AGILENT TECHNOLOGIES (INTERNATIONAL) PVT. LTD., NEW DELHI V. DCIT, CIRCLE- 1(1), GURGAON

ITA 6562/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3460 (ITAT-DELHI)
• Duration Of Justice: 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Appeal Filed On: 31-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Transfer pricing
• Section: 143(3)

Judgement Text

SA NO.618 /DEL/2017 ITA NO. 6562/DEL/2017 ASSESSMENT YEAR: 2013 - 14 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI I - 1 BENCH, NEW DELHI [CORAM: PRAMOD KUMAR AM AND SUCHITRA KAMBLE JM ] SA NO. 618 /DEL/2017 IN ITA NO. 6562 /DEL/2017 ASSESSMENT Y EAR: 2013 - 14 AGILENT TECHNOLOGIES INTERNATIONAL PVT LTD ....................... ....APPELLANT PLOT NO CP 11, SECTOR 8,IMT MANESAR GURGAON 122 051 [PAN: AADCA4115C] VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1), GURGAON ........RESPONDENT ITA NO. 6562/DEL/2017 ASSESSMENT Y EAR: 2013 - 14 AGILENT TECHNOLOGIES INT ERNATIONAL PVT LTD ...........................APPELLANT PLOT NO CP 11, SECTOR 8,IMT MANESAR GURGAON 122 051 [PAN: AADCA4115C] VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1), GURGAON ........RESPONDENT APPEARANCES BY: RASHMI CHOPRA FOR THE A PPELLANT KUMAR PRANAV FOR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 10 , 201 7 DATE OF PRONOUNCING THE ORDER : NOVEMBER 10 , 2017 O R D E R PER PRAMOD KUMAR, AM : 1. THIS APPEAL, FILED BY THE ASSESSEE, IS DIRECTED AGAINST THE ORDER DA TED 29 TH SEPTEMBER 2017 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 144C SA NO.618 /DEL/2017 ITA NO. 6562/DEL/2017 ASSESSMENT YEAR: 2013 - 14 PAGE 2 OF 3 OF THE INCOME TAX ACT, 1961, AFTER INCORPORATING THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL, FOR THE ASSESSMENT YEAR 2013 - 14. AS T HE ISSUE REQUIRING OUR ADJUDICA TION IN THIS APPEAL IS A VERY SIMPLE FACTUAL ISSUES WITHIN A VERY NARROW COMPASS OF RELEVANT MATERIAL FACTS, W ITH THE CONSENT OF T HE PARTIES, THIS APPEAL ITSELF HAS BEEN TAKEN UP FOR HEARING AL ONGWITH THE STAY PETITION WHICH WAS LISTED BEFORE US TODAY . 2. THE ONLY GRIEVANCE PRESSED BEFORE US IS AGAINST AN ARMS LENGTH PRICE ADJUSTMENT OF RS 6,81,36,111 IN RESPECT OF THE PROVISION OF ITES 3. LEARNED COUNSEL POINTS OUT THAT THIS ADJUSTMENT IS BASED ON A SIMPLE CALCULATION ERROR BY THE ASSESSING OFFICER, WH ILE GIVING EFFECT TO THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL, INASMUCH AS THE CORRECT AVERAGE MARGIN OF THE COMPARABLES, AS HELD ADMISSIBLE BY THE DISPUTE RESOLUTION PANEL, COMES TO 16.92% WHICH IS VERY WELL WITHIN THE PERMISSIBLE RANGE OF 3% UNDER SECOND PROVISO TO SECTION 92C(2). HE SUBMITS THAT, AS AGAINST THE CORRECT AVERAGE MARGIN OF 16.92%, THE ASSESSING OFFICER HAS ADOPTED 18.25%. LEARNED COUNSEL HAS THEN TAKEN US THROUGH ALL THE COMPARABLES, THE RESPECTIVE MARGINS ADOPTED FROM MATERIAL ON REC ORD AND THE CALCULATION OF AVERAGE MARGIN. LEARNED COUNSEL ALSO SUBMITS THAT WHEN HE MET THE ASSESSING OFFICER AND REQUESTED HIM TO RECTIFY THIS APPARENT MISTAKE ON RECORD, THE ASSESSING OFFICER DECLINED TO EVEN ACCEPT THE RECTIFICATION PETITION WHICH HAD TO BE THEN FILED BEFORE IN THE DAK COUNTER. 4. LEARNED DEPARTMENTAL REPRESENTATIVE JUSTIFIES THE STAND OF THE ASSESSING OFFICER BUT HE DOES NOT DISPUTE THAT THE COMPUTATION OF AVERAGE MARGIN IS INDEED INCORRECT. NEVERTHELESS, HE URGES US TO REMIT THE MAT TER TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PERUSED THE MATERIAL ON RECORD, WE SEE MERITS IN THE PLEA OF THE LEARNED COUNSEL. WE HAVE OURSELVES VERIFIED THE CALCULATIONS AND WE FIND THE CORRE CT COMPUTATION OF AVER AGE MARGIN IS INDEED 16.92%. THERE IS ALSO NO DISPUTE THAT ONCE THE AVERAGE MARGIN 16.92%, NO ALP SA NO.618 /DEL/2017 ITA NO. 6562/DEL/2017 ASSESSMENT YEAR: 2013 - 14 PAGE 3 OF 3 ADJUSTMENT WILL BE WARRANTED. IN THIS VIEW OF THE MATTER, WE UPHOLD THE PLEA OF THE ASSESSEE AND DELETE THE IMPUGNED ADDITION OF RS 6,81 ,36,111. IT IS INDEED A SAD SITUATION THAT INSTEAD OF QUICKLY RECTIFYING THIS GLARING ERROR, THE ASSESSING OFFICER HAS EVEN DECLINED TO RECEIVE THE RECTIFICATION PETITION; SUCH AN APPROACH ON THE PART OF THE ASSESSING OFFICER, IF TRUE, IS DISAPPOINTING. 6 . IN THE RESUL T, THIS PLEA OF THE ASSESSEE IS UPHELD. 7. NO OTHER ISSUE WAS PRESSED BEFORE US. 8. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. 9 . AS THE APPEAL ITSELF IS DISPOSED OF, THE STAY PETITION, SEEKING A STAY ON COLLECTIO N/ RECOVERY OF THE RELATED UNPAID TAX AND INTEREST DEMANDS IMPUGNED IN THIS APPEAL, IS RENDERED INFR UCTUOUS. 10. THE STAY PETITION IS THUS DISMISSED AS INFRUCTUOUS. 11. TO SUM UP, WHILE THE APPEAL IS PARTLY ALLOWED IN THE TERMS INDICATED ABOVE , THE STA Y APPLICATION IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 10 TH DAY OF NOVEMBER, 2017 SD/XX SD/XX SUCHITRA KAMBLE PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI , THE 10 TH DAY OF NOVEMBER , 201 7 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CO MMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BE NCHES, NEW DELHI