DCIT, Ghaziabad V. M/s Progressive Tools & Components Pvt. Ltd., Ghaziabad

ITA 2684/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3489 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SRINIVAS RAO
• Keywords: Transfer pricing; Opportunity of being heard; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : FRIDAY I-2 : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.2684/DEL/2016 ASSESSMENT YEAR: 2006-07 DCIT, CIRCLE II, GHAZIABAD. VS PROGRESSIVE TOOLS & COMPONENTS PVT. LTD., 8/3, SITE-IV, INDUSTRIAL AREA, SAHIBABAD, GHAZIABAD. PAN: AAECP1173G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SOMIL AGGARWAL, ADVOCATE REVENUE BY : SHRI A. SRINIVAS RAO, SR. DR DATE OF HEARING : 20.02.2019 DATE OF PRONOUNCEMENT : 22.02.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 23 RD FEBRUARY, 2016 OF THE CIT(A), MUZAFARNAGAR RELATING TO ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UND ER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON F ACTS IN DELETING THE ADDITION OF RS.1,44,89,897/- ON ACCOUNT OF ROYALTY DETERMINED BY THE TPO/A.O. IN RESPECT OF INTERNATIONAL TAXATION. ITA NO.2684/DEL/2016 2 2. THE APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR AD D ANY ONE OR MORE GROUND OF APPEAL. 3. THEREFORE, THE ORDER OF THE LD.CIT(A) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTO PARTS AND COMPONE NTS. IT FILED ITS RETURN OF INCOME ON 29.11.2006 DECLARING THE TOTAL INCOME AT RS.21,0 3,761/-. THE CASE WAS REOPENED BY ISSUE OF STATUTORY NOTICE. SUBSEQUENTLY, THE ASSES SING OFFICER COMPLETED THE ASSESSMENT U/S 143(3)/148 AT A TOTAL INCOME OF RS.1 ,97,80,545/-. IN APPEAL, THE LD.CIT(A), FOLLOWING HIS ORDER FOR ASSESSMENT YEARS 2005-06 AND 2007-08, DELETED THE VARIOUS ADDITIONS WHICH ARE THE SUBJECT MATTER OF A PPEAL BY THE REVENUE. 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, FILED A COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 AND SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HAS RESTORED T HE ISSUE TO THE FILE OF THE A.O./TPO FOR FRESH DETERMINATION OF THE ALP OF THE INTERNATI ONAL TRANSACTION. SINCE THE LD.CIT(A), WHILE DECIDING THE ISSUE HAS FOLLOWED HI S ORDER FOR ASSESSMENT YEAR 2005- 06, THEREFORE, HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER/TPO WITH SIMILAR DIRECTIONS. THE LD. DR HA S NO OBJECTION TO RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER/TPO IN L INE WITH THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2005-06 IN ASSESSEES OWN CASE. SI NCE, IN THE INSTANT CASE, THE LD.CIT(A) WHILE DELETING THE ADDITION OF RS.1,44,89 ,897/- ON ACCOUNT OF ROYALTY DETERMINED BY THE A.O./TPO IN RESPECT OF INTERNATIO NAL TRANSACTION HAS FOLLOWED HIS ITA NO.2684/DEL/2016 3 ORDER FOR ASSESSMENT YEAR 2005-06 AND SINCE THE TRI BUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 IN ITA NO.56/DEL/2011, ORDE R DATED 10 TH MARCH, 2017, HAS RESTORED THE ISSUE TO THE FILE OF A.O./TPO FOR FRES H DETERMINATION OF THE ALP OF THE INTERNATIONAL TRANSACTION, THEREFORE, WE DEEM IT PR OPER TO RESTORE THE ISSUE TO THE FILE OF THE A.O./TPO FOR DETERMINATION OF THE ALP OF THE IN TERNATIONAL TRANSACTION FOR THE IMPUGNED ASSESSMENT YEAR IN THE LIGHT OF THE DIRECT IONS OF THE TRIBUNAL FOR ASSESSMENT YEAR 2005-06. THE A.O./TPO SHALL DECIDE THE ISSUE AS PER FACT AND LAW, AFTER GIVING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD. THE GR OUNDS RAISED BY THE REVENUE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 2.02.2019. SD/- SD/- (BEENA A. PILLAI) (R.K. PANDA) JUDICIAL MEMBER A CCOUNTANT MEMFBER DATED: 22 ND FEBRUARY, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI