DCIT, New Delhi V. M/s. Rolls Royce India P. Ltd., New Delhi

ITA 6800/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5662 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K KAPOOR
• Assessee Lawyers: SANJAY
• Keywords: Transfer pricing; Revised return

Judgement Text

1 ITA NO. 6800/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I-2 NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 6800/DEL/20 15 (A.Y 2011-12) DCIT CIRCLE-21(2), ROOM N. 222, C.R. BUILDING, I. P. ESTATE NEW DELHI (APPELLANT) VS ROLLS ROYCE INDIA P. LTD. 2 ND FLOOR, BIRLA TOWER WEST, 25, BARAKHAMBA ROAD NEW DELHI AABCR5277Q (RESPONDENT) APPELLANT BY SH. R. K. KAPOOR, ADV RESPONDENT BY SH. SANJAY PANDEY, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 15/5/2015 PASSED BY DCIT, CIRCLE 21(2) NEW DELHI U/S 143(3)/1 44C/92CA(4) OF INCOME TAX ACT, 1961. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE DRP HAS ERRED IN EXCLUDING THE COMPARABLE W HICH HAVE UPWARD IMPACT AND IS NOT EVEN HANDED IN RETENTION A ND EXCLUSION OF COMPARABLES, WHICH IS THE BASIC PRINCIPLE OF TP STA TUE. DATE OF HEARING 30.01.2019 DATE OF PRONOUNCEMENT 04.02.2019 2 ITA NO. 6800/DEL/2015 2. THE ORDER OF HONBLE DRP IS PERVERSE IS NOT APPR ECIATING THE FACTS OF THE CASE CORRECTLY IN THE LIGHT OF TP STAT UTE AND ALSO IN LIGHT OF EVIDENCE ACT. 3. DURING THE YEAR, THE ASSESSEE COMPANY WAS ENGAGE D IN THE BUSINESS OF SUPPLY OF POWER AND OIL & GAS PUMPING SYSTEMS, PART AND ENGINES RELATING THERETO AS WELL AS PROVIDING ENGINEERING SERVICES R ELATING TO POWER, OIL AND GAS SECTOR, PROVIDING PROJECT MANAGEMENT AND MARKETING SUPPORT SERVICES TO GROUP COMPANIES. THE REVISED RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 WAS FILED ON 30/3/2013 AT A TOTAL INCOME OF RS.38,2 2,94,149/-. REFERENCE TO THE TRANSFER PRICING OFFICER WAS MADE TO DETERMINE ARMS LENGTH PRICE U/S 92CA (3) OF THE INCOME TAX ACT. THE TPO PASSED THE ORDER ON 29/1/2015. THE ASSESSEE FILED OBJECTIONS BEFORE THE DRP. THE DRP VIDE DIRECTIONS DATED 9/9/2015 DIRECTED THE TPO. THE ASSESSMENT ORDER DA TED 15/5/2015 U/S 143(3)/144C/92CA (4) WAS PASSED ON 15/5/2015. 4. THE LD. AR SUBMITTED THE TRIBUNAL IN THE SAME A SSESSMENT YEAR I.E. ASSESSMENT YEAR 2011-12 IN ASSESSEES APPEAL BEING ITA NO. 6636/DEL/2015 VIDE ORDER DATED 22/4/2016 REFERRED BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER /TPO TO DECIDE THE TRANSFER PRICING ISSUE A FRESH AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. THE ASSESSING OFFICER PASSED A CONSEQUENTIAL ORDER U/S 254/143(3) DATED 20/10/2016 WITHOUT GIVIN G AN OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE FILED AN APPEAL BEFORE CIT( A) AGAINST ORDER DATED 20/10/2016 ON MERITS AS WELL AS ON LEGAL GROUNDS. THE CIT(A) VIDE ORDER DATED 31/7/2018 QUASHED THE ORDER U/S 254/143(3) DATED 20 /10/2016 AS THE SAME WAS PASSED WITHOUT FIRST PASSING DRAFT ORDER U/S 14 4C AND HELD THE SAME TO BE NONE CURABLE DEFECT. THUS, THE ASSESSMENT ORDER HA S BEEN REFERRED AS VOID-AB- INITIO RELYING ON DELHI HIGH COURTS DECISION IN CA SE OF JCB INDIA LTD 2017 TAXMAN.COM 155 & HON'BLE SUPREME COURT DECISION IN CASE OF CONTROL RISK INDIA PVT. LTD. 2018-TII-10-S.C-TP. THUS, THE LD. AR SUBMITTED THAT THE DEPARTMENTS APPEAL BEFORE THE TRIBUNAL FOR THE SAM E YEAR BECOMES 3 ITA NO. 6800/DEL/2015 INFRUCTUOUS IN THE ABSENCE OF ANY VALID ASSESSMENT ORDER AND IS LIABLE TO BE DISMISSED IN THIS PRELIMINARY GROUND ONLY. 5. THE LD. DR SUBMITTED THAT THE DEPARTMENT IS CHAL LENGING EXCLUSION OF THREE COMPARABLES AS PER THE DIRECTIONS GIVEN BY TH E DRP. THE LD. DR RELIED UPON THE ORDER OF THE TPO AND SUBMITTED THAT THE D RP ERRED IN EXCLUDED THE COMPARABLES WHICH HAVE AWKWARD IMPACT BUT THE LD. DR COULD NOT CONTROVERT THE FACT THAT THE ASSESSEES APPEAL HAS BEEN DECIDE D AND THE CIT(A) IN THE SECOND ROUND HAS PASSED THE ORDER. IN-FACT, THE LD . DR ALSO COULD NOT CONTROVERT THE MERITS OF THESE 3 COMPARABLES WHEREI N THE FUNCTIONAL PROFILE IS TOTALLY DIFFERENT FROM THE ASSESSEES FUNCTIONS. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011-12 THE TRIBUNAL HAS DECIDED THE ISSUE AND REMANDED THE SAME TO THE FILE OF THE ASSESSING OFFICER /TPO. THE TPO ALSO DECIDED THIS ISSUE IN S ECOND ROUND WHICH WAS AFTERWARDS CHALLENGED BEFORE THE CIT(A) AND CIT(A) SET ASIDE THE ORDER OF THE TPO/AO. SINCE THE ASSESSMENT ORDER ITSELF HAS BECO ME NULL AND VOID, THEN THE EMERGING ORDERS ALSO BECOMES VOID-AB-INITIO. TH EREFORE, DEPARTMENTS APPEAL DOES NOT SURVIVE AND BECOMES INFRUCTUOUS. 7. IN RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH FEBRUARY, 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 04/01/2019 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 4 ITA NO. 6800/DEL/2015 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 30.01. 2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 0 5 .0 2 .2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 0 5 .0 2 .2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 0 5 .0 2 .2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK