Silver Oak Laboratories Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 6197/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4966 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I1
• Next Hearing Date: 15-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRENDER KUMAR
• Keywords: Depreciation; Transfer pricing; Opportunity of being heard; Principle of natural justice; International transaction; Initiation of penalty proceedings
• Section: 143(3); 234B; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I - 1 , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. K. N. CHARY , JM ITA NO. 6197 /DEL/201 2 : ASSTT. YEAR : 2008 - 09 SILVER OAK LABORATORIES PVT. LTD., (MERGED WITH ORIFLAME INDIA PVT. LTD. WITH EFFECT F ROM 1 APRIL 2011), L29 TO L34, RADIAL 6, OUTER CIRCLE, CONNAUGHT PLACE, NEW DELHI - 110001 VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 8(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A BCS1579G ASSESSEE BY : SH. K. M. GUPTA, ADV. REVENUE BY : SH. AMRENDER KUMAR, CIT DR DATE OF HEARING : 21 .08 .201 7 DATE OF PRONOUNCEMENT : 28 . 0 8 .201 7 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 15.10.2012 OF THE AO PASSED U/S 144C R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2 . FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE LEARNED DISPUTE RESOLUTION PANEL ('LD. DRP') ERRED IN PASSING DIRECTIONS UNDER SECTION 144(C) OF THE INCOME TAX ACT, 1961 ('THE ACT') PROPOSING AN ADDITION OF INR 68,70,256 ON ACCOUNT OF TRANSFER PRICING MATTERS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ('LD. AO') ERRED IN ASSESSING THE INCOME OF THE APPELLANT AT INR 7 ,42,71,293 AS AGAINST THE RETURNED INCOME OF INR 6,54,78,631. ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. DRP GROSSLY ERRED IN ALLOCATING EXPENSES UNDER THE HEAD 'MANUFACTURING AND OTHER EXPENSES' IN THE PROFIT AND LOSS A CCOUNT OF THE AUDITED FINANCIAL STATEMENTS TO THE 'TRADING SEGMENT' OF THE APPELLANT AND THUS MAKING AN ADDITION ON ACCOUNT OF DIFFERENCE IN THE IMPUGNED TRANSFER PRICE AND THE ARM'S LENGTH PRICE. 2.1 WITHOUT PREJUDICE, THAT ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE LD. DRP GROSSLY ERRED IN (A) NOT ALLOCATING OPERATING INCOME ITEMS; AND (B) ALLOCATING NON - OPERATING EXPENSES TO THE TRADING SEGMENT IN MAKING THE IMPUGNED ADDITION TO THE INCOME. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. DRP ERRED IN REDRAWING THE SEGMENTAL ACCOUNTS WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE APPELLANT TO REFUTE THE SAME, THUS VIOLATING THE PRINCIPLE OF NATURAL JUSTICE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE AND IN LAW, THE LD, DRP GROSSLY ERRED IN DISREGARDING MULTIPLE YEAR / PRIOR YEARS' DATA USED BY THE APPELLANT IN THE TRANSFER PRICING ('TP') DOCUMENTATION AND USING CURRENT YEAR (I.E. FINANCIAL YEAR ('FY') 2007 - 08) DATA FOR COMPARABLE COMPAN IES DESPITE THE FACT THAT THE SAME WAS NOT NECESSARILY AVAILABLE TO THE APPELLANT AT THE TIME OF PREPARING ITS TP DOCUMENTATION. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO ERRED IN LEVYING INTEREST UNDER SECTIONS 234B AND 234C OF THE ACT. ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 3 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THAT THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO EA CH OTHER. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3 . GROUND NOS. 2 & 2.1 RELATES TO THE ALLOCATION OF EXPENSES UNDER THE HEAD MANUFACTURING AND OTHER EXPENSES IN THE PROFIT AND LOSS ACCOUNT TO THE TRADING SEGMENT AND THE ADDITION ON ACCOUNT OF DIFFERENCE IN THE ARM S LENGTH PRICE. AT THE FIRST INSTANCE, THESE GROUNDS WERE ARGUED. 4 . THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE HAD ADOPTED TNMM WITH OP/TC AS THE NET P ROFIT I NDICATOR FOR THE PU RPOSE OF BENCHMARKIN G THE INTERNATIONAL TRANSACTION RELATING TO THE TRADING SEGMENT IN THE TRANSFER P RICING STUDY. THE AO REFERRED THE MATTER TO THE TPO WHO RECOMPUTED THE MARGIN OF COMPARAB LE COMPANIES BY ONLY CONSIDERING THE DIRECT COST OF PRODUCTION AND PASSED THE ORDER U/S 92CA(3) OF THE ACT WHEREIN AN ADJUSTMENT OF RS.2,14,16,351/ - HAS BEEN MADE BY OBSERVING AS UNDER: THE ARM S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION RELATED TO TH E EXPORT OF TRADED GOODS IS DETERMINED AT RS.101,289,260/ - AS AGAINST RS.79,872,909/ - DETERMINED BY THE ASSESSEE. THE ASSESSING OFFICER SHALL ENHANCE THE INCOME OF THE ASSESSEE BY RS.21,416,351/ - . ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 4 5 . THEREAFTER, THE AO PASSED THE DRAFT ASSESSMENT ORDER D ATED 13.12.2011 U/S 144C OF THE ACT AND PROPOS ED THE ADDITION OF RS.2 ,14,16,351/ - . 6 . AGAINST THE SAID DRAFT ASSESSMENT ORDER, THE ASSESSEE RAISED OBJECTION S BEFORE THE LD. DRP AND SUBMITTED THAT THE TPO HAD ERRED IN COMPARING THE GROSS MARGIN OF THE COM PARABLES WITH THAT OF THE ASSESSEE WHILE USING TNMM AND VIOLATED THE BASIC PRINCIPLES OF TRANSFER PRICING AS PER THE INTERNATIONAL GUIDELINES ON THE SUBJECT COUPLED WITH THE INDIAN TP REGULATIONS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT ALLOCATE ANY INDIRECT EXPENSES TO THE TRADING SEGMENT FOR THE REASONS THAT THE FUNCTIONS PERFORMED IN RELATION TO THE TRADING OF GOODS WERE MINIMAL AND ANY ALLOCATION OF INDIRECT EXPENSES WOULD NOT HAVE ANY SIGNIFICANT IMPACT ON THE NET MARGIN AND THAT THE SAME AP PROACH WAS NOT QUESTIONED IN ANY OF THE PREVIOUS YEARS BY THE TPO. 7. THE LD. DRP AFTER CONSIDERING THE OBJECTION S AND THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE RULE 10B OF THE INCOME - TAX RULES, 1962 PROVIDES THAT, UNDER THE TNMM, THE NET OPERATIN G PROFIT MARGIN REALIZED BY THE ENTERPRISE IS COMPARED TO THAT EARNED BY AN UNRELATED ENTERPRISE FROM A COMPARABLE UNCONTROLLED TRANSA C TION TO ARRIVE AT ARM S LENGTH PRICE , IN RELATION TO THE INTERNATIONAL TRANSACTION AND THAT THE NET MARGINS WERE MORE TOL ERANT TO SOME OF THE FUNCTIONAL DIFFERENCES BETWEEN CONTROLLED AND UNCONTROLLED TRANSACTIONS THAN GROSS MARGINS ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 5 (I.E. USED IN THE RPM AND CPM). IT WAS FURTHER OBSERVED THAT USUALLY IT IS DIFFICULT TO FIND COMPARABLES HAVING SIMILAR FUNCTIONAL PROFILE. THER EFORE, KEEPING IN MIND THE FLEXIBILITY OF TNMM TOWARDS FUNCTIONAL DIFFERENCES, IT IS USED MOST OFTEN AND THAT THE ASSESSEE S ENTIRE SALES WERE MADE TO THE RELATED PARTIES IN BULK AND THE ASSESSEE WAS NOT REQUIRED TO SPEND MUCH EFFORT ON MARKETING, BUT THE COMPARABLES SELECTED BY THE TPO WERE REQUIRED TO SPEND SUBSTANTIAL EFFORT ON MARKETING BECAUSE THEY THEMSELVES WERE SELLING THE PRODUCTS IN THE MARKET. THEREFORE, IN VIEW OF THE AFORESAID FUNCTIONAL DIFFERENCES, THE LD. DRP WAS OF THE VIEW THAT THE TNMM WA S THE MOST APPROPRIATE METHOD FOR BENCHMARKING THE INTERNATIONAL TRANSACTION AND THE TPO HAD ERRED IN USING THE GROSS MARGIN AS THE PLI TO DETERMINE THE ALP OF THE INTERNATIONAL TRANSACTION AS TNMM DOES NOT ALLOW BENCHMARKING AT GROSS LEVEL. THE LD. DRP DI RECTED THE AO TO MAKE AN ADJUSTMENT OF RS.68,70,256/ - BY OBSERVING IN PARAS 6.3 TO 6.5 OF THE IMPUGNED ORDER AS UNDER: 6.3 H OWEVER, TO COMPARE THESE COMPANIES AT THE NET LEVEL , PROPER SEGMENTAL ACCOUNT FOR TR ADING SEGMENT SHOULD BE AVAILABLE. AS DISCUSSED ABOVE, THE ASSESSEE HAS NOT ALLOCATED ANY INDIRECT EXPENSES TO TRADING ACTIVITIES SEGMENT. THE DRP DOES NOT AGREE WITH THE ASSESSEE THAT NO INDIRECT EXPENSES HAVE BEEN INCURRED ON THE TRADING SEGMENT. THERE AR E VARIOUS INDIRECT EXPENSES IN T HE P&L ACCOUNT THAT WOULD HAVE BEEN INCURRED ON TH E TRADING ACTIVITIES, FOR EXAMPLE, RENT, SALARY, TRAVELLING AND CONVEYANCE, LEGAL AND PROFESSIONAL EXPENSE ETC. SUCH EXPENSES WOULD HAVE BEEN I NCURRED FOR BOTH THE MANUFACTURING AND TRADING SEGMENTS. THE MOST SUITABLE AL LOCATION KEY FOR ALLOCATION OF INDIRECT EXPENSES IN THIS CASE, IS TURNOVER FROM RESPECTIVE SEGMENTS, I.E., MANUFACTURING AND ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 6 TRADING SEGMENTS. THE DRP HAS ALSO CONSIDERED THE REVISED SEGMENTAL AC COUNTS SUBMITTED BY THE ASSESSEE BEFORE THE TPO BUT THAT IS A LSO NOT CORRECTLY DONE. THE DRP HAS RE - DRAWN THE SEGMENTAL ACCOUNT FOR THE TRADING SEGMENT BY ALLOCATING INDIRECT EXPENSES IN THE PROPORTION OF TURNOVER OF MANUFACTURING AND TRADING SEGMENT, RESPECTIVELY. THE LINE BY LINE CALCULATION OF TRADING SEGMENT OF ASSESSEE IS DONE BELOW: - PROFIT AND LOSS ACCOUNT MANUFACTURING TRADING OTHER DOMESTIC TRANSACTIONS TOTAL AS PER P&L ACCOUNT OPERATING INCOME 41,98,89,270 7,98,72,909 9,01,38,117 58,99,00,296 OTHER INCOME - - 2,13,90,209 2,13,90,209 EXPORT INCENT IVES 3,62,830 - - 3,62,830 TOTAL INCOME 42,02,52,100 7,98,72,909 11,15,28,326 61,16,53,335 EXCISE DUTY 1,81,82,450 - - 1,81,82,450 COST OF MATERIALS CONSUMED 26,88,19,925 26,88,19,925 COST OF TRADED GOODS SOLD - 7,23,70,149 8,23,16,372 15,46,86,521 PERSONNEL EXPENSES(AL LOCATED IN THE RATIO OF SALES) 1,51,08,885 28,74,043 32,43,379 2,12,26,307 MANUFACTURING AND OTHER EXPENSES (BREAK UP GIVEN BELOW) 3,15,43,103 RENT 2,93,919 55,886 64,165 4,13,972 RATES AND TAXES(ALLOCATED IN THE RATIO OF SALES) 85,059 16,173 18,569 1,19,801 TRAVELL ING & CONVEYANCE (ALLOCATED IN THE RATIO OF SALES) 31,59,2,96 6,00,711 6,89,705 44,49,713 REPAIR & MAINTENANCE (ALLOCATED IN THE RATIO OF SALES) 28,56,650 5,43,166 6,23, 634 40,23,450 CONSUMABLES (ALLOCATED IN THE RATIO OF SALES) 18,30,220 3,47,999 3,99,555 25,77,774 TRAINING AND SEMINARS (ALLOCATED IN THE RATIO OF SALES) 888096 168863 193880 12,50,840 COMMUNICATION EXPENSE (ALLOCAT ED IN THE RATIO OF SALES) 900647 171250 196620 12,68,517 LEGAL & PROFESSIONAL (ALLOCATED IN THE RATIO OF SALES) 2383919 453280 520433 33,57,632 ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 7 INSURANCE (ALLOCATED IN THE RATIO OF SALES) 8I509I 154982 1 77942 11,48,016 POWER & FUEL ALLOCATED IN THE RATIO OF SALES) 5712154 1086114 1247020 80,45,288 PRINTING & STATIONERY (ALLOCATED IN THE RATIO OF SALES) 164915 31357 36003 2,32,275 ADVERTISING & BUSINESS PROMOTION (ALLOCATED IN THE RATIO OF SALES) 313756 59658 68496 4,41,910 BANK CHARGES (ALLOCATED IN THE RATIO OF SAFES) 1412 723 268616 308411 19,89,750 MISCELLANEOUS EXPENSES (ALLOCATED IN THE RATIO OF SALES) 2991 881 568879 653157 42,13,917 DEPRECIATION 81,81,043 15,55,551 17,86,00 3 1,15,22,597 LESS: ADJUSTMENT ON A/C OF DEPRECIATION 2,18,197 TOTAL OPERATING EXPENSES 33;38,82,432 8,13,26,678 9,25,43,346 50,59,80,903 OPERATING PROFIT 8,36,69,668 (14,53,769) (24,05,229) OP/TC 25% (2%) (2.60%) 6.4. AS PER THE SEG MENTAL ACCOUNTS RE - DRAWN ABOVE, THE ASSESSEE HAS INCURRED A NET LOSS OF ( - ) 2% IN THE TRADING SEGMENT WITH THE AE. NET MARGINS OF THE COMPARABL ES TAKEN IN THE TPO'S ORDER ARE GIVEN BELOW: NAME OP/TC BODYLINE INTERNATIONAL PVT . LTD . 7.42% J.K. HELEN CURT IS LTD . 5.91% AVERAGE MARGIN 6.66% 6.5. ACCORDINGLY, THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIO N FOR THE TRADING SEGMENT OF TH E ASSESSEE IS COMPUTED BELOW: - TOTAL COST (TC): 8,13,26,678 ALP AT A MARGIN OF 6.66% (106.66% OF TC): 8,67,43,165 ACTUAL PRICE RECEIVED: 7,98,72,909 DIFFERENCE: 68,70,256 ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 8 SINCE THE ARM S LENGTH PRICE OF THE INTERNATIONAL TR ANSACTION EXCEEDS THE ACTUAL PRICE RECEIVED BY THE A SSESSEE BY MORE THAN 5%, THE TPO/AO IS DIRECTED TO MAKE AN ADJUSTMENT OF RS. 68,70,256/ - TO THE INCOME IN RESPECT OF INTERNATIONAL TRANSACTIONS UNDERTAKEN BY THE ASSESSEE. 8. ON THE DIRECTION OF THE LD . DRP, THE AO MADE THE IMPUGNED ADDITION. NOW THE ASSESSEE IS IN APPEAL. 9. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE ITAT IN THE CASE OF FUJITSU INDIA LTD., GURGAON VS DCIT, CIRCLE - 11(1), NEW DELHI IN ITA NO. 6280/DEL/2012 FOR THE ASSESSMENT YEAR 2008 - 09 , ORDER DATED 02.02.2017 (COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD). IT WAS FURTHER SUBMITTED THAT THE ASSESSEE W AS ENGAGED IN THE MANUFACTURING AND WAS A LSO HAVING TRADING ACTIVITY, THE ARM S LENGTH PRICE IN MANUFACTURING ACTIVITY WAS ACCEPTED BY THE TPO/AO . HOWEVER, THE INDIRECT EXPENSES WERE ALLOCATED IN THE TRADING ACTIVITIES TO DETERMINE THE ARM S LENGTH PRICE. IT WAS STATED THAT FEW OF THE EXPENSES WH ICH WERE DIRECTLY RELATED TO THE MANUFACTURING ACTIVITY E.G. DEPRECIATION, WAGES, CONSUMABLE, POWER AND FUEL ETC. , WERE REQUIRED TO BE EXCLUDED WHILE ALLOCATING THE EXPENSES. IT WAS ALSO STATED THAT THE GOODS WERE DIRECTLY SUPPLIED BY THE ASSOCIATED E NTERP RISES TO THE THIRD PARTIES, T HEREFORE, ADJUSTMENT MADE BY THE TPO/ AO WAS NOT JUSTIFIED. ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 9 10 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE RATIO OF GROSS PROFIT MARGIN CANNOT BE APPLIED AS DIRECTED IN THE ORDER OF THE ITAT RELIED BY THE LD. COUNSEL FOR THE ASSESSEE BECAUSE IN CERTAIN SEGMENT, THERE CAN BE GROSS LOSS INSTEAD OF GROSS PROFIT MARGIN. HOWEVER, HE COULD NOT REBUT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT FEW OF THE EXPENSES WHICH WERE DIRECTLY RELATED TO THE MANUFACTURING SEGMENT COULD NOT HAVE BEEN ALLOCATED TO THE TRADING SEGMENT. 11 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ALLOCATION OF THE EXPENSES WHILE DETERMINING THE ARM S LENGTH PRICE ALSO INCLUDED SOME DIRECT EXPENSES E.G. DEPRECIATION, CONSUMABLES AND WAGES ETC. WHICH WERE RELATED ONLY TO THE MANUFACTURING SEGMENT. SO THOSE EXPENSES CANNOT B E ALLOCATED TO ANOTHER SEGMENT I.E. TRADING SEGMENT . WE, THEREFORE, REMAND THIS ISSUE BACK TO THE FILE OF THE TPO/AO FOR PROPER ALLOCATION AND DETERMINING THE ARM S LENGTH PRICE. ACCORDINGLY, THE DIRECTIONS GIVEN BY THE LD. DRP ARE MODIFIED TO THIS EXTENT THAT EXPENSES WHICH ARE DIRECTLY RELATED TO THE MANUFACTURING ACTIVITY ARE TO BE EXCLUDED FROM THE LIST OF THE TOTAL EXPENSES TO BE ALLOCATED TO THE TRADING SEGMENT ON THE BASIS OF TURNOVER RATIO. IN OUR OPINION, THE FACTS IN THE CASE OF FUJITSU INDIA LTD. VS DCIT (SUPRA) RELIED BY THE LD. COUNSEL FOR THE ASSESSEE ARE DIFFERENT FROM THE ASSESSEE S CASE BECAUSE IN THE SAID CASE IT WAS HELD THAT THE ITA NO. 6197 /DEL /201 2 SILVER OAK LABORATORIES PVT. LTD. 10 TRADING SEGMENT WILL HAVE MORE GROSS REVENUE WHILE SERVICE SEGMENT WILL B E MORE WORK INTENSIVE BUT ENTAIL ING LO WER COST. HOWEVER, IN THE PRESENT CASE, NO SUCH FACTS ARE BROUGHT ON RECORD. MOREOVER, IN THE SAID CASE MANUFACTURING ACTIVITY WAS NOT INVOLVED WHILE IN THE PRESENT CASE REVENUE GENERATION FROM THE MANUFACTURING ACTIVITY IS ABOUT 70% OF THE TOTAL REVENUE G ENERATED. IT IS ALSO DIRECTED THAT T HE TPO/AO SHALL GRANT A DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE DECIDING THIS ISSUE. 12 . AS REGARDS TO GROUND NO. 5 RELATING TO THE LEVY OF INTEREST U/S 234B AND 234C OF THE ACT IS CONCERNED, I T WAS THE COMMON CONTENTION OF BOTH THE PARTIES THAT IT IS CONSEQUENTIAL IN NATURE. WE ORDER ACCORDINGLY. 13 . GROUND NO. 6 RELATING TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IS PRE - MATURE, HENCE, DISMISSED. 14 . IN THE RESULT, THE A PPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 28 /0 8 /2017 ) SD/ - SD/ - ( K. N. CHARY ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEM BER DAT ED: 28 /08 /2017 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR