ACIT, New Delhi V. M/s. Kyungshin Industrial Motherson Ltd., New Delhi

ITA 3377/DEL/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5341 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SAIN KAPIL
• Keywords: Business income; Transfer pricing; International transaction; Difference of opinion
• Section: 92C; 15; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE S H. R.K. PANDA , ACCOUNTANT MEMBER AND M S . SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO. 3377 /DEL/201 4 ASSESSMENT YEAR: 20 03 - 04 ACIT CIRCLE 5 (1) NEW DELHI VS KYU N G SHIN INDUSTRIAL MOTHERSON LTD. 2 ND FLOOR, BLOCK B - 1, MOHAN COOPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI - 110044 PAN AAACK4966A (APPELLANT) (RESPONDENT) APPELLANT BY S MT . NAINA SAIN KAPIL, SR. DR RESPONDENT BY SH. K. M GUPTA, ADVOCATE DATE OF HEARING: 0 1 / 1 0/2018 DATE OF PRONOUNCEMENT: 17 / 1 0 /2018 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 31.03.2014 OF THE CIT(A) - VIII , NEW DELHI RELATING TO A. Y. 2003 - 04. 2 2. DELETION OF PENALTY OF RS.48,22,410/ - LEVIED BY THE ASSESSING OFFICER U/S 271 (1) (C) OF THE IT ACT ON THE TP ADJUSTMENT IS THE ONLY ISSUE RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF ARE THAT KYUNGSHIN INDUSTRIAL MOTHERSON LIMI TED ( A SSESSEE OR KIML ) WAS INCORPORATED IN OCTOBER 1997 TO MANUFACTURE AND SELL INTEGRATED WIRING HARNESSES FOR AUTOMOBILES IN INDIA. THE COMPANY WAS SET UP AS A JOINT VENTURE BETWEEN KYUNGSHIN INDUSTRIAL CO. LIMITED ( KIC ) AND MOTHERSON SUMI SYSTEM L IMITED ( MSSL ). THE MANUFACTURING FACILITIES OF KIML ARE LOCATED AT CHENNAI AND THE COMPANY CATERS TO THE ENTIRE WIRING HARNESS REQUIREMENTS OF HYUNDAI MOTORS IN INDIA WITH TECHNOLOGICAL BACK UP FROM KIC. FOR THE YEAR UNDER CONSIDERATION (ASSESSMENT YEAR 2003 - 04), THE A SSESSEE FILED I TS RETURN OF INCOME ON 27.11.2003, DECLARING TOTAL INCOME OF RS. 1,75,23,150 UNDER THE NORMAL PROVISIONS OF THE INCOME - TAX ACT, 1961 ( THE ACT ). THE ORIGINAL ASSESSMENT IN THE PRESENT ASSESSMENT YEAR WAS FRAMED ON 24.03.2006 WHEREIN THE AO DENIED THE CLAIM OF ROYALTY EX PENSES AMOUNTING TO RS 17,70,000 BEING 25% OF ROYALTY EXPENDITURE AS CAPITAL IN NATURE (WHICH WAS LATER ON DELETED BY THE TRIBUNAL ) AND ALSO MADE T. P. ADJUSTMENT IN PURSUANT TO THE TRANSFER PRICING OFFICER ( TP O ) UNDER SECTION 92CA OF THE ACT AMOUNTING TO RS . 5,77,33.054 AND COMPUTED THE TOTAL INCOME OF THE A SSESSEE COMPANY AT RS. 7,70,26,200 AS AGAINST THE RETURNED INCOME OF RS.1,75,23,150/ - . 3.1 SO FAR AS THE T. P. ADJUSTMENT IS CONCERNED, THE TPO D URING THE 3 ORIGINAL ASSESSMENT PROCEEDINGS DID NOT ACCEPT THE A SSESSEE S USE OF OP/CE AS PLI AND REPLACED THE SAME WITH OP/TC UNDER TNMM AND ALSO WHILE COMPUTING THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTION OF THE A SSESSEE WITH ITS ASSOCIATE ENTERPRISE APP LIED THE FINANCIAL RESULTS OF THE COMPARABLES FOR THE IMMEDIATELY PRECEDING TWO YEAR AS AGAINST THE MANDATE OF LAW THAT ONLY CURRENT YEAR DATA OF THE COMPARABLES TO BE USED FOR COMPARATIVE ANALYSIS AS UPHELD BY THE VARIOUS JUDICIAL PRECEDENTS. THE EFFECT O F THE ABOVE TWO OPINIONS OF THE TPO ON ALP OF THE INTERNATIONAL TRANSACTION OF A SSESSEE RESULTED INTO AN ADDITION OF RS. 5,77,33,054/ - . 4 . THE ASSESSEE BEING AGGRIEVED WITH SAID ORIGINAL ASSESSMENT ORDER DATED MARCH 23, 2006 PREFERRED AN APPEAL BEFORE TH E CIT (A) . THE CIT(A) VIDE HIS ORDER DATED 27.01.2009 REJECTED BOTH THE VIEWS I.E. PLI TO BE USED OP/TC AND APPLICATION OF FINANCIAL RESULTS OF THE COMPARABLES FOR THE IMMEDIATELY PRECEDING TWO YEARS. THE CIT (A) REDUCED THE ADJUSTMENTS MADE BY THE TPO FRO M INR 5 , 77 , 33 , 054 / - TO INR 46,243,567. WHILE DOING SO, THE CIT(A) ADOPTED TNMM AS THE MOST APPROPRIATE METHOD BUT USED OP/SALES (AS AGAINST OP/TC ADOPTED BY THE TPO AND OP/CE ADOPTED BY THE ASSESSEE IN ITS TP STUDY) AS THE APPROPRIATE PLI OF THE SAME COMPA RABLES SELECTED IN THE TP STUDY, AND USING SINGLE YEAR DATA FOR THE FY 2002 - 03 TO DETERMINE THE ARM S LENGTH MARGIN WHICH IS THE MANDATE OF THE LAW. 5 . AGGRIEVED BY THE ORDER OF CIT(A) BOTH THE ASSESSEE AND REVENUE FILED APPEALS BEFORE THE ITAT. THE ITA T VIDE ITA NO. 1396/DEL/2009 & ITA NO. 4 1464(DEL)/2009 VIDE ORDER DATED 21.10.2010 SET ASIDE THE MATTER TO THE AO FOR FRESH ADJUDICATION ON ADDITIONS MADE U/S 92CA(3) OF THE ACT. THE R EVENUE IN ITS APPEAL BEFORE TRIBUNAL HAD CHALLENGED THE ACTION OF THE CIT( A) OF ADOPTING THE PLI AS THE RATIO OPERATING PROFIT TO TOTAL SALES (OP/SALES) WHICH TRIBUNAL HAD REMANDED BACK TO TPO TO DECIDE AFRESH . I N THE FRESH ORDER PASSED IN PURSUANT TO THE ORDER OF TRIBUNAL, THE TPO ACCEPTED OP/SALES AS CORRECT PLI FOR THE PRESEN T CASE TO DETERMINE ALP OF INTERNATIONAL TRANSACTION AND NOT WHAT HAS BEEN CONTENDED IN THE ORIGINAL ASSESSMENT AND BEFORE THE TRIBUNAL BY THE REVENUE . 6 . TO GIVE EFFECT TO THE ORDER OF TRIBUNAL, THE AO REFERRED THE MATTER TO THE TPO WHO FRAMED AN ORDER U NDER SECTION 92CA (3) READ WITH SECTION 254 OF THE ACT. IN THE SAID ORDER, THE TPO GAVE EFFECT TO DIRECTIONS OF THE TRIBUNAL IN ACCORDANCE WITH LAW AND ACCEPTED THE MAJORITY OF CONTENTIONS OF THE ASSESSEE WHILE COMPLETING THE ASSESSMENT AS APPROVED BY CIT( A) AND THE TRIBUNAL. ACCORDINGLY, ON THE BASIS OF FRESH COMPUTATION, THE TP ADDITION WAS RESTRICTED TO INR 13,122,205 AS AGAINST ORIGINAL ADDITION OF RS. INR 57,733,054. 7 . THE AO PASSED AN ORDER U/S 254/143(3) DATED 31.12.2012 AFTER CONSIDERING THE ORDER OF TPO AND ADDITION AMOUNTING TO RS. 1,31,22,205/ - WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. NO OBJECTION/APPEAL WAS FILED BY THE ASSESSEE AGAINST THE AFORESAID FRESH ORDER . 8 . P ENALTY PROCEEDINGS WERE SUBSEQUENTLY INITIATED U/S 271(L)(C) OF THE ACT IN RESPECT OF ADDITION OF RS.L,31,22,205/ - ON ACCOUNT OF ADJUSTMENT U/S 92CA OF THE ACT. REJECTING THE VARIOUS EXPLANATION GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER LEVIED PENALTY OF RS.48,22,410/ - U/S 271 (1) (C) OF THE 5 I. T. ACT, 1961. 9 . BEFORE CIT (A) THE ASSESSEE SUBMITTED THAT IT HAS ADOPTED TNMM AS THE MOST APPROPRIATE METHOD AND APPLIED RETURN ON CAPITAL EMPLOYED AS APPROPRIATE PLI IN ORDER TO ESTABLISH THE NATURE OF ITS INTERNATIONAL TRANSACTION. IN THE TRANSFER PRICING (TP) DOCUMENTATION, THE A SSESSEE HAD RELIED ON TNMM AS THE MOST APPROPRIATE METHOD (MAM) AND APPLIED RETURN ON CAPITAL EMPLOYED ( OPERATING PROFIT / CAPITAL EMPLOYED OR OP/CE OR ROCE ) AS THE APPROPRIATE PROFIT LEVEL INDICATOR ( PLI ) IN ORDER TO ESTABLISH THE ARM S LENGTH N ATURE OF ITS INTERNATIONAL TRANSACTIONS. A SSESSEE USED COMPARABLES OF 9 COMPANIES FOR THE PURPOSE OF BENCHMARKING OF ALP. 10 . IT WAS SUBMITTED THAT ON THE BASIS OF THE DIRECTION OF THE TRIBUNAL THE ORIGINAL ADJUSTMENT OF RS.5,77,33,054/ - WAS BROUGHT DOWN TO RS.1,31,22,205/ - . IT WAS ARGUED THAT THE ADDITION WAS PRIMARILY BASED ON APPLICATION OF PLI AS OP BY SALES WHICH HAS BEEN AP PROVED BY THE CIT(A) AGAINST THE ORIGINAL ASSESSMENT AND REJECTING METHOD OF THE PROCEDURE OF THE TPO IN RESPECT OF APPLICATION OF OP/CE AS PLI AND USE OF CURRENT YEAR DATA AS COMPARABLES FOR COMPUTING ALP OF INTERNATIONAL TRANSACTION AND REJECTING THE BASED TWO YEAR DATA OF THE COMPARABLES. THEREFORE, THE ADDITION IS BASED PURELY ON DIFFERENCE OF OPINION AND IS BASED ON THE BAS IS OF JUDICIAL PRE C ED ENTS AND INTERPRETATION OF LAW S WHICH W ERE EMERGED AFTER THE FILING OF RETURN OF INCOME. 11 . REFERRING TO THE DECISION OF HON BLE HIGH COURT IN THE CASE OF CIT VS. ANAND BAZAR PATRIKA 116 ITR 416 , I T WAS SUBMITTED THAT WHEN THE ORIGI NAL BASIS OF INITIATION OF THE PENALTY PROCEEDINGS IS ALTER ED AND DISAPPROVED BY THE APPELLATE AUTHORITY, THE AUTHORITY INITIATING THE PENALTY PROCEEDINGS AS NO JURISDICTION TO PROCEED ON THE BASIS OF THE FINDINGS OF THE APPELLATE AUT HORITY. IT WAS FURTHER ARGUED THAT THERE IS NO FILING OF INACCURATE 6 PARTICULARS OF INCOME AND AT BEST IT C OULD FALL UNDER BONAFIDE DIFFERENCE OF OPINION ON D EB ATABLE AND CONT ENTIO U S ISSUES IN RESPECT OF COMPUTATION OF THE ALP OF INTERNATIONAL TRANSACTION. THE DECISION OF HON B LE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PRIVATE LIMITED REPORTED IN 230 ITR 320 WAS ALSO RELIED UPON TO THE PROPOSITION THAT WHERE THE INFORMATION GIVEN IS NO T FOUND TO BE INACCURATE, ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INA CCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF LEVY OF PENALTY U/S 271 (1) (C ) OF THE IT ACT. RELYING ON VARIOUS DECISIONS IT WAS ARGUED THAT AT NO POINT OF TIME IN THE TRANSFER PRICING ORDER OR THE IN THE ASSESSMENT PROCEEDINGS/ APPELLATE PROCEEDINGS ANY MATERIAL HAS BEEN BROUGHT ON RECORD TO ESTABLISH ANY CONCEALMENT OF ANY PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME . THERE IS NO ALLEGATION OR WHISPER BY THE TPO THAT THE PRICE PAID BY THE ASSESSEE WAS NOT COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTION 92 C IN THE MANNER PRESCRIBED UNDER THAT SECTION, IN GOOD FAITH AND DUE DILIGENCE. FURTHER IT IS ALSO NOT THE ALLEGATION OF THE ASSESSING OFFICER / TPO THAT THE ASSESSEE H AD NOT PREPARED RELYING ON VARIO US THE LEVY OF PENALTY U/S 271 (1) ( C) SHOULD BE DELETED. RELYING ON VARIOUS DECISIONS , I T WAS ARGUED THAT PENALTY U/S 271 (1) (C ) OF THE ACT 1961 IS NOT LEVIABLE UNDER THE FACTS AND CIRCUMSTANCES OF THIS CASE. 12 . BASED ON THE ARGUMENTS ADVANCED BY THE CIT (A), THE LD. CIT(A) CANCELLED THE PENALTY LEVIED BY THE ASSESSING OFFICER/ TPO BY OBSERVING AS UNDER : - I HAVE PERUSED THE WRITTEN SUBMISSIONS OF THE APPELLANT AS WELL AS THE ORDERS ENCLOSED WITH PAPERBOOK FILLED WITH SUBMISSION. IT IS FOUND THAT THE ADDITION UNDER SECTION 92CA OF THE ACT HAD BEEN MADE IN PURSUANT TO THE SPECIFIC DIRECTION OF THE HON BLE TRIBUNAL TO AO/TPO. ON SPECIFIC QUERY TO THE AR THAT WHY THE DIFFERENCE OF THE ADDITION PROPOSED BY THE CIT(A) IN ORDER AGAINST ORIGINAL ASSESSMENT O RDER IS REDUCED SIGNIFICANTLY EVEN THOUGH 7 THE PRINCIPLES APPLIED BY THE PRESENT ASSESSMENT ORDER IS IDENTICAL TO WHAT HAS BEEN ADOPTED BY THEN CIT(A). THE AR HAD SUBMITTED THAT THE SIGNIFICANT REDUCTION IN THE TP ADJUSTMENT WAS MAJORLY ON ACCOUNT OF THE DI RECTIONS/ORDER OF THE HON BLE TRIBUNAL WHEREIN THEY HAVE DIRECTED THE TPO TO RESTRICT THE TP ADDITION ONLY TO QUANTUM OF INTERNATIONAL TRANSACTION OF THE APPELLANT WITH ITS AE. THE SAME IS ALSO EXPLAINED BY THE AR FROM THE TP ORDER DATED 19.11.2012 PASSED BY THE TPO AND ORDER OF THE ITAT IN THIS REGARD. IN LIGHT OF ABOVE FACTUAL MATRIXES WHICH HAVE BEEN STATED BY THE APPELLANT IN ITS SUBMISSION AND EXPLAINED TO ME, THE ADDITION UNDER SECTION 92CA OF THE ACT IN THE HANDS OF THE APPELLANT WAS MADE ON ACCOUNT OF FOLLOWING TWO ISSUES WHICH THE APPELLANT HAD CONTENDED THAT THE SAME ARE DEBATEABLE AND LEADS TO BONAFIDE DIFFERENCE OF OPINION, THEREFORE THE PENALTY SO IMPOSED DESERVED TO BE DELETED: - 1 . CHOICE OF PLI 2 . USE OF CURRENT YEAR DATA OF COMPARABLES IT IS NOT IN DISPUTE THAT THE APPELLANT HAD USED THE PLI OPERATING PROFIT OVER CAPITAL EMPLOYED (OP/CE) FOR THE YEAR IN QUESTION, AND HAD DISCLOSED IN ITS TP STUDY GIVING THE JUSTIFICATION OF ITS USE FOR ITS BUSINESS OVER THE OTHER PLI. THE TPO IN FIRST ROUND OF ASS ESSMENT HAD NOT ACCEPTED, THE OP/CE AS AN APPROPRIATE PLI AND ADOPTED OP/TC TO COMPUTE THE ARM S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION. THE CIT(A) - XX IN ITS ORDER IN THE APPEAL OF THE APPELLANT AGAINST THE ORIGINAL ASSESSMENT FOR THE YEAR IN QUESTI ON EXPRESSLY MENTIONED THAT THE ISSUE FOR DETERMINATION IN THE PRESENT APPEAL WAS SELECTION OF APPROPRIATE PLI IN THE APPELLANT S CASE. THE CIT(A) IN THE SAME AFTER THE DETAILED DISCUSSION HELD THAT ON THE FACTS OF THE CASE, THE APPROPRIATE PLI IN THE APPE LLANT S CASE SHOULD BE OPERATING PROFIT BY SALES (OP/SALES) AND HELD THAT IT WOULD NOT BE APPROPRIATE TO USE OP/CE (ASSESEE S PLI) AND OP/TC (TPO S PLI) TO COMPUTE THE ARM S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION. THE ABOVE VIEW OF THEN CIT(A) CLEAR LY SHOWS THAT CHOICE OF PLI IS A 8 SUBJECTIVE EXERCISE WHICH CAN DIFFER BASED ON JUDICIAL PRECEDENTS AND APPROPRIATENESS ON THE BASIS OF THE CASE AND NO FIXED YARDSTICK COULD BE APPLIED FOR SELECTION OF PLI. IT IS PERTINENT TO ADD THAT THE REVENUE HAD NOT AC CEPTED THE ABOVE FINDING OF THE THEN CIT(A) AND CHALLENGED THE SAME BEFORE THE HON BLE ITAT. THE HON BLE ITAT REFERRED THIS ISSUE TO TPO TO DECIDE AFRESH. THE TPO IN REMAND PROCEEDINGS ACCEPTS THAT OPERATING PROFIT BY SALES (OP/SALES) IS AN APPROPRIATE PLI AGAINST ITS EARLIER STAND TAKEN IN THE ORIGINAL ASSESSMENT AND THE GROUND BEFORE THE HON BLE ITAT. THIS ALSO SHOWS THAT ISSUE OF CHOICE OF PLI IS DEBATEABLE AND BASED ON SUBJECTIVITY, AND IN NO MANNER IT COULD BE TERMED AS FILLING OF INACCURATE PARTICULAR OF INCOME. IN MY VIEW AND IN LIGHT OF THE ABOVE, THE CONTENTION OF THE APPELLANT NEEDS TO BE ACCEPTED THAT CHOICE OF PLI COULD MERELY TERMED AS BONAFIDE DIFFERENCE OF OPINION BETWEEN THE APPELLANT AND REVENUE AND CHOICE OF PLI IN THE PRESENT CASE IS CONTE NTIOUS AND DEBATEABLE ISSUE FOR WHICH PENALTY UNDER SECTION 271(L)(C) OF THE ACT COULD NOT BE LEVIED. WITH RESPECT OF THE USE OF CURRENT YEAR DATA OF THE COMPARABLES, THIS ISSUE IS ALSO DECIDED BY THE THEN CIT(A) WHEREIN IT HELD THAT THE MANDATE OF THE LAW IS TO APPLY THE CURRENT YEAR DATA OF THE COMPARABLES ONLY. THE TPO IN THE REMAND PROCEEDINGS ACCEPTED THE SAME AS IT HAS BEEN CONSISTENTLY UPHELD BY THE VARIOUS BENCHES OF THE TRIBUNAL. THUS, IT COULD ALSO NOT BE BASIS TO LEVY' A PENALTY UNDER SECTION 271 (1 )(C) OF THE ACT. THE APPELLANT IN ITS SUBMISSION PLACED RELIANCE IN THE CASE OF CIT VS ANAND BAZAR PATRIKA 116 ITR 416 WHEREIN THE HON BLE KOLKATA HIGH COURT HELD THAT WHERE IAC HAS DISAPPROVED THE BASIS OF ADDITION MADE BY THE LD. AO BUT UPHELD THE ADD ITION ON SOME OTHER GROUND. IN THOSE FACTS, THERE IS NO BASIS LEFT TO AO FOR LEVY PENALTY AS BASIS OF ADDITION HAVE BEEN ALTERED AND DISAPPROVED BY THE APPELLATE AUTHORITY. THE FACTS OF THE CASE OF THE APPELLANT SOMEWHAT SIMILAR AS THE TPO HAD APPLIED NO N EW BASIS OR METHODOLOGY TO MAKE ABOVE ADDITION, BUT SIMPLY ACCEPTED THE POSITION 9 APPROVED BY THE CIT(A) IN ITS ORDER I.E. APPLICATION OF OP/SALES AS PLI AND USE OF CURRENT YEAR DATA OF COMPARABLES AND HAS GIVEN EFFECT TO THE DIRECTIONS OF THE HON BLE ITAT. THESE FACTS ALSO STRENGTHEN THE CASE OF THE APPELLANT THAT THERE ARE NO INACCURATE PARTICULARS OF INCOME FURNISHED BY THE APPELLANT. SIMILARLY, IT IS ALSO FOUND THAT EVEN IN THE REMAND PROCEEDINGS AS WELL AS IN ORIGINAL PROCEEDINGS BEFORE THE AO/TPO, THER E IS NO ALLEGATION THAT THE TP DOCUMENTATION OF APPELLANT IS DEFECTIVE OR DO NOT DISCLOSE THE METHODOLOGY ABOUT THE PRICE CHARGED OR PAID IN AN INTERNATIONAL TRANSACTION IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTION 92C OF THE ACT AND IN THE MANNE R PRESCRIBED UNDER THAT SECTION, IN GOOD FAITH AND WITH DUE DILIGENCES. ON PERUSAL OF THE TP STUDY, IT IS EVIDENT THAT THE APPELLANT HAS DULY DISCLOSED TRULY AND FULLY ALL THE FACTS/METHODOLOGY ADOPTED IN RESPECT OF DETERMINATION OF ALP OF ITS INTERNATIONA L TRANSACTION, THEREFORE IN LIGHT OF THE EXPLANATION 7 TO SECTION 271(L)(C) OF THE ACT AND IN VIEW OF THE DECISIONS IN THE CASES CITED ABOVE NAMELY BS EQUITIES INDIA LTD., IT APPEAL NO. 2570 (MUM.) OF 2010 (SUPRA) AND OTHER, I AM OF THE VIEW THAT THE PENAL TY SO LEVIED IN THE IMPUGNED ORDER DESERVED TO BE DELETED ON THIS GROUND ALSO IN ADDITION TO PRIMARY CONTENTION OF THE APPELLANT THAT THE ADDITION IS MERELY BASED ON DIFFERENCE OPINION ON DEBATEABLE ISSUE. 13 . AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 1 4 . WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THE ASSESSING OFFICER LEVIED PENALTY OF RS. 48,22,410/ - U/S 271 (1) (C) OF THE IT ACT, 1961 ON THE ADD ITION OF RS.1,31, 22,205/ - FINALLY DETERMINED ON THE BASIS DIRECTION OF THE TRIBUNAL. WE FIND THE LD. CIT (A) DELETED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER, THE REASONS OF WHICH HAVE ALREADY BEEN REPRODUCED IN THE 10 PRECEDING PARAGRAPH. WE FIND THE ADDITION FINALLY SUSTAINED BY THE ASSESSING OFFICER / TPO IS ON ACCOUNT CHOICE OF PLI AND USE OF CURRENT YEAR DATA OF COMPARABLES. SO FAR AS THE CHOICE OF PLI IS CONCERNED WE FIND THE ASSESSEE HAD APPLIED OP/CE AS THE APPROPRIATE PROFIT LEVEL INDICATOR AS AGAINST OP/TC ADOPTED BY THE TPO IN THE FIRST ROUND OF LITIGATION. WE FIND THE CIT(A) DIRECTED FOR ADOPTION OP/ SALES AS PLI WHICH WAS SET ASIDE BY THE TRIBUNAL TO THE TP O FOR ADJU DICATION OF THE ISSUE AFRESH. WE FIND THE TPO IN THE REMAND PROCEEDINGS A D OPTED THE OP/ SALES AS THE PLI. THUS, THE ISSUE IN OUR OPINION I S A DEBATABLE ONE AND THE CONDUCT OF THE ASSESSEE IN PREPARING THE TP STUDY REPORT ON THE BASIS OF OP/CE CANNOT BE TERMED AS BONAFIDE. W E , THEREFORE, AGREE WITH THE FINDINGS OF LD. CIT(A) THA T THE CHOICE OF THE PLI IN THE PRESENT CASE IS A CONT E N TIONS AND DEBATABLE ISSUE AND THEREFORE PENALTY U/S 271 (1) (C ) OF THE IT ACT CANNOT BE LEVIED. 1 5 . SO FAR AS THE SECOND I SSUE IS CONCERNED I.E. ADOPTION OF CURRENT YEAR DATA AS AGAINST MULTI PLE YE AR DATA , W E FIND THE ASSESSMENT YEAR IN THE INSTANT CASE IS A. Y. 2 003 - 04 AND AT THAT PARTICULAR POINT OF TIME THE TP ISSUE S WERE AT NASCENT STAGE. THE ISSUE AS TO ADOPTION OF CURRENT YEAR DATA OR MULTI PLE YEAR DATA OF THE COMPARABLES WAS A DEBATABLE ISSUE AT THAT PARTICULAR PERIOD. T HEREFORE ADOPTION OF MULTI PLE YEAR DATA OF THE COMPARABLES CANNOT BE TREATED AS FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PARTICULARS OF INCOME. IT C ANNOT BE SAID THAT THE TP DOCUMENTATION OF THE ASSESSEE IS DE FECTIVE OR DOES NOT DISCLOSE METHODOLOGY ABOUT THE PRICE CHARGED OR PAID IN RESPECT OF INTERNATIONAL TRANSACTION IN ACCORDANCE WITH THE PROVISION S CONTAINED IN SECTION 92C OF THE ACT. MERELY BECAUSE T HE ASSESSEE HAS NOT PREFERRED AN Y APPEAL AGAINST THE QU ANTUM ADDITION FINALLY SUSTAINED BY THE ASSESSING OFFICER / TPO , THE SAME IN OUR OPINION DOES NOT ATTRACT LEVY OF PENALTY. IN THE INSTANT CASE BOTH THE ISSUES ON WHICH THE ADDITION HAS BEEN MADE OR SUSTAINED BY ASSESSING OFFICER / TPO ARE HIGHLY DEBATABLE ISSUES . W E, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE DETAILED AND REASONED ORDER OF THE LD. CIT(A) CANCELLING THE PENALTY 11 LEVIED BY THE ASSESSING OFFICER. WE, THEREFORE, UPHOLD THE SAME AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 1 6 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. O RDER P RONOUNCED IN THE OPEN COURT ON 17 . 1 0.2018 SD/ - SD/ - ( SUCHITRA KAMBLE ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTAN T MEMBER *NEHA* DATE: - 17 . 1 0.2018 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 12 DATE OF DICTATION 01.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTA TING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 22.10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD C LERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER