M/s WEG Industries (India) Pvt.Ltd., Bangalore V. Income-Tax Officer, Bangalore

ITA 419/BANG/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8233 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 21-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M VIJAY KUMAR
• Assessee Lawyers: PAYAL SHAH
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER IT (TP) A NO . 419 / BANG/201 7 ASSESSMENT YEAR : 20 12 - 13 M/S. WEG INDUSTRIES (INDIA) PVT. LTD., NO. 38, GROUND FLOOR, 1 ST MAIN ROAD, LOWER PALACE ORCHARDS, BANGALORE 560 003. PAN: AAACW7745D VS. THE INCOME TAX OFFICER, WARD 7 (1) (4), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : MS. PAYAL SHAH, CA RESPONDENT BY : SHRI M. VIJAY KUMAR, ADDL. CIT (DR) DATE OF HEARING : 31 . 1 2 .2018 DATE OF PRONOUNCEMENT : 31. 1 2 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ASSESSMENT ORDER DATED 16.12.2016 PASSED BY THE AO U/S. 143(3) R.W.S. 144C (13) OF IT ACT, 1961 FOR ASSESSMENT YEAR 2012- 13 AS PER THE DIRECTIONS OF DRP. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. TP ISSUES: 1. THE AO/TPO ERRED IN PASSING THE ORDER WITHOUT CO NSIDERING THE OBJECTIONS RAISED BY THE APPELLANT VIDE ITS REPLY D ATED 19.01.2016 TO THE SHOW CAUSE NOTICE DATED 08.12.2015. 2. THE AO/TPO'S OBSERVATION THAT THE APPELLANT SEAR CHED ONLY ONE DATA BASE VIZ., CAPITALINE AND NOT PROWESS DATA BAS E IS NOT VALID IN LAW. 3. THE TPO ERRED IN ARRIVING AT PLI BY TAKING COMPA RABLES WHOSE FUNCTIONS ARE NOT SIMILAR TO THAT OF THE APPELLANT. 4. THE TPO ERRED IN CHOOSING COMPARABLES WHOSE TURN OVER WAS BEYOND THE LIMITS LAID DOWN BY THE HON'BLE TRIBUNAL VIZ., 1/10 TH TO 10 IT(TP)A NO. 419/BANG/2017 PAGE 2 OF 3 TIMES OF THE TURNOVER OF THE TESTED PARTY. 5. THE TPO ERRED IN INCLUDING COMPANIES WHICH HAD R ELATED PARTY TRANSACTIONS OF ABOVE 25% OF SALES AS COMPARABLES T O ARRIVE AT PLI OF THE APPELLANT. 6. THE TPO ERRED IN INCLUDING COMPANIES THAT HAVE B EEN MAKING LOSSES PERSISTENTLY AS COMPARABLES. 7. THE TPO ERRED IN APPLYING INDUSTRIAL SALES FILTE R WHEN HE SELECTED COMPANIES WITH INDUSTRIAL SALES ABOVE 25% OF TOTAL TURNOVER. 8. THE TPO ERRED IN NOT PROVIDING ADJUSTMENT FOR UN DER-UTILIZATION OF CAPACITY. 9. THE TPO ERRED IN NOT PROVIDING ADJUSTMENT DUE TO UNDER-UTILIZATION OF CAPACITY WHICH RESULTED FROM GESTATION/INITIAL P ERIOD OF THE APPELLANT. 10. THE TPO ERRED IN NOT GRANTING RISK ADJUSTMENT. 11. THE TPO ERRED IN NOT ACCEPTING THE PRICING STUD Y MADE BY THE APPELLANT. NON-TP ISSUES: 12. THE AO ERRED IN NOT ALLOWING DEPRECIATION AS CL AIMED TOWARDS BUILDING AND MACHINERY. 13. THE EX-PARTE ORDER PASSED BY THE DRP/AO WITHOUT PROVIDING FAIR OPPORTUNITY TO THE APPELLANT IS BAD IN LAW AND REQU IRES TO BE SET ASIDE. 14. WITHOUT PREJUDICE, THE IMPUGNED ADDITIONS AS MA DE ARE ARBITRARY AND OUGHT TO BE REDUCED SUBSTANTIALLY. 15. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THE ORDER PASSED BY THE DRP ON 30.11.2016 IS EX-PARTE QUA THE ASSESSEE. HE FURTHER POINTED OUT THAT ONLY ONE DATE OF HEARING WAS FIXED ON 21.11.2016 AND THE ORDER WAS PASSED ON 30.11.2016. HE SUBMITTED THAT UNDER THESE FACTS, THE MATTER MAY BE RESTORED BACK TO THE FILE OF DRP FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. THE LD. DR OF REVENUE SUBMITTED THAT IT WAS NOTED BY DRP IN PA RAS 1 AND 2 OF ITS DIRECTIONS THAT TWO DATES WERE FIXED FOR HEARING I. E. ON 20.10.2016 AND 21.11.2016 BUT ON NONE OF THESE DATES, ANYBODY APPE ARED BEFORE DRP ON IT(TP)A NO. 419/BANG/2017 PAGE 3 OF 3 BEHALF OF THE ASSESSEE AND EVEN NO REQUEST WAS MADE FOR ADJOURNMENT. HE SUBMITTED THAT UNDER THESE FACTS, THE ORDER OF DRP SHOULD BE CONFIRMED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FE EL THAT IN THE INTEREST OF JUSTICE, THE DRP SHOULD HAVE PROVIDED SOME MORE OPP ORTUNITIES OF BEING HEARD TO THE ASSESSEE AND ONLY THESE TWO OPPORTUNIT IES DOES NOT AMOUNT TO PROVIDING SUFFICIENT OPPORTUNITIES AND HENCE, WE SE T ASIDE THE ASSESSMENT ORDER PASSED BY THE AO AS PER THESE DIRECTIONS OF D RP AND RESTORE THE MATTER BACK TO THE FILE OF DRP FOR FRESH DECISION A FTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARDING THE MERIT OF T HE CASE AT THE PRESENT STAGE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF H EARING ON CONCLUSION OF THE HEARING. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODI A) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, 31 ST DECEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.