M/s Philips India Ltd., Kolkata V. DCIT, CIR-11(2), KOLKATA, Kolkata

ITA 472/KOL/2015

• Counselvise Citation: 47223514 RSA 2015
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: D S DAMLE; AKKAL DUDHWEWALA ACA
• Keywords: Transfer pricing; Opportunity of being heard; International transaction; Rule of consistency; Capital expenditure
• Section: 92C; 143(3)

Judgement Text

I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 472 / KOL / 20 1 5 ASSESSMENT YEAR : 20 10 - 20 11 M/S. PHILIPS INDIA LIMITED,..................... .... .. . APPELLANT 7, JUSTICE CHANDRA MADHAB ROAD, KOLKATA - 700 020 [PAN : AABCP 9487 A] - VS. - DEPUTY COMMISSIONER OF INCOME TAX,........... . RESPONDE NT CIRCLE - 11(2), KOLKATA, AAYAKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 APPEARANCES BY: SHRI D.S. DAMLE, FCA, AND SHRI AKKAL DUDHWEWALA, ACA, FOR THE ASSESSEE SH RI NIRAJ KUMAR , CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : AUGUST 0 5 , 2 01 5 DATE OF PRONOUNCING THE ORDER : AUGUST 10 , 201 5 O R D E R PER S.V. MEHROTRA : THIS A PPEAL HA S BEEN FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. MEMBERS, DISPUTE RESOLUTION PANEL (DRP), KOLKATA AND COMMISSIONER OF INCOME TAX , KOLKATA D ATED 31 . 12 .20 1 4 FOR THE ASSESSMENT YEAR 20 10 - 11 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSE SS E E IS A PART OF THE ROYAL PHILIPS ORGANIZATION, HEADQUARTERED IN THE NETHERLANDS. THE OVERALL PARENT COMPANY IN THIS REGARD IS KONINKLIJKE PHILIPS ELECTRONICS NV (HEREAFTER, KPENV), WHICH IS ORGANIZED IN THE NETHERLANDS. AS PER THE SUBMISSIONS OF THE ASS ESSEE, ROYAL PHILIPS IS ORGANISED INTO THE FOLLOWING PRODUCT DIVISIONS: - (I) PHILIPS CONSUMER ELECTRONICS: THIS DIVISION DEVELOPS, MANUFACTURES AND MARKETS A WIDE RANGE OF TELEVISION, AUDIO, VIDEO, COMMUNICATIONS AND INTERACTIVE MEDIA SYSTEMS. I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 2 OF 9 (II) PHILIP S DOMESTIC APPLIANCES AND PERSONAL CARE: THIS DIVISION MAKES A WIDE RANGE OF ELECTRICAL PRODUCTS FOR PERSONAL CARE AND HOUSEHOLD CONVENIENCE. (III) PHILIPS LIGHTING: THIS DIVISION IS THE GLOBAL LEADER IN LAMPS, LUMINARIES, LIGHTING ELECTRONICS, AUTOMOTIVE LIGHTING, SPECIAL LIGHTING, UHP & LCD BACKLIGHTING AND LUMILEDS. (IV) PHILIPS MEDICAL SYSTEMS: THIS DIVISION IS ONE OF THE WORLD LEADERS IN DIAGNOSTIC IMAGING SYSTEMS AND RELATED SERVICES. (V) PHILIPS SEMICONDUCTORS: THIS DIVISION SUPPLIES SILICON SYSTE M SOLUTIONS FOR MOBILE COMMUNICATIONS, CONSUMER ELECTRONICS, DIGITAL DISPLAYS, CONTACTLESS PAYMENTS AND CONNECTIVITY, AND IN - CAR ENTERTAINMENT AND NETWORKING. (VI) OTHER ACTIVITIES: RELATED TO CORPORATE TECHNOLOGY, CORPORATE INVESTMENTS, ETC. 3. THE ASSE SSEE - COMPANY FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,76,99,50,492/ - . THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD ENTERED INTO A VARIETY OF INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES DURING THE FINANCIAL YEAR 2009 - 1 0 AND THEREFORE, WITH THE PRIOR APPROVAL OF LD. COMMISSIONER OF INCOME TAX UNDER SECTION 92CA, THE TRANSACTIONS WERE REFERRED TO THE LD. TRANSFER PRICING OFFICER (TPO) FOR DETERMINATION OF ARM S LENGTH PRICE. THE LD. TPO HAD MADE A TOTAL ADDITION IN RESPEC T OF THE INTERNATIONAL TRANSACTIONS AMOUNTING TO RS.2,40,81,54,413/ - . THE ASSESSING OFFICER PASSED THE DRAFT ASSESSMENT ORDER WITH REFERENCE TO THE ADJUSTMENTS DIRECTED BY THE LD. TPO. THE ASSESSEE FILED OBJECTIONS BEFORE THE LD. DISPUTE RESOLUTION PANEL ( DRP) AND THE LD. DRP VIDE ITS ORDER DATED 31.12.2014 REJECTED THE ASSESSEE S OBJECTIONS. THE ASSESSING OFFICER PASSED THE ORDER IN CONSEQUENCE TO THE DIRECTION OF LD. D RP VIDE ORDER DATED 26.02.2015. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL AND HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: - BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, PHILIPS INDIA LIMITED (HERE - IN - AFTER REFERRED TO AS 'PIL'/'APPELLANT') RESPECTFULLY CRAVES LEAVE TO PREFER AN APPEAL AGAINST THE ORDER DATED 26 FEBRUA RY 20 IS ISSUED BY DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - I 1(2), KOLKATA ('AO') IN I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 3 OF 9 PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL ('DRP') RECEIVED ON 2 JANUARY 2015 ON THE FOLLOWING GROUNDS: 1. ORDERS BAD IN LAW AND ON FACTS 1.1. THAT T HE ASSESSMENT ORDER PASSED BY THE LEARNED AO UNDER SECTION 143(3) READ WITH SECTION 144C AND READ WITH THE ORDER PASSED BY THE LEARNED TRANSFER PRICING OFFICER (HEREINAFTER REFERRED AS 'TPO'), UNDER SECTION 92CA(3) OF THE ACT IS BAD IN LAW AND VOID AB - INIT IO. 1.2. THAT THE LEARNED DRP ERRED IN NOT HOLDING THAT THE ORDER OF TPO AND THE DRAFT ORDER OF THE AO (IN SO FAR IT RELATES TO TRANSFER PRICING PROCEEDINGS) ARE VOID AB INITIO AS THE CONDITIONS OF SECTION 92C (3) OF THE ACT HAVE NOT BEEN SATISFIED. L. 3. THE ORDER OF ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 144C, NOT HAVING BEEN COMMUNICATED TO THE ASSESSEE WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH THE DIRECTIONS FROM DRP WAS RECEIVED, IS BARRED BY LIMITATION AND, AS SUCH, INVALID IN LAW. 2. DETERMINATION OF ARM'S LENGTH PRICE BY THE AO, TPO AND DRP FOR MANAGEMENT SUPPORT SERVICES RECEIVED BY THE APPELLANT O N THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO, DRP AND TPO ERRED IN REJECTING THE TRANSFER PRICING ANALYSIS UNDERT AKEN BY THE APPELLANT WITH RESPECT TO THE MANAGEMENT SUPPORT SERVICES WITHOUT APPRECIATING THE CONTENTIONS, ARGUMENTS, VOLUMINOUS DOCUMENTARY EVIDENCES AND DATA PUT FORWARD BY THE APPELLANT DURING THE COURSE OF THE PROCEEDINGS BEFORE THEM, AND IN DOING SO, HAVE GROSSLY ERRED IN - 2.1. MAKING AN ADJUSTMENT OF RS. 1,63,25,48,736 / - TO THE ARM'S LENGTH PRICE (HEREINAFTER REFERRED AS 'ALP') OF THE INTERNATIONAL TRANSACTION RELATING TO MANAGEMENT SUPPORT SERVICES RECEIVED BY THE APPELLANT AND IN NOT ACCEPTING T HE ALP OF THE INTERNATIONAL TRANSACTION AS RECORDED IN THE BOOKS OF ACCOUNT OF THE APPELLANT; 2.2. CONCLUDING THE ALP FOR SERVICES PROVIDED BY THE ASSOCIATED ENTERPRISE ('AE') TO THE APPELLANT UNDER THE MANAGEMENT SUPPORT SERVICES AGREEMENT TO BE NIL; 2.3. CONCLUDING THAT THE SERVICES RECEIVED BY PIL FROM THE AE ARE IN THE NATURE OF STEWARDSHIP AND SHAREHOLDER SERVICES LEADING TO DIRECT BENEFIT TO THE AE AND NO PROXIMATE BENEFIT TO THE APPELLANT; 2.4 COMPLETELY DISREGARDING THE BENEFITS RECEIVED BY TH E APPELLANT ON RECEIPT OF SUCH MANAGEMENT SERVICES AND NOT APPRECIATING THAT SUCH SERVICES HAVE SIGNIFICANTLY ASSISTED THE APPELLANT IN ACHIEVING ITS DAILY OPERATIONAL EFFICACY; I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 4 OF 9 2.5. COMPLETELY IGNORING THE FACT THAT THE VOLUMINOUS TANGIBLE EVIDENCES FUR NISHED DURING THE ASSESSMENT PROCEEDINGS UNAMBIGUOUSLY DEMONSTRATE REGULAR FLOW OF SERVICES RECEIVED BY THE APPELLANT AND HOW SUCH SERVICES SIGNIFICANTLY HELPED PIL'S DAILY OPERATIONS; 2.6 NOT APPRECIATING THAT THE APPELLANT IS A PART MULTINATIONAL ENTER PRISE WHEREIN MANY PROCESSES ARE CENTRALIZED TO FACILITATE THE GROUP ENTITIES TO ATTAIN OPERATIONAL EFFICIENCY AND A COMPETITIVE EDGE IN THEIR RESPECTIVE COUNTRIES. SUCH ARRANGEMENT DOES NOT LEAD INTO ANY PROXIMATE BENEFIT TO THE AE RENDERING THE SERVICE B UT TO THE ENTITIES WHO ARE BENEFICIARY OF SUCH POOLED SERVICES; 2.7 NOT TAKING COGNIZANCE OF THE FACT THAT RATIONAL AND SCIENTIFIC ALLOCATION KEYS FOR THE PAYMENT OF MANAGEMENT SUPPORT SERVICE FEES WERE PROVIDED BY THE APPELLANT AND THAT THE APPELLANT HA S MAINTAINED PROPER DOCUMENTATION AND GLOBAL AUDITOR'S CERTIFICATE TO DEMONSTRATE THE BASIS OF THE CHARGE; AND 2.8 REJECTING TRANSACTIONAL NET MARGIN METHOD ('TNMM') AS THE MOST APPROPRIATE METHOD IN DETERMINING THE ARM'S LENGTH PRICE OF MANAGEMENT SUPPO RT SERVICES. 3. DETERMINATION OF ARM'S LENGTH PRICE BY THE AO, TPO AND THE DRP FOR IT SERVICES RECEIVED BY THE APPELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED A O , DRP AND TPO ERRED IN REJECTING THE TRANSFER PRICING ANALYSIS UNDERTAKEN BY THE APPELLANT WITH RESPECT TO THE IT SERVICES RECEIVED BY THE APPELLANT FROM AE WITHOUT APPRECIATING THE ARGUMENTS, DOCUMENTARY EVIDENCES AND DATA PUT FORWARD BY THE APPELLANT DURING THE COURSE OF THE PROCEEDINGS BEFORE THEM, AND IN DOING SO HAVE GROSS LY ERRED IN - 3.1 MAKING AN ADJUSTMENT OF RS. 38,83,00,734 / - TO THE ALP OF THE INTERNATIONAL TRANSACTION RELATING TO IT SERVICES RECEIVED BY THE APPELLANT AND IN NOT ACCEPTING THE ALP OF THE INTERNATIONAL TRANSACTION AS RECORDED IN THE BOOKS OF ACCOUNT O F THE APPELLANT; 3.2 CONCLUDING THAT THE IT SERVICES RECEIVED BY PIL FROM THE AE ARE IN THE NATURE OF STEWARDSHIP SERVICES LEADING TO DIRECT BENEFIT TO THE AE AND NO PROXIMATE BENEFIT TO THE APPELLANT; 3.3 CONCLUDING THE ARM'S LENGTH PRICE FOR IT SERVI CES PAID BY THE APPELLANT TO BE NIL; 3.4 COMPLETELY DISREGARDING THE BENEFITS RECEIVED BY THE APPELLANT ON RECEIPT OF SUCH IT SERVICES AND NOT APPRECIATING THAT SUCH IT SERVICES ARE PREREQUISITE FOR APPELLANT'S BUSINESS WHICH HAVE SIGNIFICANTLY ASSISTED APPELLANT IN ACHIEVING ITS DAILY OPERATING EFFICACY; I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 5 OF 9 3.5 COMPLETELY IGNORING THE FACT THAT THE TANGIBLE EVIDENCES FURNISHED DURING THE ASSESSMENT PROCEEDINGS WHICH UNAMBIGUOUSLY DEMONSTRATE THAT THE APPELLANT HAS SIGNIFICANTLY UTILIZED THOSE IT INFRASTRU CTURES AND SYSTEMS IN ITS DAILY OPERATIONS; AND 3.6 REJECTING TRANSACTIONAL NET MARGIN METHOD ('TNMM') AS THE MOST APPROPRIATE METHOD IN DETERMINING THE ARM'S LENGTH PRICE OF IT SERVICES. 4. RULE OF CONSISTENCY 4.1 THE LEARNED A O , DRP AND TPO ERRED I N DISALLOWING THE PAYMENTS MADE FOR MANAGEMENT SUPPORT SERVICES AND IT SERVICES BY THE APPELLANT IN THE YEAR UNDER APPEAL WITHOUT APPRECIATING THAT THE SAME HAVE BEEN ACCEPTED TO BE AT ARM'S LENGTH IN THE APPELLANT'S OWN CASE IN PRECEDING YEARS (I.E. FOR A LL THE ASSESSMENT YEARS PRECEDING TO AY 2009 - 10) BY THE A O AND THE TPO. 4.2 THE LEARNED TPO ERRED IN NOT APPLYING THE RULE OF CONSISTENCY TO TRANSFER PRICING PROCEEDINGS WHEN THE FACTS OF THE CASE INCLUDING THE UNDERLYING ARGUMENTS HAVE NOT ALTERED. 5. DETERMINATION OF ARM'S LENGTH PRICE FOR SOFTWARE SEGMENT 5.1. THE LEARNED A O , TPO AND DRP ERRED IN MAKING AN ADJUSTMENT TO THE ALP OF INTERNATIONAL TRANSACTIONS RELATING TO SOFTWARE DEVELOPMENT SERVICES RENDERED BY THE APPELLANT AND IN NOT ACCEPTING THE ALP OF THE INTERNATIONAL TRANSACTION AS RECORDED IN THE BOOKS OF ACCOUNT BY THE APPELLANT. 5.2. WITHOUT PREJUDICE TO THE GENERALITY OF THE ABOVE, THE LEARNED A O AND THE DRP ERRED IN MAKING A TRANSFER PRICING ADJUSTMENT OF RS 26,91,61,920 / - ON THE BASIS THAT THE APPELLANT SHOULD HAVE MADE OPERATING MARGIN / TOTAL COST MARGIN OF 25.92 % WITH RESPECT TO ITS SOFTWARE DEVELOPMENT SERVICES. 5.3. THE LEARNED AO AND DRP ERRED IN SELECTING ONLY ONE COMPARABLE COMPANY AND IN THE PROCESS ENHANCING THE ADJUSTMENT MAD E BY TPO AND NOT APPRECIATING THAT ONE COMPARABLE CANNOT BE CONSIDERED FOR DETERMINATION OF ARM'S LENGTH PRICE. 5.4. THE LEARNED AO, DRP AND THE TPO ERRED ON FACTS AND IN LAW IN SELECTING ONE COMPARABLE AS IT WILL COMPLETELY SKEW THE ARM'S LENGTH PRICE A ND WILL NOT BE REPRESENTATIVE OF AN APPROPRIATE MARKET RETURN. A SINGLE COMPARABLE COMPANY CANNOT BE CONSIDERED FOR COMPARABILITY ANALYSIS UNDER TRANSACTIONAL NET MARGIN METHOD. I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 6 OF 9 5.5. EVEN FOR THE ACCEPTED COMPARABLE, THE LEARNED AO, DRP AND THE TPO ERRED IN COMPUTING THE OPERATING PROFIT / TOTAL COST MARGIN. 5.6. THE LEARNED AO, DRP AND THE TPO ERRED ON FACTS AND IN LAW IN REJECTING TRANSFER PRICING STUDY CONDUCTED BY THE APPELLANT AND THE COMPARABLES SELECTED BY THE APPELLANT. 5.7. THE LEARNED AO, DRP AND THE TPO ERRED ON FACTS AND IN LAW IN REJECTING CERTAIN COMPARABLE COMPANIES PROVIDED IN THE TP DOCUMENTATION WITHOUT PROVIDING ANY COGENT REASONS AND BASED ON APPLICATION OF ARBITRARY FILTERS. 5.8. THE LEARNED AO AND DRP ERRED IN NOT ALLOWING THE WO RKING CAPITAL AND RISK ADJUSTMENT BASED ON ACTUAL WORKINGS OF THE COMPARABLES. THE LEARNED DRP HAS IN PRINCIPLE AGREED WITH THE WORKING CAPITAL AND RISK ADJUSTMENT; HOWEVER, THE LEARNED DRP ERRED IN NOT APPRECIATING THAT ADHOC ADJUSTMENTS ARE ARBITRARY AND CANNOT BE REPRESENTATIVE OF THE ACTUAL RISK DIFFERENTIAL. USE OF CONTEMPORANEOUS DATA AND DISREGARD OF RULE 10 B(4) OF THE RULES 5.9. THE LEARNED AO, DRP AND THE TPO ERRED IN FACTS AND IN LAW IN USING DATA, WHICH WAS NOT CONTEMPORANEOUS AND WHICH WAS N OT AVAILABLE IN THE PUBLIC DOMAIN AT THE TIME OF CONDUCTING THE TRANSFER PRICING STUDY BY THE APPELLANT. 5.10. THE LEARNED AO, DRP AND THE TPO ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE APPLICATION OF MULTIPLE - YEAR DATA WHILE COMPUTING THE MARGINS OF THE COMPARABLE COMPANIES, HAVING REGARD TO THE PROVISIONS OF RULE 10B(4) OF THE RULES. 6. VARIATION OF 5% FROM THE ARITHMETIC MEAN 6.1. THE APPELLANT RESERVES THE RIGHT FOR GRANTING THE BENEFITS OF THE PROVISO TO SECTION 92C(2) OF THE ACT. 7. LEAS E RENTAL 7.1. THE LEARNED AO AND DRP ERRED IN LAW AND ON FACTS IN DISALLOWING RS.5,87,30,492 / - BEING THE LEASE RENT PAID IN RESPECT OF CARS TREATING THE SAME AS CAPITAL EXPENDITURE. 7.2. THE LEARNED AO AND DRP ERRED IN LAW AND ON FACTS IN DISALLOWING T HE LEASE RENT PAID WITHOUT TAKING COGNIZANCE OF THE DECISION OF THE SUPREME COURT IN THE CASE OF ICDS LTD. VS. CIT (2013) 350 ITR 527 (SC). I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 7 OF 9 7.3. STRICTLY WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AO AND DRP ERRED IN LAW AND ON FACTS IN NOT ALLOWING DEP RECIATION ON TOTAL PAYMENT TOWARDS LEASE TRANSACTIONS INCLUDING INTEREST. 8. SHORT CREDIT OF TAX DEDUCTED AT SOURCE 8.1. THE LEARNED AO ERRED IN GRANTING CREDIT OF TAX DEDUCTED AT SOURCE OF RS. 4,69,46,722 / - INSTEAD OF RS. 5,27,25,150 / - , THEREBY RESULT ING IN SHORT GRANT OF CREDIT OF RS. 57,78,428 / - . 9. INTEREST UNDER SECTION 234A 9.1. THE LEARNED AO ERRED IN LEVYING INTEREST OF RS.1,35,582 / - UNDER SECTION 234A OF THE ACT. 10. INTEREST UNDER SECTION 234D 10.1 THE LEARNED AO ERRED IN LEVYING INTER EST OF RS.2,05,83,810 / - UNDER SECTION 234D OF THE ACT. THE APPELLANT SUBMITS THAT THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER . 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE REFERRED TO 3.2.3 OF LD. DISPUTE RESOLUTION PANEL S DIRECTION DATED 23.12.2013 AND POINTED OUT THAT LD. DRP HAS FOLLOWED THE FINDINGS GIVEN BY THE LD. DRP IN THE ASSESSEE S CASE FOR THE ASSESSMENT YEAR 2009 - 10, WHICH READS AS UNDER: - THIS PANEL HAS ALSO HEARD THE SUBMISSIONS MADE BY THE ELIGIBLE ASSESSEE. THE VARIOUS DOCUMENTS FILED BY THE ASSESSEE HAVE ALSO BEEN CAREFULLY PERUSED. WE HAVE ALSO GONE THROUGH THE DETAILED FINDINGS OF THE TPO MADE IN THE ORDER. THE TPO HAS RIGHTLY REMARKED THAT THE SERVICES PERFORMED BY KPENV (DIRECTLY OR THROUGH OTHER AES) FA LL INTO THE CATEGORY OF STEWARDSHIP ACTIVITY AS DEFINED BY THE HON BLE SC. FOR THE DETAILED FINDINGS ARRIVED AT BY THE TPO IN HIS ORDER, THIS PANEL IS OF THE VIEW THAT THERE IS NO INTERFERENCE CALLED FOR AS THE ORDER HAS BEEN VALIDLY MADE BY THE TPO BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS REJECTED . I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 8 OF 9 4.1. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN ASSESSMENT YEAR 2009 - 10, THE TRIBUNAL HAS RESTORED THE MATTER TO THE FILE OF LD. DRP FOR RE - ADJUDICATION AND FOR PASSING A SPEAKING ORDER OBSERVING AS UNDER: - AFTER CONSIDERING THESE SUBMISSIONS OF THE LD. A.R. AND A PERUSAL OF THE D.R.P. S ORDER MORE SPECIFICALLY PARAS 9, PARA 31, PARA 34, PARA 48 AND PARA 51 OF THE ORDER OF THE DRP, IT IS NOTICED THAT THE ORDER OF THE DRP IS NOT A SPEAKING ORDER IN SO FAR AS NO REASON HAS BEEN GIVEN BY DRP FOR REJECTING THE CLAIMS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ISSUES IN THIS APPEAL BE RESTORED TO THE FILE OF THE DRP FOR RE - ADJUDICATIO N AND FOR PASSING A SPEAKING ORDER AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO BE HEARD AND WE DO SO . LD. COUNSEL THEREFORE, SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE LD. DRP. 5. LD. D.R. FOR THE R EVENUE, ON THE OTHER HAND, FAIR LY CONCEDED THAT SINCE THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF LD. DRP FOR ASSESSMENT YEAR 2009 - 10, IN ALL FAIRNESS THIS MATTER SHOULD ALSO BE RESTORED BACK TO THE FILE OF LD. DRP FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 6 . WE HAVE CONSIDER ED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. BOTH THE PARTIES AGREED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF LD. DRP FOR FRESH ADJUDICATION. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE P ARTIES, RESTORE THE MATTER BACK TO THE FILE OF LD. DRP FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST , 201 5 . SD/ - SD/ - MAHAVIR SINGH S.V. MEHROTRA ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 10 TH D AY OF AUGUST , 201 5 I.T.A. NO . 472 / KOL ./20 1 5 ASSESSMENT YEAR: 20 10 - 20 11 PAGE 9 OF 9 COPIES TO : (1) M/S. PHILIPS INDIA LIMITED, 7, JUSTICE CHANDRA MADHAB ROAD, KOLKATA - 700 020 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 11(2), KOLKATA, AAYAKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 (3) COMMISSIONER OF INCOME - TAX (APPEALS) - I , KOLKATA (4) COMMISSIONER OF INCOME TAX - , KOLKATA ( 5 ) THE DEPARTMENTAL R EPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .