M/s Philips India Limited, Kolkata V. DCIT, Cir-11, Kolkata, Kolkata

ITA 321/KOL/2014

• Counselvise Citation: 32123514 RSA 2014
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 21-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA; VIJAY KU
• Assessee Lawyers: ARVIND SONDE
• Keywords: Transfer pricing; Opportunity of being heard

Judgement Text

I.T.A. NO . 321 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) , AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 321 /KOL . / 20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 M/S. PHILIPS INDIA LIMITED, . ................ .... .... ............ .. .APP ELL ANT 7, JUSTICE CHANDRA MADHAB ROAD, KOLKATA - 700 020 [PAN : A ABCP 9487 A] - VS. - DEPUTY COMMISSIONER OF INCOME TAX, .................... . RESPONDENT CIRCLE - 11 , KOLKATA , AAYAKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 7 00 0 69 APPEARANCES BY: SHRI ARVIND SONDE , ADVOCATE , FOR THE ASSESSEE SHRI VARINDER MEHTA , CIT, D.R. & SHRI VIJAY KUMAR, CIT, D.R. , FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRU ARY 0 2 , 2 01 5 DATE OF PRONOUNCING THE ORDER : FEBRU ARY 02 , 201 5 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER PASSED BY THE DISPUTE RESOLUTION PANEL DATED 23.12.2013 FOR THE ASSESSMENT YEAR 2009 - 10. 2 . SHRI ARVIND SONDE, ADVOCATE , REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI VARINDER MEHTA, CIT, D.R. ALONGWITH SHRI VIJAY KUMAR, CIT, D.R., REPRESENTED ON BEHALF OF THE REVENUE. 3 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. CIT, D .R. THAT THE APPEAL WAS LIABLE TO BE ADJOURNED IN SO FAR AS THE REVENUE HAS SOUGHT FOR THE APPOINTMENT OF SPECIAL COUNSEL TO REPRESENT THE APPEAL AS IT RELATED TO TRANSFER PRICING MATTER. I.T.A. NO . 321 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 2 OF 4 4. IN REPLY, IT WAS THE SUBMISSION BY THE LD. A.R. ON BEHALF OF THE ASSESSEE THAT THIS R EQUEST APPOINTMENT OF SPECIAL COUNSEL BY THE REVENUE HAD BEGUN RIGHT FROM MARCH, 2014 AND THE CASE HAS BEEN ADJOURNED REPEATEDLY ON THIS GROUND ITSELF. IT WAS THE SUBMISSION THAT THE APPEAL WAS STAY GRANTED MATTER AND 365 DAYS WOULD EXPIRE IN MARCH, 2015. IT WAS THE SUBMISSION THAT THE ORAL ADJOURNMENT REQUEST MADE B Y THE REVENUE WAS LIABLE TO BE REJECTED. IT WAS THE FURTHER SUBMISSION THAT THE ORDER OF THE DISPUTE RESOLUTION PANEL (HEREINAFTER REFERRED AS D . R . P . ) WAS LIABLE TO BE SET ASIDE , I N SO FAR AS IN RESPECT OF THE MAIN I SSUE BEING DETERMINATION OF ARM S LENG TH PRICE IN RESPECT OF THE M ANAGEMENT SUPPORT SERVICES RECEIVED BY THE ASSESSEE, THE D .R.P. HAD NOT CONSIDERED ANY OF THE OBJECTIONS OF THE ASSESSEE AND HAD WITHOUT PASSING A SPEAKING ORDER CONFIRMED THE TRANSFER PRICING OFFICER S (HEREINAFTER REFERRED AS T.P.O ) ORDER. IT WAS THE FURTHER SUBMISSION THAT IN RESPECT OF THE DETERMINATION OF THE ARM S LENGTH PRICE FOR THE I .T. SERVICES RECEIVED BY THE ASSESSEE AS ALSO IN RESPECT OF THE ISSUE OF THE DETERMINATION OF THE ARM S LENGTH PRICE FOR THE SOFTWARE SERV ICES PROVIDED BY THE ASSESSEE, ALSO, SPEAKING ORDER HAS NOT BEEN PASSED BY THE D .R.P. IT WAS THE FURTHER SUBMISSION THAT THOUGH THE ISSUE IN RESPECT OF THE ENTRANCE FEES, SUBSCRIPTION AND COST OF FACILITIES PAID TO THE CLUB S WAS ALREADY DECIDED IN FAVOUR O F THE ASSESSEE AS ALSO THE ISSUE IN RESPECT OF THE PROVISI ON FOR REPLACEMENT OF GUARANTEE, THE D.R.P. HAS NOT CONSIDERED THE DECISION IN FAVOUR OF THE ASSESSEE BUT HAS WITHOUT PASSING A SPEAKING ORDER UPHELD THE T . P . O . S FINDING. IT WAS THE SUBMISSION THAT THE ORDER OF THE D.R.P. WAS LIABLE TO BE SET ASIDE . ON A SPECIFIC QUERY AS TO WHY THE ORDER OF THE D . R . P . MUST NOT BE RESTORED TO THE DRP FOR RE - ADJUDICATION AND FOR PASSING A SPEAKING ORDER. LD. A.R. ON BEHALF OF THE ASSESSEE DID NOT RAISE ANY SERIOUS OB JECTION. 5. THIS WAS ALSO PUT TO THE LD. CIT, D.R. , WHO SUBMITTED THAT THE ORDER OF THE D.R.P. WAS LIABLE TO BE UPHELD AND THAT THE SPECIAL COUNSEL WAS BE ING ENGAGED FOR REPRESENTING THE APPEAL. IT WAS, HOWEVER, THE I.T.A. NO . 321 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 3 OF 4 SUBMISSION THAT IF ALL THE ISSUES IN T HE APPEAL ARE BEING RESTORED TO THE FILE OF D.R.P. FOR RE - ADJUDICATION AND FOR PASSING A SPEAKING ORDER, THE REVENUE DID NOT HAVE ANY SERIOUS OBJECTION. 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS REGARDS THE ORAL REQUEST OF THE REVENUE FOR ADJOURNME NT, THE SAME STANDS REJECTED IN SO FAR AS THE APPEAL HAS BEEN POSTED FOR HEARING ON MULTIPLE DAYS AND RIGHT FROM MARCH, 2014 , T HE REVENUE HAS BEEN SEEKING ADJOURNMENT ONLY ON THE GROUND OF APPOINTMENT OF SPECIAL COUNSEL. EVEN TODAY, THE REVENUE IS UNABLE T O INFORM THE TRIBUNAL AS TO THE STATUS IN REGARD TO THE APPOINTMENT OF THE SPECIAL COUNSEL. FURTHER THE ASSESSEE HAS BEEN GRANTED CONDITIONAL STAY AND IT I S NOTICED THAT THE ASSESSEE HAS ALREADY MADE PAYMENT OF THE TAXES OR ADJUST ED BY THE REVENUE TO THE E XTENT OF 48.9% OF THE PRINCIPAL TAX AND THE STAY GRANTED BY THE TRIBUNAL WOULD EXCEED 365 DAY S LIMIT BY MARCH, 2015. IN THESE CIRCUMSTANCES, WE ARE COMPELLED TO REJECT THE REVENUE S REQUEST FOR ADJOURNMENT AND DISPOSE OF THE APPEAL. AFTER CONSIDERING THES E SUBMISSIONS OF THE LD. A.R. AND A PERUSAL OF THE D.R.P. S ORDER MORE SPECIFICALLY PARAS 9, PARA 3 1 , PARA 3 4 , PARA 48 AND PARA 51 OF THE ORDER OF THE D.R.P., IT IS NOTICED THAT THE ORDER OF THE D.R.P. IS NOT A SPEAKING ORDER IN SO FAR AS NO REASON HAS BEE N GIVEN BY D.R.P. FOR REJECTING THE CLAIMS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ISSUES IN THIS APPEAL BE RESTORED TO THE FILE OF THE D.R.P. FOR RE - ADJUDICATION AND FOR PASSING A SPEAKING ORDER AFTER GRANTING THE ASSESESE ADE QUATE OPPORTUNITY TO BE HEARD AND WE DO SO. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND FEBRU ARY , 201 5 . SD/ - SD/ - SHAMIM YAHYA GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) KOLKATA, THE 2 ND D AY OF FEBRU ARY , 201 5 I.T.A. NO . 321 /KOL./201 4 ASSESSMENT YEAR: 200 9 - 20 10 PAGE 4 OF 4 COPIES TO : (1) M/S. PHILIPS INDIA LIMITED, 7, JUSTICE CHANDRA MADHAB ROAD, KOLKATA - 700 020 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 11, KOLKATA, AAYAKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S.