M/s. Sandvik Intellectual Property Aktiebolag, Pune V. Deputy Commissioner of Income-tax, (International Taxation) Circle - 2, Pune

ITA 2985/PUN/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5612 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-02-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 15-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRITA MISRA
• Keywords: Additional evidence; FORM 26AS
• Section: 143(3); 73; 13; 22

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 .2985 /PUN/201 7 / ASSESSMENT YEAR : 20 1 4 - 15 M/S. SANDVIK INTELLECTUAL PROPERTY AKTIEBOLAG, C/O SANDVIK ASIA PRIVATE LIMITED, MUMBAI PUNE ROAD, DAPODI, PUNE 411012 PAN : AATCS7288N ...... / APPELLANT / V/S. DEPUTY COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION) - CIRCLE 2, PUNE / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : S MT. AMRITA MISRA / DATE OF HEARING : 0 4 - 02 - 2021 / DATE OF PRONOUNCEMENT : 05 - 0 2 - 2021 / ORDER PER S.S. VISWANETHRA RAVI, JM : TH IS APPEAL BY THE ASSESSEE FILED AGAINST THE FINAL ASSESSMENT ORDER DATED 13 - 10 - 2017 PASSED BY THE ASSESSING OFFICER (AO) U/S. 144C(13) R.W.S. 143(3) OF THE ACT FOR ASSESSMENT YEAR 2014 - 15. 2 ITA NO . 2985/PUN/2017, A.Y. 2014 - 15 2. THE ASSESSEE RAISED GROUND NOS. 1 AND 2 CHALLENGING THE ACTION OF AO BY FOLLOWING THE DIRECTIONS OF DRP IN CONFIRMING THE RECEIPT O F RS.2,19,17,474/ - IN THE TOTAL INCOME IGNORING THE FACT THAT THE SAME HAS BEEN OFFERED TO TAX IN A.Y. 2013 - 14 WHICH ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, LEARNED DISPUTE RESOLUTION PANEL (LD. DRP) HAVE ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER (LD. AO) IN INCLUDING A RECEIPT OF INR 2,19,17,474 IN THE TOTAL INCOME OF THE APPELLANT IGNORING THE FACT THAT THIS AMOUNT HAS ALREADY BEEN OFFERED TO TAX IN THE PREVIOUS YEAR ENDED 31 MARCH, 2013 (A Y 2013 - 14). IT IS PRAYED THAT THE ADDITION MADE BY THE LD. AO AND CONFIRMED BY THE LD. DRP BE DELETED. 2. WITHOUT PREJUDICE TO GROUND 1, IF THE RECEIPT OF INR 2,19,17,474 IS INCLUDED IN THE TOTAL INCOME OF AY 2014 - 15, IT IS PRAYED THAT, DIRECTIONS BE GIV EN TO EXCLUDE THE RECEIPT FROM THE INCOME OF AY 2013 - 14. 3. THE LD. AR, SHRI NIKHIL PATHAK SUBMITS THAT DURING A . Y . 2013 - 14, THE ASSESSEE EARNED ROYALTY INCOME FROM SAPL AND THE SAID RECEIPTS WERE OFFERED TO TAX IN THE RETURN OF INCOME FILED FOR THE SAID YEAR . OUT OF THE AFORESAID RECEIPTS, TAXES ON THE RECEIPTS OF RS. 2,19,17,474 / - WERE WITHHELD BY SAPL IN A . Y . 2014 - 15 AND THE RECEIPTS OF RS. 2,19,17,474 / - APPEAR IN THE FORM 26AS OF THE A SSESSEE FOR A . Y . 2014 - 15 EVEN THOUGH THE SAME WERE OFFERED TO T AX IN A.Y. 2013 - 14. THE LD. AR SUBMITS THAT THE COPY OF ROYALTY LEDGERS FOR A . Y . 2013 - 14 AND A . Y . 2014 - 15 , RESPECTIVELY FURNISHED BEFORE THE LOWER AUTHORITIES WHICH INCORPORATES THE AFORESAID RECEIPT/REVERSALS INVOLVING RS. 2,19,17,474 / - . THE CONTENTION OF LD. AR IS THAT THE ASSESSEE HAD SUBMITTED THE RELEVANT LEDGER ACCOUNT EXTRACTS TO SUPPORT ITS CASE THAT THE AMOUNT OF RS . 2,19,17,474/ - WAS ALREADY OFFERED 3 ITA NO . 2985/PUN/2017, A.Y. 2014 - 15 TO TAX IN A.Y. 2013 - 14 AND THE SAME WAS REQUIRED TO BE REDUCED WHILE COMPUTING THE INCOME FOR A.Y. 2 014 - 15. DURING THE PROCEEDINGS BEFORE THE AO/DRP DID NOT SPECIFICALLY SEEK THE COPY OF INVOICES/CREDIT NOTES AND THE CLAIM OF THE ASSESSEE WAS REJECTED ON THE GROUND THAT IT WAS UNABLE TO SUBSTANTIATE THE CLAIM THAT THE SAID AMOUNT OF RS.2,19,17,474/ - WAS OFFERED TO TAX IN A.Y. 2013 - 14. NOW, THE ASSESSEE IS READY TO FURNISH THE COPY OF INVOICES/CREDIT NOTES RAISED BY IT DURING A . Y . 2013 - 14 AND A . Y . 2014 - 15 WHICH ARE IN SR. NO. 6 & 12 OF THE PAPER BOOK IN ORDER TO SUBSTANTIATE ITS CLAIM THAT THE AMOUNT OF RS . 2,19,17,474/ - WAS OFFERED TO TAX IN A.Y. 2013 - 14 AND TAXING THE SAID AMOUNT IN A.Y. 2014 - 15 WOULD RESULT IN DOUBLE ADDITION. 4. WE NOTE THAT THE MAIN CONTENTION OF THE LD. AR IS THAT THE AUTHORITIES AO AND DRP DID NOT SPECIFICALLY SEEK THE COPY OF INV OICES/CREDIT NOTES CONCERNING THE ISSUE RAISED IN GROUND NO. 1 AND ACCORDINGLY, HE PLACED ON RECORD THE SAID COPIES OF INVOICES AND CREDIT NOTES AS ADDITIONAL EVIDENCES IN THE PAPER BOOK. 5. IN REPLY, THE LD. DR, SMT. AMRITA MISRA CONTENDED THAT THE ASS ESSEE FAILED TO EXPLAIN ONE TO ONE RECONCILIATION REGARDING THE FIGURES OF AMOUNT RAISED IN GROUND NOS. 1 AND 2 BEFORE THE LOWER AUTHORITIES AS WELL AS BEFORE THIS TRIBUNAL. WE NOTE THAT THE COPIES OF INVOICES/CREDIT NOTES CONCERNING THE GROUND NOS. 1 AND 2 ARE PLACED BEFORE US BY WAY OF PAPER BOOK AT SR. NO. 6 FROM PAGES 73 TO 106 IN PAPER BOOK - I AND ALSO AT SR. NO. 12 FROM PAGES 209 TO 22 1 IN PAPER BOOK - II. WE NOTE THAT THESE COPIES OF 4 ITA NO . 2985/PUN/2017, A.Y. 2014 - 15 INVOICES/CREDIT NOTES WERE NOT BEFORE THE AO/DRP AND THE ISSUE ALSO RAISED FOR THE FIRST TIME BEFORE THIS TRIBUNAL. WE FIND THAT THE AO AND DRP REJECTED THE CLAIM OF ASSESSEE ON THE GROUND THAT THE ASSESSEE IS UNABLE TO SUBSTANTIATE THE CLAIM OF DOUBLE ADDITION IN A.YS. 2013 - 14 AND 2014 - 15. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE PRAYER MADE BY THE LD. AR TO REFER THE FILE OF AO FOR HIS FRESH VERIFICATION AS RIGHTLY AGREED BY THE LD. DR, WE DEEM IT PROPER TO REMAND THE ISSUE TO THE FILE OF AO FOR HIS FRESH VERIFICATION. THE ASSESSEE IS LIBERTY TO F ILE EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM. THUS, GROUND NOS. 1 AND 2 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 6. GROUND NO. 3 RAISED BY THE ASSESSEE CHALLENGING THE ACTION OF AO IN CONFIRMING THE ADDITION OF RS.21,15,735/ - IN NOT CONSIDERING CREDIT NOTES WHILE COMPUTING THE TAXABLE INCOME WHICH IS AS UNDER : 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, L D. D RP HAVE ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN NOT CONSIDERING CREDIT NOTES OF INR 21,15,735 AND REDU CING THE SAME FORM THE RECEIPTS WHILE COMPUTING THE TAXABLE INCOME OF THE APPELLANT IN INDIA. IT IS PRAYED THAT THE AMOUNT OF INR 21,15,735 BE REDUCED WHILE COMPUTING THE TAXABLE INCOME OF THE APPELLANT. 7. THE LD. AR SUBMITS THAT THE ASSESSEE ISSUED CREDIT NOTES OF RS. 21,15,735 / - DURING A . Y . 2014 - 15 AND THE SAME WERE NOT CONSIDERED BY SAPL WHILE DEDUCTING TAX. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSEE FILED A COPY OF LEDGER EXTRACT TO SUBSTAN TIATE THE FACT THAT SAPL DEDUCTED TAX ON A GROSS BASIS WITHOUT CONSIDERING THE CREDIT NOTES. FURTHER, THE RELEVANT DETAILS OF CREDIT NOTES WERE ALSO SUBMITTED. THE AO 5 ITA NO . 2985/PUN/2017, A.Y. 2014 - 15 REJECTED THE CLAIM OF THE A SSESSEE. FURTHER, THE DRP ALSO REJECTED THE CLAIM ON THE GROUN D THAT NO SUPPORTING DOCUMENT WAS FURNISHED IN RELATION THERETO. IT IS SUBMITTED THAT THESE CREDIT NOTES WERE NEVER CALLED FOR BY THE ASSESSING OFFICER/DRP, NOW THE ASSESSEE COMPANY IS READY TO FURNISH COPY OF CREDIT NOTES ISSUED DURING A.Y. 2014 - 15 WHICH ARE AT SR. NO. 9 IN PAPER BOOK AS AN ADDITIONAL EVIDENCE. 8. AFTER HEARING BOTH THE PARTIES WE NOTE THAT THE MAIN CONTENTION OF THE LD. AR IS THAT THE A SSESSEE FILED A COPY OF LEDGER EXTRACT TO SUBSTANTIATE THE FACT THAT SAPL DEDUCTED TAX ON A GROSS BASI S WITHOUT CONSIDERING THE CREDIT NOTES AND RELEVANT DETAILS OF CREDIT NOTES WERE ALSO SUBMITTED BUT THE ASSESSING OFFICER AND DRP REJECTED THE CLAIM OF THE A SSESSEE ON THE GROUND THAT NO SUPPORTING DOCUMENT WAS FURNISHED IN RELATION THERETO. 9. WE NOTE THAT THE COPIES OF INVOICES/CREDIT NOTES CONCERNING THE GROUND NO . 3 ARE PLACED BEFORE US BY WAY OF PAPER BOOK AT SR. NO. 9 FROM PAGES 155 TO 158 IN PAPER BOOK - I . WE NOTE THAT THESE COPIES OF INVOICES/CREDIT NOTES WERE NOT BEFORE THE AO/DRP AND THE ISSUE ALSO RAISED FOR THE FIRST TIME BEFORE THIS TRIBUNAL. WE FIND THAT THE AO AND DRP REJECTED THE CLAIM OF ASSESSEE ON THE GROUND THAT THE ASSESSEE IS UNABLE TO SUBSTANTIATE THE CLAIM OF DOUBLE ADDITION IN A.YS. 2013 - 14 AND 2014 - 15. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE PRAYER MADE BY THE LD. AR TO REFER THE FILE OF AO FOR HIS FRESH VERIFICATION AS RIGHTLY AGREED BY THE LD. DR, WE DEEM IT PROPER TO REMAND THE ISSUE TO THE FILE OF AO FOR HIS FRESH VERIFICATION. THE ASSESSEE IS LIBERTY TO F ILE EVIDENCE, IF ANY, IN 6 ITA NO . 2985/PUN/2017, A.Y. 2014 - 15 SUPPORT OF ITS CLAIM. THUS, GROUND NO . 3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY, 202 1 . SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 05 TH FEBRUARY, 202 1 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE DISPUTE RESOLUTION PANEL - 3, MUMBAI 4. THE CIT (IT & TP), PUNE 5. , , , / DR, ITAT, C BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE