DSV AIR & SEA PVT. LTD, MUMBAI V. JCIT (OSD) 8(1), MUMBAI

ITA 409/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4041 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESHPANDE
• Keywords: Transfer pricing; Principle of natural justice; International transaction; Additional evidence
• Section: 143(3)

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL -KBENCH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C.N. PRASAD,JUDICIAL MEMBER ./I.T.A./409/MUM/2015, /ASSESSMENT YEAR: 2008-09 DSV AIR & SEAS PRIVATE LTD. B-201,204 THE QUBE OFF INTERNATIONAL AIRPORT ROAD,MAROL,ANDHERI,MUMBAI-59. PAN:AACCD3848A VS. JCIT(OSD)-8(1), AAYAKAR BHAVAN,M K ROAD MUMBAI-400020. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI SAURABH DESHPANDE ASSESSEE BY: S/SHRI M. P. LOHIA & NIKHIL TIWARI / DATE OF HEARING: 20.04.2016 / DATE OF PRONOUNCEMENT: 20.04.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DTD.14/10/2014 OF THE CIT (A) -15,MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL RAISING,EIGHT GROUNDS OF APPEAL. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF PROVIDI NG FREIGHT FORWARDING SERVICES,FILED ITS RETURN OF INCOME ON 30/09/2008 DECLARING TOTAL LOSS AT RS. 38.40 LAKHS.THE ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT ON 31/01/2012, UNDER SECTI ON 143(3) R.W.S.144C(3)(B)OF THE ACT, DETERMINING THE INCOME OF THE ASSESSEE AT RS. 5.65 LACS.DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD ENTERED INTO INTERNA TIONAL TRANSACTIONS.THEREFORE, HE MADE A REFERENCE TO THE TRANSFER PRICING OFFICER(TPO)WHO P ROPOSED CERTAIN ADJUSTMENTS.THE ASSESSEE FILED OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANE L (DRP).THE AO, AFTER THE COMPLETION OF THE PROCEEDINGS BEFORE THE DRP,COMPLETED THE ASSESSMENT MAKING ADDITIONS TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).THE ASSESSEE MADE ELABORATE SUBMISSI ONS BEFORE HIM WITH REGARD TO TP ADJUSTMENTS.IT WAS ALSO STATED THAT THE TPO HAD,VID E ORDER SHEET ENTRY DATED 21/02/2011,HAD SCHEDULED THE HEARING ON 25/02/2011 WITH REGARD TO DECIDE THE ISSUE OF ALP OF THE INTERNATIONAL TRANSACTIONS,THAT DESPITE BEING PROVIDED WITH LIMIT ED TIME TO FURNISH INFORMATION/DOCUMENTS TO SUBSTANTIATE THE NATURE OF THE INTRA-GROUP SERVICES AS WELL AS THE BENEFITS DERIVED FROM SUCH SERVICES THE ASSESSEE FURNISHED THE INFORMATION TO THE EXTENT THAT COULD BE COMPILED,THAT THE TPO PASSED THE ORDER ON 28/02/201,THAT HE HAD NOT GRANT ED SUFFICIENT TIME TO THE ASSESSEE FOR SUBSTANTIATING THE NATURE AND BENEFITS DERIVED FROM THE GROUP MANAGEMENT COSTS.THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCES BEFORE THE FAA,INCLU DING DETAILED DESCRIPTION OF THE VARIOUS CATEGORIES OF INTRA-GROUP SERVICES AND BRIEF WRITE- UP OF THE FINANCIAL PORTALS,EMAIL DOCUMENTARY EVIDENCES ALONG WITH TABULAR SUMMARY TO SUBSTANTIAT E THE NATURE OF THE GROUP MANAGEMENT SERVICES.IT WAS ARGUED THAT THE EVIDENCES DID NOT B RING ANY NEW FACTS ON RECORD BUT MERELY SUPPORTED THE FACTS ALREADY ON RECORD BEFORE THE TP O.THE FAA HELD THAT THE TPO HAD ISSUED A DETAILED QUESTIONNAIRE ON 19.11.2010 TO THE ASSESSE E ASKING FOR THE INFORMATION IN SUPPORT OF 409/M/15DSV AIR 2 ALP FOR THE INTERNATIONAL TRANSACTIONS REPORTED, TH AT A SHOW CAUSE NOTICE WAS ISSUED ON 21/02/ 2011,THAT IT HAD SUFFICIENT TIME AT ITS DISPOSAL FO R FURNISH ALL THE EVIDENCE BEFORE THE TPO,THAT IT HAD FAILED TO PROVIDE THE BASIS OF COMPETITION OF G ROUP MANAGEMENT FEES,THAT THE ASSESSEE WANTED TO FILE ADDITIONAL EVIDENCES IN FORM OF COST ALLOCA TION WORKING,EXTRACT OF SHAREHOLDER AGREEMENTS. REFERRING TO THE CASE OF VALJI DEVRAJ & COMPANY(68 ITR 708) OF THE HONBLE BOMBAY HIGH COURT,THE FAA DID NOT ADMIT THE ADDITIONAL EVIDENCE S PRODUCED BY THE ASSESSEE. FINALLY, HE DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)STATED T HAT THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE WERE IN SUPPORT OF THE ARGUMENTS ADVAN CED BY IT,THAT THE SHOW CAUSE NOTICE GAVE ONLY FOUR DAYS TIME TO SUBSTANTIATE THE ARGUMENTS,T HAT THE ASSESSEE COULD COMPILE CERTAIN DETAILS, THAT THE ADDITIONAL EVIDENCES WERE IMPORTANT TO THE DECIDE THE ISSUES IN QUESTION.HE REFERRED TO THE CASE OF AVAN GIDWANI(ITA/5138/MUM/2015,DTD.06.0 4.2016 IN HIS SUPPORT.THE DEPARTMENTAL REPRESENTATIVE (DR)STATED THAT THE ASSESSEE WAS GIV EN AMPLE TIME. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.IN OUR OPINION,BEFORE DECIDING THE GROUNDS OF APPEAL ON MERITS,THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCES HAS TO BE ADJUDICATED.WE FIND THAT DURING THE APPELLATE PROCE EDINGS,THE ASSESSEE HAD SUBMITTED CERTAIN DETAILS WITH REGARD TO TP ADJUSTMENTS.IN OUR OPINIO N,THESE DETAILS WOULD BE HELPFUL IN DECIDING THE APPEAL.THE PROPER COURSE OF DISPOSING THE FIRST APPEAL WOULD HAVE BEEN TO REFER THE ADDITIONAL EVIDENCES TO THE TPO/AO AND TO CALL FOR A REMAND RE PORT.BUT,THE FAA REJECTED THE REQUEST OF THE ASSESSEE FOR ADMITTING THE ADDITIONAL EVIDENCE.IN O UR OPINION,THE ASSESSEE HAS BEEN PENALISED ENOUGH FOR NOT SUBMITTING THE PAPERS BEFORE THE TPO .BUT,THE PRINCIPLES OF NATURAL JUSTICE DEMAND THAT ONLY DUE TAXES SHOULD BE COLLECTED AND FOR THA T ALL THE EVIDENCES SHOULD BE CONSIDERED. IN THE CASE OF AVAN GIDWANI(SUPRA),THE TRIBUNAL HAS HELD T HAT RULE 46A OF THE INCOME TAX RULES COULD NOT OVERRULE THE BASIC PRINCIPLES OF NATURAL JUSTIC E.CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANC -ES OF THE CASE,WE ARE OF THE OPINION THAT MATTER S HOULD BE RESTORED BACK TO THE FILE OF FAA FOR ADMITTING THE ADDITIONAL EVIDENCES,SUBMITTED BY THE ASSESSEE FOR DECIDING THE MATTER AFRESH.AS WE ARE SETTING ASIDE THE ORDER OF THE FAA,WE ARE NO T DECIDING THE OTHER ISSUE RAISED BY THE ASSESSEE.THE FAA MAY ALSO DIRECT THE AO TO GIVE CRE DIT OF TAX DEDUCTED AT SOURCE(GOA 7). AS A RESULT,APPEAL FILED BY TH E ASSESSEE STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH ,APRIL, 2016. 20 , 2016 SD/- SD/- ( . . / C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 20.04.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 409/M/15DSV AIR 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR K BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.