M/s Sinosteel India Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5027/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0564 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K CHAND DIR
• Assessee Lawyers: ASEEM CHAWLA
• Keywords: Transfer pricing; Additional evidence

Judgement Text

I.T.A. NO.5027 /DEL/2010 1/3 IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH G NEW DELHI, BENCH G NEW DELHI, BENCH G NEW DELHI, BENCH G BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUTANT MEMBER ITA NO. 5027 /DEL/2010 (ASSESSMENT YEAR 2006-07) M/S. SINOSTEEL INDIA PVT. LTD., VS. DCIT, CIRCLE 8 (1), 12 TH FLOOR, EROS CORPORATE TOWER, NEW DELHI. NEHRU PLACE, NEW DELHI-19 (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAJCS1181N APPELLANT BY: SHRI ASEEM CHAWLA, ADV. & SHRI GAGAN KUMAR, ADV. RESPONDENT BY: SHRI R.K.GUPTA, CIT DR & SHRI N K CHAND, DIR ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED U/S 143(3)/144C OF THE ACT. THE GROUNDS RAI SED BY THE ASSESSEE ARE REPRODUCED AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. / LD. TRANSFER PRICING OFFICER (L D. TPO), HAS ERRED IN DETERMINING THE ARMS LENGTH PRICE AT ` 4,4 5,84,781/- INSTEAD OF ` 1,58,12,470/-, RESULTING IN AN ADDITIO N OF ` 2,87,72,311/-. 1.1 THAT THE LD. A.O. / LD. TPO HAS GROSSLY ERRED I N NOT APPLYING THE FUNCTIONS PERFORMED, RISKS ASSUMED AND ASSETS EMPLOYED (FAR ANALYSIS) WHILE COMPARING THE TRANSACTION OF COMMISSION EARNED FOR SUPPLY OF 18,44,150 WET METRIC TONNE (SHIPPED IN 44 SEPARATE SHIPMENTS DURING THE YEAR) WITH A TRANSACTION OF COMMISSION CHARGED TO AN UNRELATED PARTY FOR SUPPLY OF 40,418 DRY METRIC TONE (SHIPPED IN ONE SINGLE SHIPM ENT) THEREBY MAKING AN ADJUSTMENT OF ` 2,85,48,364/-. 1.2 THAT THE LD. A.O./LD. TPO HAS GROSSLY ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WHILE MAKI NG ADJUSTMENT OF ` 2,23,947/- BY COMPARING THE COMMISSION CHARGED FOR SUPPLY OF IRON ORE WITH THE COMMISSION CHARGED FOR PURCHASE OF LAM COKE. 1.2.1 THAT THE LD. A.O./LD. TPO HAS GROSSLY ERRED I N COMPARING THE RATE CHARGED FOR DRY METRIC TONNE AS AGAINST TH E WET METRIC TONNE IGNORING THE ETYMOLOGICAL DIFFERENCE BETWEEN THE TWO TERMS. I.T.A. NO.5027 /DEL/2010 2/3 2. THAT THE LD. A.O. /LD. TPO HAS ERRED ON THE FACT S AND CIRCUMSTANCES OF THE CASE AND IN LAW IN REJECTING T HE TRANSFER PRICING STUDY AND OTHER DOCUMENTATION PRESCRIBED UN DER RULE 10D OF THE INCOME TAX RULES, 1962 WITHOUT ASSIGNING ANY COGENT REASON THEREBY CONTRAVENING PROVISIONS OF SE CTION 92C(3) OF THE ACT. 3. THAT THE LD. A.O./LD TPO HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY FAILING TO TAKE COGNIZANCE OF THE ADDITIONAL EVIDENCES FURNISHED BY THE APPLICANT BEFORE THE DISPUTE RESOLUTION PANEL (DRP) . 3.1 THAT THE DRP HAS ERRED ON THE FACTS AND CIRCUMS TANCES OF THE CASE AND IN LAW BY FAILING TO TAKE COGNIZANC E OF THE ADDITIONAL EVIDENCES FURNISHED BY THE APPLICANT BEFORE THE HONBLE DRP. 4. THAT THE ORDERS PASSED BY THE LD A.O./LD/ TPO PU RSUANT TO THE DIRECTIONS ISSUED BY THE DRP ARE NOT SPEAKIN G IN NATURE. 5. THAT THE LD. A.O. HAS GROSSLY ERRED IN INITIATIN G PENALTY PROCEEDINGS U/S 271(1) OF THE ACT READ WITH EXPLAN ATION 7. 6. THAT THE ORDER(S) PADDED BY THE LD. A.O./TPO ARE BAD IN LAW AND VOID AB INITIO. ALL OF THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJ UDICE AND NOTWITHSTANDING EACH OTHER. 2. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE FILED ADDITIONAL EVIDENCE BEFORE THE DRP, WHICH HAS NOT BEEN CONSIDERED BY THEM WHILE CONFIRMING THE ORDER PASSED BY THE A.O./TPO. THE ADDITIONAL EVIDENCE FLED BEFORE DRP IS PLACED AT PAGE 246-247 OF THE PAPER BOOK FILED BY THE ASSESSEE. 3. WE HAVE HEARD BOTH THE PARTIES AND HAVE CONSIDER ED THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSE E. THE ASSESSEE HAD FILED ADDITIONAL EVIDENCE BEFORE DRP, WHICH HAS NOT BEEN CONSIDERED IN THE ORDER PASSED BY THEM ON 30.0 8.2010. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT TH E MATTER SHOULD BE RESTORED BACK TO DRP FOR CONSIDERATION OF ADDITI ONAL EVIDENCE FILED BY THEM AND DECIDE THE ISSUE AFRESH AFTER CON SIDERING THE ADDITIONAL EVIDENCE. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. 5. PRONOUNCED IN THE OPEN COURT ON 13 TH JAN., 2011. SD./- SD./- (A. D. JAIN) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:13 TH JAN., 2011 SP. I.T.A. NO.5027 /DEL/2010 3/3 COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI