DEUTSCHE ASSET MANAGEMENT (INDIA) P. LTD, MUMBAI V. DCIT 2(1), MUMBAI

ITA 2938/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3858 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Keywords: Transfer pricing

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , . ! , '# ' $ BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARO RA, AM ./ I.T.A. NO. 2938/MUM/2011 ( % % % % & & & & / ASSESSMENT YEARS :2006-07 M/S. DEUTSCHE ASSET MANAGEMENT (INDIA) PRIVATE LTD. 222, KODAK HOUSE, DR. D.N.ROAD, FORT, MUMBAI - 400 001. % % % % / VS. THE DCIT 2(1), C-10/703, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI -51. ' '# ./ ( ./ PAN/GIR NO. : AABCD 5226D ( ') / APPELLANT ) .. ( *+') / RESPONDENT ) ') , ' / APPELLANT BY: SHRI NISHANT THAKKAR *+') - , ' / RESPONDENT BY : SMT. R.M.MADHAVI % - .# / DATE OF HEARING : 16/05/2013 / & - .# / DATE OF PRONOUNCEMENT : 16/05/2013 '0 / O R D E R PER I.P.BANSAL,J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-15 , MUMBAI DATED 3/02/2012 FO R THE ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE HONBLE COMMISSIONER OF INCOME- TAX (APPEALS) (CIT(A)) ER RED IN CONFIRMING THE PENALTY OF RS. 2,500,000 IMPOSED BY THE ASSESSING OFFICER UNDE R SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (ACT). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HONBLE CIT(A) ERRED IN ARBITRARILY HOLDING THE INFORMATION FURNIS HED BY THE APPELLANT WAS NOT SUFFICIENT TO DEMONSTRATE THAT ITS BENCHMARKING ANA LYSIS IS IN ACCORDANCE WITH THE ./ I.T.A. NO.2938/MUM/2012 ( % %% % & & & & / ASSESSMENT YEARS : 2006-07 2 PROVISIONS CONTAINED IN THE SECTION 92COF THE ACT A ND IN THE MANNER PRESCRIBED UNDER THAT SECTION, IN GOOD FAITH AND WITH DUE DILI GENCE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HONBLE CIT(A) ERRED IN HOLDING THAT THE TPO USED AN CONTROLLED TR ANSACTION TO BENCHMARK ANOTHER CONTROLLED TRANSACTION ENTERED INTO BY THE APPELLAN T WITH ITS ASSOCIATED ENTERPRISE, WHICH IS NOT IN ACCORDANCE WITH THE PROVISION LAID DOWN IN THE RULE IOB(1)(A) OF THE INCOME TAX RULES 1962. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HONBLE CIT(A) ERRED IN HOLDING THAT THE BENCHMARKING APPROACH ADO PTED BY THE TPO IS FACTUALLY AND LEGALLY JUSTIFIED. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HONBLE CIT(A) ERRED IN UPHOLDING / CONFIRMING THE ACTION OF THE A O, WITHOUT DEMONSTRATING THAT THE APPELLANT HAS CONCEALED OR FURNISHED INACCURATE PAR TICULARS IN RESPECT OF NON BINDING ADVISORY SERVICES RENDERED BY THE APPELLANT TO THE ASSOCIATED ENTERPRISE. 2. AT THE OUTSET IT WAS POINTED OUT BY LD. AR THAT THE IMPUGNED PENALTY WAS LEVIED ON ACCOUNT OF ADDITION OF RS.81,95,981/-, WH ICH WAS MADE ON ACCOUNT OF MARKETING SUPPORT SERVICES FEES RECEIVED BY THE AS SESSEE. IT WAS POINTED OUT THAT THE SAID ADDITION HAS BEEN DELETED BY THE TRIB UNAL VIDE ITS ORDER DATED 12/12/2012 IN ITA NO.7717/MUM/2010 AND REFERENCE WA S MADE TO THE FOLLOWING OBSERVATIONS OF THE TRIBUNAL. COPY OF THE ORDER WA S PLACED ON OUR RECORD AND A COPY WAS ALSO GIVEN TO THE LD. D.R. 12. AT THE MOMENT, WE ARE CONCERNED WITH ONLY TWO I NTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE COMPANY OUT OF OTHER T RANSACTIONS, I.E. THE MARKETING FEE AND ADVISORY FEE RECEIVED BY THE ASSESSEE, ON W HICH THE ADDITION HAS BEEN MADE. ON HEARING THE ARGUMENTS OF EITHER SIDE, AND ON PERUSAL OF THE SUBMISSIONS AND THE AGREEMENTS ENTERED INTO BY THE ASSESSEE AND TAKING INTO ACCOUNT DISTINCTION DRAWN BY THE ASSESSEE/AR, BETWEEN THE S ERVICES RENDERED BY DAMAL AND THE ASSESSEE TO ITS PRINCIPAL, MADE BY THE ASSE SSEE BEFORE THE REVENUE AUTHORITIES AND NOW, BEFORE US, WE ARE CONVINCED TH AT FEE RECEIVED BY THE ASSESSEE FOR PROVIDING MARKETING AND ADVISORY SERVICES CANNO T BE EQUATED WITH THE SERVICES OF AN INVESTMENT MANAGER. HENCE, THE DECISION OF TH E TPO, SUSTAINED BY THE DRP CANNOT BE ACCEPTED. 13. IN THE RESULT, WE ACCEPT THE ALP ARRIVED AT BY THE ASSESSEE AND WE, THEREFORE, DIRECT THE AO TO DELETE THE ADDITION MADE. 3. LD. D.R DID NOT CONTROVERT THE AFOREMENTIONED AR GUMENTS OF LD. A.R. 4. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES AND TAKING INTO CONSIDERATION THE AFOREMENTIONED ORDER OF THE TRIBU NAL IN QUANTUM, WHERE THE ./ I.T.A. NO.2938/MUM/2012 ( % %% % & & & & / ASSESSMENT YEARS : 2006-07 3 ADDITION IS DELETED, WE HOLD THAT LEVY OF CONCEALME NT PENALTY ON SUCH ADDITION IS NOT JUSTIFIED AND THE SAME IS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2013 . '0 - & #' 1 2%3 16/05/2013 - 4 SD/- SD/- ( SANJAY ARORA) (I.P.BANSAL) /ACCOUNTANT MEMBER '# /JUDICIAL MEMBER MUMBAI; 2% DATED 16/05/2013 . % . .VM , SR. PS '0 '0 '0 '0 - -- - *.56 *.56 *.56 *.56 7'6&. 7'6&. 7'6&. 7'6&. / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- 4. 8 / CIT 5. 694 *.% , , / DR, ITAT, MUMBAI 6. 4: ; / GUARD FILE. '0% '0% '0% '0% / BY ORDER, +6. *. //TRUE COPY// < << < / = = = = (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI