Appeal details
Counselvise Citation
343220114 RSA 2010
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-10-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Next Hearing Date
24-10-2011
Assessment Year
2006-2007
Appeal Filed On
13-07-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C DELHI BEFORE SHRI C.L. SETHI AND SHRI K.G. BANSAL ITA NO. 3432(DEL)/2010 ASSESSMENT YEAR: 2006-07 GLOBERIAN INDIA PVT. LTD., DE PUTY COMMISSIONER OF C-511, CHITRANJAN PARK, VS. INCOM E-TAX, CIRCLE 12(1), NEW DELHI-110019. NE W DELHI. PAN: AAACG2019N (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI RAHUL KHARE, ADVOCATE RESPONDENT BY: SHR I MOHNISH VERMA, CIT, DR DATE OF HEARING : 24.10.2011 DATE OF PRONOUNCEMENT : 24.10.2011. ORDER PER K.G. BANSAL : AM THE ASSESSEE HAS TAKEN UP TWO GROUNDS IN THE APP EAL TO THE EFFECT THAT THE LD. DY. CIT ERRED ON FACTS AND IN LAW IN MAKING- (I) DISALLOWANCE OF RS. 84,81,078/- IN RESPECT OF DEP RECIATION ON COMPUTERS; AND (II) ADDITION OF RS. 1,93,31,266/- BEING UPW ARD REVISION IN THE VALUE OF INTERNATIONAL TRANSACTIONS UNDERTAKEN WITH ASSO CIATED ENTERPRISES TO BRING THEM IN LINE WITH ARMS LENGTH PRICE. 2. IN THE COURSE OF HEARING BEFORE US, THE LD. AUT HORIZED REPRESENTATIVE OF THE ASSESSEE REFERRED TO PARAGRAPH NOS. 6 AND 7 OF THE ORDER OF LD. ITA NO. 3432(DEL)/2010 2 DISPUTE RESOLUTION PANEL, NEW DELHI (DRP FOR S HORT). IN PARAGRAPH NO. 6, IT IS MENTIONED THAT THE FIRST OBJECTION RELAT ES TO THE CLAIM OF DEPRECIATION ON CERTAIN ASSETS AT 60%, WHICH HAS BEEN RESTRI CTED TO 30% AS NONE OF THE ASSETS FALLS IN THE DEFINITION OF COMPUTER. IN THIS CONNECTION, THE LIST OF ASSETS CLASSIFIED AS COMPUTER HAS BEEN PERUSED, WHICH SHOWS THAT THESE ARE COMPUTER HARDWARE COMPONENTS, IN-PUT AND OUT- PUT DEVICES AND COMPUTER PERIPHERALS. THESE ASSETS ARE NOT CO MPUTERS AND, THEREFORE, THERE IS NO INFIRMITY IN THE FINDING OF THE AO. 2.1 IN PARAGRAPH NO.7, IT IS MENTIONED THAT THE ARGUMENTS OF THE ASSESSEE HAVE BEEN EXAMINED. IT HAS RELIED ON TH E DECISION OF HONBLE ITAT IN THE CASE OF MENTOR GRAPHICS LTD., 109 ITD 101. IT HAS BEEN SUBMITTED THAT THE FACTS ARE COMPARABLE. HOWEVER , NO SPECIFIC FINDING, WHICH IS APPLICABLE TO THE CASE OF THE ASSESSEE, HAS BEEN BROUGHT OUT. THIS MATTER HAS ALSO BEEN DISCUSSED. THE TRANSFER P RICING OFFICER (TPO FOR SHORT) HAS CHOSEN PROPER COMPARABLES AND HEA RD THE ASSESSEE AT LENGTH. BENCHMARKING HAS ALSO BEEN DONE BY THE TP O. THUS, DRAFT ORDER HAS BEEN UPHELD ON THIS GROUND ALSO. ITA NO. 3432(DEL)/2010 3 2.2 THE CASE OF THE LD. COUNSEL IS THAT THE ASSE SSEE IS ENTITLED TO DEDUCTION @ 60% ON VARIOUS ASSETS AS HELD IN T HE CASE OF CIT VS. BSES RAJDHANI POWERS LTD., DATED 31.08.2010, DEC IDED BY HONBLE DELHI HIGH COURT, A COPY OF WHICH HAS BEEN PLACED BEFORE US. IT HAS BEEN HELD THAT THE COMPUTER ACCESSORIES AND PERIPHERALS, S UCH AS PRINTER, SCANNER, SERVER ETC. FORM AN INTEGRAL PART OF COMPUTER S YSTEM. IN FACT, THE COMPUTER ACCESSORIES AND PERIPHERALS CANNOT BE USED WITHOUT COMPUTER. CONSEQUENTLY, AS THEY ARE PART OF THE COMPUTER SYSTEM, THEY ARE ENTITLED TO DEPRECIATION AT THE HIGHER RATE OF 60%. 2.3 IN REGARD TO ADJUSTMENT TO THE VALUE OF INTE RNATIONAL TRANSACTIONS, IT IS SUBMITTED THAT THE ORDER OF THE LD. DRP DOES N OT TAKE INTO ACCOUNT THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE IT. IT I S A SUMMARY ORDER AND IT DOES NOT SHOW HOW THE SELECTION OF CASES AND BENCHMARKING DONE BY THE TPO IS IN ORDER. THE ASSESSEE HAD FURNISHED CAS E-WISE OBJECTIONS TO CERTAIN COMPARABLE CASES INCLUDED OR EXCLUDED BY THE TPO. THIS HAS NOT BEEN DISCUSSED AT ALL. THEREFORE, IT IS ARGUED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO SO THAT THE ASSESS EES SUBMISSIONS MAY BE CONSIDERED AT LENGTH BY THE LD. DR. ITA NO. 3432(DEL)/2010 4 3. IN REPLY, THE LD. DR SUBMITTED THAT THE MATT ER REGARDING DEDUCTION OF DEPRECIATION AT HIGHER RATE ON COMPUTER ACCE SSORIES AND PERIPHERALS MAY ALSO BE RESTORED TO THE FILE OF THE AO WITH A VIEW TO EXAMINE THAT THE ASSETS ON WHICH HIGHER DEPRECIATION HAS BEEN CLA IMED ARE SAME OR SIMILAR TO THE ASSETS INVOLVED IN BSES RAJDHANI POWERS L TD. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE A ND SUBMISSIONS MADE BEFORE US. IN SO FAR AS DEDUCTION OF DEPRECIAT ION @ 60% IS CONCERNED, THE MATTER STANDS COVERED UNDER THE AFORESAID DECISION, IN WHICH IT HAS BEEN HELD THAT HIGHER RATE OF 60% IS APPLICABLE T O COMPUTER ACCESSORIES AND PERIPHERALS AS THEY CANNOT BE USED WITHOUT THE COMPUTER. HOWEVER, THE FACT AS TO WHETHER THE ASSETS OF THE ASSESSEE C AN OR CANNOT BE USED WITHOUT COMPUTER HAS NOT BEEN DISCUSSED ANYWHERE. THEREFORE , WE AGREE WITH THE LD. DR THAT THIS ISSUE REQUIRES RE-EXAMINATION ON THE PART OF THE AO IN THE LIGHT OF THE AFORESAID DECISION OF THE JURISDIC TIONAL HIGH COURT. 4.1 COMING TO ADJUSTMENT TO THE VALUE OF INTERNAT IONAL TRANSACTIONS, IT IS CLEAR THAT THE LD. DRP HAS APPROVED THE DRAFT OR DER WITHOUT CONSIDERING VARIOUS SUBMISSIONS MADE BY THE ASSESSEE AND TH EIR VALIDITY. THEREFORE, THIS MATTER ALSO REQUIRES RECONSIDERATION. ITA NO. 3432(DEL)/2010 5 4.2 IN THE LIGHT OF AFORESAID DISCUSSION, BOTH THE ISSUES ARE RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER GRANTING REASONABLE OPPORTUNITY OF BEARING HEARD TO THE ASSESSEE. T HUS, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (C.L. SETHI) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- GLOBERIAN INDIA PVT. LTD., NEW DELHI. DCIT, CIRCLE 12(1), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.
