LEIGHTON WELSPUN CONTRACTORS PVT. LTD., MUMBAI V. A.C.I.T. 10(1), MUMBAI

ITA 6936/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88216 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 21-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Assessee Lawyers: AJIT TOLANI
• Keywords: Transfer pricing; Opportunity of being heard; Principle of natural justice; International transaction; Corroborative evidences; Revised return
• Section: 92

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K, MUMBAI .. , ! , ' BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER ITA NO.6936/MUM/2012 ASSESSMENT YEAR: 2007-08 LEIGHTON INDIA CONTRACTORS PRIVATE LIMITED, 7/F, TOWER-3, EQUINOX BUSINESS PARK (PENINSULA TECHNO PARK), OFF BANDRA KURLA COMPLEX, LBS MARG, KURLA (WEST), MUMBAI-400070 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, RANGE-10(1), AAYKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( %&' /ASSESSEE) ( ( / REVENUE) P.A. NO.AAACL3338D %&' ) * ) * ) * ) * / // / ASSESSEE BY) SHRI AJIT TOLANI ( ) * ) * ) * ) * / REVENUE BY : SHR I S.D. SRIVASTAVA ) '+ / / / / DATE OF HEARING : 19/02 /2015 DATE OF ORDER : !, !, !, !, ) '+ / 19/02/2015 !, !, !, !, / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 13/08/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, BROADLY, UPHOLDING THE ACTION OF THE ASSESSING OFFI CER IN MAKING A REFERENCE TO TPO U/S 92CA(1) OF THE INCOME TAX ACT, LEIGHTON INDIA CONTRACTORS PRIVATE LIMITED . 2 1961 (HEREINAFTER THE ACT) WITHOUT INFORMING THE AS SESSEE ABOUT THE REASON FOR DISREGARDING THE ARMS LENGTH PRICE AND WITHOUT GRANTING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE MAKING THE REFERENCE ALONGWITH OTHER GROUNDS AS RAISED IN THE GROUNDS OF APPEAL. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE , SHRI AJIT TOLANI, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED CHALLENGING UPHOLDING THE ENTIRE ADJU STMENT MADE TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS BASED UPON THE ORDER OF THE TPO AND FURTHER UPHELD BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COUN SEL TOOK US TO THE VARIOUS PAGES OF THE VOLUMINOUS PAPER BOO K FILED BY THE ASSESSEE CLAIMING THAT THE NECESSARY DETAILS WE RE FILED BY THE ASSESSEE RIGHT FROM ASSESSMENT STAGE ITSELF WHI CH WERE NOT CONSIDERED IN PROPER PERSPECTIVE BY THE LD. ASSESSI NG OFFICER/TPO. IT WAS ALSO PLEADED THAT EVEN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IGNORED THE AD DITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE VIDE SUBMISSION DATED 5 TH AND 13 TH JULY, 2012 AS SUPPORTING DOCUMENTS. THE CRUX OF ARGUMENTS ADVANCED ON BEHALF OF THE ASSESSEE IS THA T THE DOCUMENTS/DETAILS FILED BY THE ASSESSEE WERE NOT CO NSIDERED AND PROPER OPPORTUNITY WAS NOT PROVIDED TO THE ASSE SSEE. 2.1. ON THE OTHER HAND, SHRI S.D. SRIVASTAVA, LD. DR, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BUT FAIRLY AGREED THAT THE NECESSARY DETAILS, THOUGH FI LED BY THE ASSESSEE, BEFORE THE ASSESSING OFFICER/TPO BUT A DE TAILED AND SPEAKING ORDER WAS NOT PASSED BUT ADDED THAT THE LD . LEIGHTON INDIA CONTRACTORS PRIVATE LIMITED . 3 COMMISSIONER OF INCOME TAX (APPEALS) HAS DULY CONSI DERED THE SUBMISSIONS OF THE ASSESSEE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT, IN BRI EF, ARE THAT THE ASSESSEE, A PRIVATE LIMITED COMPANY, IS ENGAGED IN THE BUSINESS OF OFFSHORE AND ONSHORE CONSTRUCTION INCLUDING EREC TION AND INSTALLATION, OFFSHORE OIL AND GAS OPERATION AND TELECOMMUNICATION PROJECTS ACROSS INDIA, DECLARED T OTAL TAXABLE INCOME OF RS.5,64,28,960/- IN ITS RETURN ELECTRONIC ALLY FILED ON 30 TH OCTOBER, 2007, WHICH WAS PROCESSED U/S 143(1) OF T HE ACT ON 27 TH FEBRUARY, 2009, ACCEPTING THE RETURNED INCOME. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED F OR SCRUTINY, THEREFORE, NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE FILED REVISED RETURN AT RS.8,51,81,900/- ON 3 RD MARCH, 2009. THE ASSESSEE VIDE LETTER DATED 4 TH AUGUST, 2010, ALSO FILED REVISED COMPUTATION OF INCOME, ADDING BACK ENTIRE EXPENSES RELATING TO TEC HNICAL SERVICE FEES, HAVING REGARD TO THE PROVISIONS OF SE CTION 40(A)(I) OF THE ACT REVISING ITS TOTAL INCOME TO RS.26,03,03 ,593/- AND PAID TAXES ALONG WITH INTEREST ON THE REVISED INCOM E. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTE RPRISES (AE) WITHIN THE MEANING OF SECTION 92 OF THE ACT. THE T PO CARRIED OUT TRANSFER PRICING ASSESSMENT AND PASSED ORDER U/ S 92CA(3) OF THE ACT MAKING ADDITION OF RS.20,18,57,196/- ON ACCOUNT OF PAYMENT FOR MANAGEMENT AND TECHNICAL SERVICES AVAIL ED AND PAYMENT OF TECHNICAL AND CONSULTING SERVICES. ON A PPEAL, THE LEIGHTON INDIA CONTRACTORS PRIVATE LIMITED . 4 STAND OF THE TPO/ASSESSING OFFICER WAS AFFIRMED AGA INST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBU NAL. 2.3. IF THE OBSERVATION MADE BY THE ASSESSING OFFIC ER/TPO, IMPUGNED ORDER, THE ASSERTIONS MADE BY THE LD. RESP ECTIVE COUNSEL AND THE MATERIAL AVAILABLE ON RECORD, IF KE PT IN JUXTAPOSITION AND ANALYZED, WE FIND MERIT IN THE AS SERTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT VOLUMINOUS PA PER BOOK WAS FILED BY THE ASSESSEE RIGHT FROM ASSESSMENT ST AGE. THUS, THE OBSERVATION MADE BY THE LD. ASSESSING OFFICER/T PO THAT NECESSARY DETAILS WERE NOT FILED BY THE ASSESSEE IS FACTUALLY INCORRECT. THE OBSERVATION MADE BY THE LD. ASSESSIN G OFFICER/TPO IS AS UNDER:- DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT DOCUMENTARY/SUPPORTING EVIDENCE TO SUBSTANTI ATE ITS CLAIM THAT MANAGEMENT, TECHNICAL AND SUPPORT SERVIC ES WERE AVAILED DURING THE FINANCIAL YEAR FROM ITS AE. THE ASSESSEE SUBMITTED PHOTOGRAPH OF VARIOUS STAGES OF INSTALLAT ION OF CIVIL WORK CARRIED OUT. HOWEVER, SUFFICIENT DOCUMENTARY EVIDENCE TO PROVE THE RECEIPTS OF SERVICES HAS NOT BEEN SUBSTAN TIATED BY THE ASSESSEE. DESPITE GIVING VARIOUS OPPORTUNITIES, THE ASSESSEE HAS FAILED TO JUSTIFY THE MANAGEMENT, TECHNICAL AND SUP PORT SERVICES RECEIVED FROM ITS AE. IN VIEW OF THE SAME, THE ABO VE TRANSACTION OF RS.2,67,35,498/- CANNOT BE CONSIDERED TO BE AT A RMS LENGTH AS PER THE TRANSFER PRICING REGULATIONS. HENCE, AN ADJUSTMENT OF RS.2,67,35,498/- IS MADE. 2.4. WE FIND THAT THE NECESSARY DETAILS WITH SUPPOR TING EVIDENCES WERE FILED BY THE ASSESSEE, WHEREAS, THE LD. TPO PASSED THE ORDER JUST IN THREE PAGES IN HURRIED MAN NER. WITHOUT GOING INTO MUCH DELIBERATION AND KEEPING I N VIEW, THE PRINCIPLE OF NATURAL JUSTICE AND TO SAFEGUARD THE I NTEREST OF LEIGHTON INDIA CONTRACTORS PRIVATE LIMITED . 5 BOTH SIDES, WE DEEM IT APPROPRIATE TO REMAND THIS A PPEAL TO THE FILE OF THE LD. ASSESSING OFFICER/TPO, WITH A DIREC TION TO EXAMINE THE CLAIM OF THE ASSESSEE AFRESH, UNINFLUEN CED BY THE OBSERVATION MADE IN THE IMPUGNED ORDER AND DECIDE A FRESH IN ACCORDANCE WITH LAW BY PASSING A SPEAKING ORDER. N EEDLESS TO MENTION HERE THAT DUE/SUFFICIENT OPPORTUNITY OF BEI NG HEARD WITH FURTHER LIBERTY TO FURNISH EVIDENCE, IF ANY, I N SUPPORT OF ITS CLAIM, BE PROVIDED TO THE ASSESSEE. THUS, THE APPEA L OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 19/02/2015. SD/- SD /- (B.R. BASKARAN) (JOGINDER SINGH) ! ! ! ! / ACCOUNTANT MEMBER ! ! ! ! / JUDICIAL MEMBER MUMBAI; -! DATED : 19/02/201 5 F{X~{T? P.S/. . . !, ) .'/ 0/1' !, ) .'/ 0/1' !, ) .'/ 0/1' !, ) .'/ 0/1'/ COPY OF THE ORDER FORWARDED TO : 1. 23 / THE APPELLANT 2. .423 / THE RESPONDENT. 3. 5 ( ) / THE CIT, MUMBAI. 4. 5 / CIT(A)- , MUMBAI 5. /7 .' , , / DR, ITAT, MUMBAI 6. 78% 9 / GUARD FILE. !, !, !, !, / BY ORDER, 4/' .' //TRUE COPY// : :: :/ // / ; ( ; ( ; ( ; ( (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI