The DCIT, Central Circle-1, Baroda V. M/s. Sun Pharmaceuticals Industries Ltd., Baroda

ITA 3025/AHD/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1600 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 04-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Keywords: Transfer pricing; Retrospective amendment
• Section: 115JB; 10B; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 3025/AHD/2010 & 3069/AHD/2010 (ASSESSMENT YEAR: 2005-06) THE D.C.I.T., CENTRAL CIRCLE-1, BARODA V/S SUN PHARMACEUTICAL INDUSTRIES LTD, TANDALJA, BARODA-20 (APPELLANT) (RESPONDENT) SUN PHARMACEUTICAL INDUSTRIES LTD, TANDALJA, BARODA-20 V/S ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE- 1, BARODA (APPELLANT) (RESPONDENT) PAN: AADCS3124K APPELLANT BY : SHRI R.I. PATEL, CIT/DR RESPONDENT BY : SHRI S.N. SOPARKAR, A.R. ( )/ ORDER DATE OF HEARING : 26 -04-201 6 DATE OF PRONOUNCEMENT : 03 -05-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NOS. 302 5 & 3069/AHD/2010 . A.Y. 2005-0 6 2 1. ITA NOS. 3025/AHD/2010 & 3069/AHD/2010 ARE CROSS AP PEALS BY THE REVENUE AND THE ASSESSEE AGAINST THE VERY SAME ORDE R OF THE LD. CIT(A)-IV, AHMEDABAD DATED 20.08.2010 PERTAINING TO A.Y. 2005-06. 2. THESE CROSS APPEALS RELATE TO THE PENALTY U/S. 271( 1)(C) OF THE ACT AND RELATE TO THE SAME SET OF FACTS IN QUANTUM ADDITION S/DELETIONS. THEREFORE, BOTH THESE APPEALS WERE HEARD TOGETHER A ND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 3025/AHD/2010 REVENUES APPEAL FOR A.Y. 2005-06 3. A PERUSAL OF THE PENALTY ORDER VIS--VIS THE ASSESS MENT ORDER SHOWS THAT THE PENALTY WAS LEVIED BY THE A.O ON ACCOUNT O F (1) DISALLOWANCE OF PRODUCT PROMOTION COMMISSION PURSUA NT TO THE ORDER OF TPO (2) DISALLOWANCE OF TRADE MARK REGISTRATION CHARGES AND OVERSEAS PRODUCT REGISTRATION EXPENSES U/S. 35(2AB) (3) PRICE DIFFERENCE ON ACCOUNT OF SALE OF RAW MATERIAL/PRODU CTS TO SISTER CONCERN (4) DISALLOWANCE OF EXPENSES PERTAINING TO SISTER CONCERN U/S. 37 OF THE ACT (5) ADDITION OF PROVISION FOR DEFERRE D TAX U/S. 115JB (6) DENYING THE EXEMPTION TO THE AHMEDNAGAR UNIT U/S. 1 0B (7) EXCLUSION OF INCOME OF SECTION 10B FOR AHMEDNAGAR FOR COMPUTI NG BOOK PROFIT U/S. 115JB. 4. EXCEPT FOR ISSUES CONTAINED IN ITEM NO. 5 HEREINABO VE ALL OTHER ISSUES HAVE BEEN DECIDED BY US IN QUANTUM APPEAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN ITA NO. 2430/AHD/2009 & 2400/AHD/2009. THEREFORE, WE DO NOT FIND ANY REASON FOR THE LEVY O F PENALTY U/S. 271(1)(C) OF THE ACT IN RESPECT OF THESE ISSUES. I N SO FAR AS THE ISSUE ITA NOS. 302 5 & 3069/AHD/2010 . A.Y. 2005-0 6 3 RELATING TO THE ADDITION ON ACCOUNT OF PROVISION FO R DEFERRED TAX IS CONCERNED, WE FIND THAT THE ADDITIONS HAVE BEEN CON FIRMED DUE TO THE RETROSPECTIVE AMENDMENT OF SECTION 115JB OF THE ACT . HOWEVER, WE FIND THAT ON THE DATE OF FILING OF THE RETURN, THE CLAIM WAS SUPPORTED BY THE PROVISIONS OF LAW AND THE ASSESSEE COULD NOT FO RESEE THE FUTURE AMENDMENT. THEREFORE, WE DO NOT FIND ANY REASON FOR LEVYING PENALTY FOR THE ADDITION CONFIRMED DUE TO SUBSEQUENT AMENDM ENT BROUGHT IN THE PROVISIONS. WE, THEREFORE, CONFIRMED THE FINDIN GS OF THE LD. CIT(A) AND DISMISSED REVENUES APPEAL ON THIS COUNT ALSO. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ITA NO. 3069/AHD/2010 ASSESSEES APPEAL FOR A.Y. 2005-06 6. THE SOLE REASON FOR THE LEVY OF PENALTY RELATES TO THE TRANSFER PRICING ADJUSTMENTS MADE IN THE QUANTUM ASSESSMENT PROCEEDI NGS. 7. SINCE, THE TRANSFER PRICING ADJUSTMENTS HAVE BEEN D ELETED BY US IN QUANTUM ASSESSMENT PROCEEDINGS IN ITA NO. 2430/AHD/ 2009 & ITA NO. 2400/AHD/2009 QUA GROUND NO. 2 AND GROUND NO. 1 RESPECTIVELY. THEREFORE, WE DO NOT FIND ANY REASON WHICH COULD BE THE BASIS FOR THE LEVY OF PENALTY. 8. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 03 - 05 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY