XL INDIA BUSINESS SERVICES PVT. LTD., NEW DELHI V. ADDL. CIT, SPECIAL RANGE- 9, NEW DELHI

ITA 3302/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1830 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I2
• Assessment Year: 2012-2013
• Appeal Filed On: 07-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: H K CHAUDHARY
• Keywords: Transfer pricing; Application of stay
• Section: 143(3); 234B; 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-2 NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO.3302/DEL/2018 ALONGWITH THE S.A. NO.389/DEL/2018 ASSESSMENT YEAR: 2012-13 XL INDIA BUSINESS SERVICES PVT. LTD., FF-101, FIRST FLOOR, SARINES SONIA SADAN, BUILDING NO. G-11, COMMUNITY CENTRE, VIKAS PURI, NEW DELHI. VS. ADDL. CIT, SPECIAL RANGE-9, NEW DELHI. TAN/PAN: AAACX 0309A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SALIL KAPOOR, ADV. RESPONDENT BY: SHRI H.K. CHAUDHARY, CIT-DR DATE OF HEARING: 01 11 2018 DATE OF PRONOUNCEMENT: 01 11 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 23.03.2018, PASSED U/S.154 R.W.S. 143(3)/144C. IN THE GROUNDS OF APPEA L, THE ASSESSEE IS MAINLY AGGRIEVED BY WITHDRAWAL OF MAT C REDIT AMOUNTING TO RS.2,25,63,707/- WHILE COMPUTING TAX L IABILITY OF THE ASSESSEE FOR THE A.Y. 2012-13. THE RELEVANT GROUNDS READ AS UNDER:- 1. THAT, THE ORDER PASSED UNDER SECTION 154 READ WITH SECTION 143(3) OF THE ACT BY THE LD. AO IS ILLEGAL, BAD IN LAW, WI THOUT JURISDICTION AND CONTRARY TO THE FACTS OF CASE. SA NO.389/DEL/2018 & I.T.A. NO.3302/DEL/2018 2 2. THAT, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO HAS ERRED IN NOT GRANTING MINIMUM A LTERNATE TAX (MAT) CREDIT AMOUNTING RS.2,25,63,707 WHILE COMPU TING TAX LIABILITY OF THE APPELLANT. 2.1. THAT, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO HAS ERRED IN NOT GRANTING MAT CREDI T FOR AY 2009-10 IGNORING THAT THE HONBLE ITAT VIDE ITS ORDER DATED 02 DECEMBER 2015 HAD REMANDED BACK THE MATTER TO THE LD. TRANSFER PR ICING OFFICER/ LD. AO FOR FRESH ADJUDICATION. 2.2. THAT, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO HAS ERRED IN NOT GRANTING MAT CREDI T FOR AY 2010-11 WITHOUT APPRECIATING THAT THE MATTER IS STILL UNDER DISPUTE AND APPEAL FOR AY 2010-11 HAS ALREADY BEEN HEARD BY THE HONBL E ITAT AND ORDER IS AWAITED AS ON DATE. 3. THAT THE LD. AO HAS ERRED IN CHARGING INTEREST UNDE R SECTION 234B AND 234C OF THE ACT. THE SAME HAS BEEN UNJUSTLY AND ILLEGALLY CHARGED. 4. THAT, WITHOUT PREJUDICE, THE INTEREST UNDER SECTION 234B AND 234C IS ALSO WRONGLY WORKED OUT. 2. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE, SHR I SALIL KAPOOR SUBMITTED THAT ASSESSING OFFICER HAS INITIAL LY ALLOWED MAT CREDIT PERTAINING TO ASSESSMENT YEARS 2009-10 & 2010- 11 IN HIS ASSESSMENT ORDER FOR THE A.Y.2012-13 WHIC H WAS COMPLETED ON 31.10.2016. LATER ON, IN RECTIFICATION PROCEEDINGS U/S.154, HE HAS WITHDRAWN THE MAT CREDI T AFTER OBSERVING AND HOLDING AS UNDER: THE ASSESSEE FILED RETURN REPLY ON 21-03-2018 STAT ING THAT THE ASSESSEE HAD CLAIMED CREDIT OF RS. 2,66,71,252/- U/S 115JAA OF THE ACT FOR TAXES PAID U/S 115JB OF THE ACT PRIOR TO AY 2012-13. YEAR -WISE DETAIL OF CREDIT UTILIZED DURING AY 2012-13 IS TABULATED BELOW FOR R EFERENCE:- SA NO.389/DEL/2018 & I.T.A. NO.3302/DEL/2018 3 ASSESSMENT YEAR AMOUNT ( I N RS.) AY 2008-09 41,07,725 2009-10 1,01,76,949 AY 2010-11 1,23,86,578 TOTAL MAT CREDIT OF EARLIER YEARS UTILIZED IN 2,66,71,252 INCOME RETURNED BY THE ASSESSEE IN TAX RETURN FOR A Y 2008-09 STANDS ACCEPTED BY THE DEPARTMENT AND ACCORDINGLY, MAT CRE DIT FOR AY 2008-09 IS CORRECTLY UTILIZED IN AY 2012-13. IN RESPECT OF ASSESSMENT YEAR 2010-11 THE PROCEEDIN GS ARE PENDING BEFORE HON'BLE ITAT AND AY 2009-10 THE HONBLE ITAT HAD RE STORED THE MATTER TO THE FILE OF LD. TPO. REPLY OF THE ASSESSEE OF HAS BEEN CONSIDERED CAREFU LLY AND IS NOT FULLY ACCEPTABLE. MAT CREDIT FOR AY 2009-10 IS CORRECTLY ALLOWED IN AY 2012-12. IN AY 2009-10 & 2010-11 MAT CREDIT FOR THESE YEARS IS NOT ALLOWED SINCE IT IS NOT ENTITLED TO THE SAME AS TAX PAID BY THE ASSE SSEE WAS IN NORMAL PROVISION FOR AY 2009-10 & 2010- 11 WHICH IMPLIED T HAT THERE WAS NO MAT CREDIT WAS AVAILABLE. AS THE MISTAKE IS APPARENT FROM RECORD, THE SAME IS HEREBY RECTIFIED IN THIS ORDER. THE REVISED TAX CALCULATION SHEET IS ENCLOSE D HEREWITH AND ON THE BASIS OF THIS ORDER THE NET DEMAND PAYABLE IS 3,16, 24,450/-. 2.1 THUS, HE SUBMITTED THAT ASSESSING OFFICER HA S WITHDRAWN THE MAT CREDIT ON THE GROUND THAT, FIRSTLY , ADDITIONS WERE MADE IN ASSESSMENT YEARS 2009-10 & 2 010-11 AND NOW ALL THESE MATTERS HAVE BEEN RESTORED BACK T O THE FILE OF THE ASSESSING OFFICER/TPO BY THE TRIBUNAL; AND SECONDLY , THE TAX WAS PAID UNDER NORMAL PROVISION WHICH IMPLI ED THAT THERE WAS NO MAT CREDIT AVAILABLE TO THE ASSESSEE. HE POINTED OUT THAT IN ASSESSMENT YEAR 2009-10, THE ADDITION M ADE BY THE ASSESSING OFFICER WAS SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER/TPO EXCEPT FOR ADDITION ON ACCOUNT OF INTEREST OF FDRS WHICH HAS BEEN CONFIRMED BY THE TR IBUNAL. IN THE ASSESSMENT YEAR 2010-11 THE ENTIRE TRANSFER PRICING SA NO.389/DEL/2018 & I.T.A. NO.3302/DEL/2018 4 ADJUSTMENTS HAVE BEEN DELETED AND ONLY ON SOME CORP ORATE ISSUE MATTER WAS RESTORED BACK TO THE FILE OF THE A SSESSING OFFICER/TPO. NOW IN SO FAR AS ASSESSMENT YEAR 2009- 10 IS CONCERNED, NO ASSESSMENT ORDER HAS BEEN PASSED BY T HE ASSESSING OFFICER AFTER THE MATTER WAS SET-ASIDE AN D ALMOST THREE YEARS HAVE BEEN PASSED AND SUCH AN ASSESSMENT HAS BECOME TIME BARRED AS PER THE LAW. IN VIEW OF THIS FACT, THE TAX LEVIED ON NORMAL PROVISION WILL STAND DELETED AND A SSESSEE HAS TO BE ALLOWED MAT CREDIT. HE ALSO DREW OUR ATTE NTION TO THE WORKING GIVEN AT PAGE 32 OF THE PAPER BOOK. 2.2 AS REGARDS ASSESSMENT YEAR 2010-11, HE SUB MITTED THAT MATTER HAS BEEN DECIDED BY THE TRIBUNAL VIDE O RDER DATED 03.08.2018 AND NO APPEAL EFFECT HAS BEEN GIVEN, THE REFORE, HE PRAYED THAT THE ASSESSING OFFICER SHOULD EXAMINE TH IS FACT AND ONLY AFTER GIVING APPEAL EFFECT OF THE TRIBUNAL ORDER FOR THE ASSESSMENT YEAR 2010-11, CONSEQUENTIAL RELIEF OF AL LOWING OF MAT CREDIT SHOULD BE GIVEN. 3. LEARNED SENIOR DEPARTMENT REPRESENTATIVE ADMITT ED THAT THE MATTER CAN BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO CALCULATE THE COMPUTATION OF T HE TAX LIABILITY UNDER THE MAT AND AFTER GIVING EFFECT OF THE APPELLATE ORDERS. 4. AFTER CONSIDERING THE AFORESAID SUBMISSIONS AN D ON PERUSAL OF THE MATERIAL REFERRED TO BEFORE US, WE F IND THAT ASSESSING OFFICER IN THE IMPUGNED RECTIFICATION PRO CEEDINGS U/S.154 HAS WITHDRAWN THE MAT CREDIT FOR THE ASSESS MENT YEARS 2009-10 AND 2010-11 WHILE COMPUTING THE TAX L IABILITY FOR THE ASSESSMENT YEAR 2012-13. THE ASSESSING OFFI CER HAS SA NO.389/DEL/2018 & I.T.A. NO.3302/DEL/2018 5 NOT ALLOWED THE MAT CREDIT ON THE GROUND THAT ADDIT ION WERE MADE IN THE ASSESSMENT YEARS 2009-10 AND 2010-11 AN D TAXES HAVE BEEN PAID BY THE ASSESSEE UNDER THE NORM AL PROVISION. AS POINTED OUT BY THE LEARNED COUNSEL, I T IS SEEN THAT THE APPELLATE ORDER OF THE TRIBUNAL FOR THE AS SESSMENT YEAR 2009-10 HAVE BEEN PASSED WAY BACK ON 2 ND DECEMBER, 2015, WHEREIN BARRING THE ISSUE OF DISALLOWANCE OF INTEREST ON FDRS, ALL THE OTHER ADDITIONS WERE RESTORED BACK TO THE FILE OF THE AO/TPO; AND TILL DATE NO ASSESSMENT HAS BEEN PA SSED GIVING EFFECT TO SUCH ORDER. THUS, ASSESSING OFFICE R IS DIRECTED TO VERIFY THIS FACT, WHETHER THE ORDER HAS BEEN PAS SED IN PURSUANCE OF REMAND BY THE TRIBUNAL OR NOT; AND IN CASE ASSESSMENT HAS BECOME TIME BARRED AS PER LAW, THEN ASSESSING OFFICER SHOULD EXAMINE THE WORKING GIVEN BY THE ASSESSEE AND ALLOW CONSEQUENTIAL RELIEF IN THE MAT CREDIT. 5. SIMILARLY, FOR THE ASSESSMENT YEAR 2010-11, THE TPO/A.O IS DIRECTED TO FIRST GIVE EFFECT TO THE ITA T ORDER AND THEN HE SHOULD CALCULATE THE MAT CREDIT AND GRANT CONSEQUENTIAL RELIEF TO THE ASSESSEE. 6. APPEAL OF THE ASSESSEE IS THUS TREATED AS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. 7. SINCE ASSESSEE HAS FILED STAY APPLICATION, SEEKI NG STAY OF DEMAND ARISING OUT OF WITHDRAWAL OF MAT CREDIT IN A FORESAID MANNER, THEREFORE, THE ASSESSING OFFICER IS DIRECTE D THAT UNTIL HE CARRIES OUT OUR AFORESAID DIRECTION, NO DEMAND S HALL BE ENFORCED AND TILL THE GRANTING OF CONSEQUENTIAL REL IEF THE ENTIRE DEMAND AS DISPUTED IN THE STAY APPLICATION SHALL RE MAIN STAYED. SA NO.389/DEL/2018 & I.T.A. NO.3302/DEL/2018 6 ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST NOVEMBER, 2018. SD/- SD/- [DR. MITHA LAL MEENA] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST NOVEMBER, 2018 PKK: