Emerson Process Management Power & Water Solutions India Pvt. Ltd., Noida V. ITO, New Delhi

ITA 5678/DEL/2013

• Counselvise Citation: 567820114 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 22-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: SARABJOT WALIA
• Keywords: Transfer pricing
• Section: 143(3); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI H.S. SIDHU : JUDICIAL MEMBER ITA NO. 5677 & 5678/DEL/2013 A.Y. 2002-03 & 2003-04 EMERSON PROCESS MANAGEMENT VS. INCOME-TAX OFFICER , POWER & WATER SOLUTIONS INDIA WARD 18(3), NEW DEL HI. PVT. LTD. (FORMERLY KNOWN AS WESTING HOUSE ELECTRIC PVT. LTD.) PAN: AAACW 2693 N ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SARABJOT WALIA ADV. RESPONDENT BY : SMT. PARWINDER KAUR SR. DR DATE OF HEARING : 12-06-2015 DATE OF ORDER : 16-06-2015. O R D E R PER S.V. MEHROTRA, A.M:- THESE APPEALS, BY THE ASSESSEE, ARE DIRECTED AGAINS T SEPARATE ORDERS PASSED BY THE LD. CIT(A)-XXIII, NEW DELHI, ASSAILIN G THE ACTION OF LD. CIT(A) IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961, RELATING TO A.Y. 2002-03 & 2003-04. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO.5677 & 5678/DEL/2013 2. BRIEF FACTS OF THE CASE FOR AY2002-03 ARE THAT A SSESSMENT WAS COMPLETED U/S 143(3) AT AN INCOME OF RS. 32,14,630/ - A AGAINST THE RETURNED INCOME OF RS. 1,64,160/-. THE ASSESSEE COMPANY FILE D APPEAL BEFORE THE LD. CIT(A), WHO DISPOSED OF THE APPEAL AS UNDER: ADDITION OF RS. OF RS. 574398/- ON ACCOUNT OF CO NFIRMED ADJUSTMENT BY INCREASE IN ARMS LENGTH PRICE AS PER ORDER OF TPO U/S 92 CA OF IT ACT. TREATING EXPENDITURE ON ACQUISITION OF SOFTWARE OF CONFIRMED RS. 1940409/- AS CAPITAL INSTEAD OF REVENUE CLAIME D BY THE ASSESSEE. ADDITION OF RS. 1699910/- TREATING AMOUNT ONLY A SUM OF RS. SPENT ON CAPITAL WORK IN PROGRESS AS CAPITAL NATURE 297440/- CONFIRMED. FOR REST RELIEF ALLOWED ADDITION CONFIRMED. 2.1. AFTER CONSIDERING THE ASSESSEES SUBMISSION TH E AO IMPOSED A PENALTY OF RS. 4,82,150/-. 2.2. LD. CIT(A) CONFIRMED THE PENALTY IMPOSED BY AO . BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US, ASSAILING THE ACTION OF LD. CIT(A) CONFIRMING THE PENALTY ON VARIOUS GROUNDS OF APPEAL . 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT IN QUANTUM APPEAL THE TRIBUNAL VIDE ITS ORDER DATED 26-3-2015 IN ITA NO. 3264/DEL/2010 HAS SET ASIDE THE ORDER OF LD. CIT(A), CONFIRMING T HE ADDITIONS I.E. THE VERY BASE FOR LEVY OF IMPUGNED PENALTY AND HAS RESTORED THE MATTER TO HIS FILE FOR DE NOVO CONSIDERATION. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. SINCE IN QUANTUM APPEAL THE AD DITION I.E. THE VERY BASE FOR LEVY OF IMPUGNED PENALTY HAS BEEN SET ASIDE AND THE MATTER HAS BEEN RESTORED TO THE FILE OF CIT(A), WE SET ASIDE THE OR DER OF LD. CIT(A) AND 3 ITA NO.5677 & 5678/DEL/2013 RESTORE THE MATTER BACK TO HIS FILE FOR DECIDING T HE ISSUE RELATING TO PENALTY AFTER DECIDING THE QUANTUM APPEAL. 5. IN A.Y. 2003-04, THE AO LEVIED PENALTY OF RS. 2 ,31,264/- U/S 271 (1)(C) OF THE ACT ON ACCOUNT OF ADDITION OF RS. 6,2 9,291/- TO THE RETURNED INCOME ON ACCOUNT OF ALP ADJUSTMENT AS PER ORDER O F TPO U/S 92 CA OF THE I.T. ACT. LD. CIT(A) CONFIRMED THE PENALTY LEVIED B Y THE AO. 6. WE FIND THAT IN QUANTUM APPEAL THE TRIBUNAL VIDE ITS ORDER DATED 26-3- 2015 IN ITA NO. 3265/DEL/2010 HAS SET ASIDE THE OR DER OF LD. CIT(A), CONFIRMING THE ADDITION MADE ON ACCOUNT OF ALP ADJU STMENT I.E. THE VERY BASE FOR LEVY OF IMPUGNED PENALTY AND HAS RESTORED THE MATTER BACK TO HIS FILE FOR DE NOVO CONSIDERATION. THEREFORE, HEREIN A LSO WE SET ASIDE THE ORDER OF LD. CIT(A), CONFIRMING THE PENALTY IN QUESTION AND RESTORE THE MATTER BACK TO HIS FILE FOR DECIDING THE ISSUE RELATING TO PENALTY U/S 271(1)(C) AFTER DECIDING THE QUANTUM APPEAL. 7. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 16-06-2015. SD/- SD/- (H.S. SIDHU) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16-06-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR