PFIZER PRODUCTS INDIA P.LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 5843/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8329 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: KIRIT KUMAR; JIGAR HARIA
• Keywords: Additional evidence
• Section: 194C

Judgement Text

ITA NO.5843 OF 2011 PFIZER PRODUCTS INDIA PVT LTD M UMBAI PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.5843/MUM/2011 (ASSESSMENT YEAR: 2006-07) PFIZER PRODUCTS INDIA PVT. LTD., 5 PATEL ESTATE, OFF. SV ROAD, JOGESHWARI (W) MUMBAI 400012 PAN: AADCP 8985 B VS. DCIT 8(2), AAYAKAR BHAVAN, MK ROAD, MUMBAI 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI KIRIT KUMAR & JIGAR HARIA DEPARTMENT BY: SHRI A.C. TEJPAL, CIT(DR) DATE OF HEARING: 01/10/2012 DATE OF PRONOUNCEMENT: 31/10/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDERS OF THE CIT (A)-17 MUMBAI DATED 10.6.2011 FOR WHICH THE ASSESS EE RAISED THE FOLLOWING FIVE GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF AO IN TAXING AN AMOUNT OF ` .3,94,000/- IN RESPECT OF STOCK WRITTEN BACK; 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF AO IN TAXING AN AMOUNT OF ` .9,00,000/- IN RESPECT OF PROVISION FOR ADVANCES TO EMPLOYEES WRITTEN BACK AMOUNTING TO; 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF AO IN TAXING AN AMOUNT OF ` .42,15,352/- IN RESEPCT OF VACATION PAY LIABILITY TRANSFERRED TO PFIZER LIMITED; ITA NO.5843 OF 2011 PFIZER PRODUCTS INDIA PVT LTD M UMBAI PAGE 2 OF 4 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF AO IN TAXING AN AMOUNT OF ` .4,63,86,000/- IN RESPECT OF PROVISION FOR REVENUE DEPOSITS WRITTEN BACK; 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE UNDER SECTION 40(A)(IA) IN RESPECT OF CROSS CHARGES PAID TO PFIZER LIMITED AMO UNTING TO ` 15,37,60,992/- IGNORING THAT THE SAID PAYMENTS WERE TOWARDS REIMBURSEMENTS OF COSTS INCURRED BY PFIZER LIMITED. 2. BRIEFLY STATED, ASSESSEE WROTE BACK THE FOLLOWING F OUR ITEMS IN THE PROFIT & LOSS A/C AND EXCLUDED THEM IN THE COMP UTATION OF INCOME: 1. STOCK WRITTEN BACK - ` . 3,94,000 2. PROVISION FOR ADVANCES TO - ` . 9,00,000 EMPLOYEES WRITTEN BACK 3. VACATION PAY LIABILITY TRANSFERRED - ` . 42,15,352 TO PFIZER LTD 4. PROVISION FOR REVENUE DEPOSITS - ` 4,63,86,000 WRITTEN BACK. ---------------- TOTAL = - ` `` ` . 5,18,95,352 AO DID NOT ALLOW THE EXCLUSION ON THE REASON THAT A SSESSEE DID NOT FURNISH ANY EVIDENCE THAT THESE AMOUNTS WERE ALREAD Y DISALLOWED IN EARLIER YEARS. BEFORE THE CIT (A) ALSO ASSESSEE COU LD NOT FURNISH ANY EVIDENCE THE SAME WAS CONFIRMED. THESE FOUR AMOUNTS ARE COVERED BY GROUND NOS.1 TO 4. GROUND NO.5 IS ON THE ISSUE O N THE AMOUNT PAID TO PFIZER LTD., ASSESSEES SISTER CONCERN AS C ROSS CHARGES. AO WAS OF THE OPINION THAT THE AMOUNT IS COVERED BY TH E PROVISIONS OF SECTION 194C AND SINCE THE TDS WAS NOT DEDUCTED THE DISALLOWANCE UNDER SECTION 40(A)(IA) IS WARRANTED. THE CIT (A) ALSO IN THE ABSENCE OF ANY AGREEMENT OR VOUCHERS AGREED WITH TH E OPINION OF AO. ASSESSEE BEFORE US FILED ADDITIONAL EVIDENCE IN THE PAPER BOOK VOL.II RUNNING PAGES 40 TO 78 AND PRAYED FOR ADMISS ION OF THE SAME. THESE ARE AS UNDER: ITA NO.5843 OF 2011 PFIZER PRODUCTS INDIA PVT LTD M UMBAI PAGE 3 OF 4 S.NO PARTICULARS PAGE NOS. 1 STATEMENT OF REVISED COMPUTATION OF TOTAL INCOME FOR THE YEAR ENDED 31 ST MARCH, 2005 42-45 2 COPY OF ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH, 2005 46-68 3 COPY OF CROSS CHARGE AGREEMENT BETWEEN PFIZER PRODUCTS INDIA PRIVATE LIMITED AND PFIZER LIMITED 69-76 4 DETAILS OF CROSS CHARGES 77 5 DEBIT NOTE FOR CROSS CHARGES ISSUED BY PFIZER LTD 78 3. IT WAS SUBMITTED THAT AT THE TIME OF ASSESSMENT AS WELL AS IN THE APPELLATE PROCEEDINGS, THAT ASSESSEE COULD NOT SUBMIT ALL THE RELEVANT DOCUMENTS IN SUPPORT OF THE CLAIMS MADE IN THE RETURN OF INCOME AS SOME OF THE DOCUMENTS WERE DESTROYED IN T HE FLOODS IN JULY, 2005 AND FURTHER MOST OF THE STAFF WHO WERE H ANDLING THE MATTERS HAD RESIGNED. ASSESSEE HAS BEEN MAKING REGU LAR EFFORTS TO RECOVER AND WAS NOW ABLE TO RETRIEVE SOME OF THE DE TAILS FROM THE TAX CONSULTANT IN GOREGAON WHERE THE RETURNS OF INC OME OF EARLIER YEARS WERE FILED. 4. CONSIDERING THE PRAYER AND THE ARGUMENTS OF THE RIV AL PARTIES, WE ARE OF THE OPINION THAT THESE ADDITIONAL EVIDENC ES WILL GO TO THE ROOT OF THE MATTER AND ARE REQUIRED TO BE EXAMINED BY AO. IN VIEW OF THIS, WITHOUT GOING INTO THE MERITS OF THE VARIOUS ADDITIONS MADE, WE RESTORE THE ISSUE TO THE FILE OF AO TO EXAMINE THE ADDITIONAL EVIDENCE NOW FURNISHED BY ASSESSEE AS WELL AS ANY OTHER DETA ILS REQUIRED FOR EXAMINING THE CLAIMS MADE BY ASSESSEE. FOR THIS LIM ITED PURPOSE FOR EXAMINING THE DETAILS AND THE CLAIMS ON THE ABOVE F IVE ISSUES CONTESTED IN THE GROUNDS, THE MATTER IS RESTORED TO THE FILE OF AO FOR FRESH ADJUDICATION. NEEDLESS TO SAY THAT ASSESSEE S HOULD BE GIVEN REASONABLE AND ADEQUATE OPPORTUNITY BY THE AO. ACCO RDINGLY, GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURP OSES. ITA NO.5843 OF 2011 PFIZER PRODUCTS INDIA PVT LTD M UMBAI PAGE 4 OF 4 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS CONSIDER ED ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2012. SD/- SD/- (D.K. AGARWAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 31 ST OCTOBER, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI