ACIT, CORPORATE CIRCLE 4(2), CHENNAI. PAN: AACCN2689K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI AJITH KUMAR CHORADIA, CA / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT /DATE OF HEARING : 03.07.2018 /DATE OF PRONOUNCEMENT : 10.07.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-8, CHENNAI, DATED 22.11.2017 IN ITA NO.52/13-14 FOR THE ASSESSMENT YEAR 2009-10 PASSED U/S.250(6) R.W.S. 143(3) OF THE ACT. 2 ITA NO.268/CHNY/2018 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 1. THE ORDER OF THE LD. AO AND LD. CIT(A) IS WRONG ON FACTS AND IN LAW. 2. THE LD. AO AND LD. CIT(A) ERRED IN HIS OBSERVATION THAT THE APPELLANT HAD CALLOUS AND INDIFFERENT ATTITUDE TOWARDS APPELLATE PROCEEDINGS AND NOT INTERESTED IN PURSUING THE APPEAL. 3. THE LD. AO AND LD. CIT(A) ERRED IN LAW AND ON FACTS BY DISREGARDING THE INFORMATION AND DOCUMENTS THAT WERE SUBMITTED BEFORE THE LD. AO AND LD. CIT(A), WHILE PASSING THE APPELLATE ORDER U/S 250 OF THE ACT. 4. THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY NOT PASSING THE ORDER U/S 250 OF THE ACT ON MERITS OF THE CASE. 5. THE LD. CIT(A) ) ERRED IN LAW AND ON FACTS BY PASSING THE ORDER U/S. 250 OF THE ACT, CONTRARY TO THE NOTICE DATED 1 ST NOVEMBER 2017. WITHOUT PREJUDICE TO THE ABOVE, 6. THE LD. AO AND LD. CIT(A) HAD ERRED IN LAW AND ON FACTS BY DISALLOWING THE PROPORTIONATE COST OF DEVELOPMENT CHARGES, STAMP DUTY AND REGISTRATION EXPENSES AGGREGATING INR 31,80,000/- INCURRED IN CONNECTION WITH THE LEASE AGREEMENT WITH SIPCOT BY TREATING THE SAME AS RELATABLE TO LAND. 7. THE LD. AO AND LD. CIT(A) HAD ERRED IN LAW AND ON FACTS BY NOT CONSIDERING THE FACT THAT, MAJORITY OF THE ASSETS WERE PUT TO USE ON OR BEFORE 1 ST APRIL 2008 OR BEFORE THE SHORT TERM LOAN WAS AVAILED IN INSTALMENTS AND DISALLOWING THE ENTIRE INTEREST EXPENDITURE INCURRED IN AY 2009-10 AGGREGATING INR 1,36,68,000/- AS CAPITAL EXPENDITURE. 8. WITHOUT PREJUDICE TO GROUND NO. 7, THE LD. AO AND LD. CIT(A) HAD ERRED IN LAW AND ON FACTS BY NOT ALLOWING DEPRECIATION U/S 32 OF THE ACT IN RELATION TO THE AMOUNT TREATED AS EXPENDITURE INCURRED IN CONNECTION WITH THE PURCHASE OF DEPRECIABLE ASSET. 9. THE LD. AO AND LD. CIT(A) HAD ERRED IN LAW AND ON FACTS BY DISALLOWING THE CLUB EXPENDITURE AGGREGATING INR 9,18,880/-. 3 ITA NO.268/CHNY/2018 10. THE LD. AO AND LD. CIT(A) HAS ERRED IN TREATING THE MANAGERIAL REMUNERATION PAID IN EXCESS OF LIMITS PRESCRIBED UNDER THE COMPANIES ACT, 1956, AGGREGATING TO I NR 27,64,110/-. 11. THE APPELLANT SUBMITS THAT EACH GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE, DELETE AND 1 OR MODIFY, IN ANY MANNER WHATSOEVER, ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL, AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF EXPORTING BEARINGS, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009- 10 ON 29.09.2009 ADMITTING NIL INCOME. SINCE THE ASSESSEE HAD ENTERED IN TO INTERNATIONAL TRANSACTIONS AMOUNTING TO RS.58 CRORES WITH THEIR ASSOCIATED ENTERPRISES, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 26.04.2010. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 31.03.2013 WHEREIN THE LD.AO HAD MADE SEVERAL ADDITIONS. 4. AT THE OUTSET THE LD.AR SUBMITTED THAT THE LD.CIT(A) HAS NOT DECIDED THE ISSUE ON MERITS BUT DISMISSED THE APPEAL FOR NON- APPEARANCE, IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.CIT(A), THEREBY PROVIDING ONE MORE 4 ITA NO.268/CHNY/2018 OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. THE LD.DR STRONGLY OPPOSED TO THE SUBMISSION OF THELD.AR AND PLEADED FOR CONFIRMING THE ORDER OF THE LD.CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE ORDER OF THE LD.CIT(A), IT APPEARS THAT THE LD.CIT(A) HAS PROVIDED SEVERAL OPPORTUNITIES TO THE ASSESSEE OF BEING HEARD VIZ., ON 20.10.2015, 12.11.2015, 26.06.2016, 18.07.2016, 28.10.2016, 17.11.2016, 12.01.2017, 28.03.2017, 14.08.2017, 13.09.2017 & FINALLY ON 14.11.2017. HOWEVER IT APPEARS THAT THE ASSESSEE AND ITS REPRESENTATIVE HAVE NOT CO-OPERATED WITH THE LD.CIT(A) IN PURSUING THEIR APPEAL. THEREFORE THE LD.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN- LIMINI RELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE CIT VS. MULTIPLAN (INDIA) PVT. LTD., REPORTED IN 38 ITD 320. NOW THE ASSESSEE IS IN APPEAL BEFORE US REQUESTING FOR REMITTING BACK THE MATTER TO THE FILE OF LD.CIT(A) THEREBY PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. WE DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE LD.AR, BECAUSE THE ASSESSEE HAS GROSSLY VIOLATED BY NOT CO-OPERATING WITH THE LD.CIT(A) IN THE PROCEEDINGS BEFORE HIM. HOWEVER IN THE INTEREST OF JUSTICE, WE 5 ITA NO.268/CHNY/2018 HEREBY REMIT THE MATTER BACK TO THE FILE OF LD.CIT(A) FOR FRESH CONSIDERATION THEREBY PROVIDING ONE FINAL OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. WE ALSO CAUTION THE ASSESSEE TO PROMPTLY CO-OPERATE WITH THE LD.CIT(A) IN HIS PROCEEDINGS, FAILING WHICH THE LD.CIT(A) SHALL BE AT LIBERTY TO PASS APPROPRIATE SPEAKING ORDER IN ACCORDANCE WITH MERIT AND LAW BASED ON THE MATERIALS ON RECORD. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED ON THE 10 TH JULY, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 10 TH JULY, 2018 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF