DCIT, CHENNAI V. Bagwan Cybertek P. Ltd., CHENNAI

ITA 731/CHNY/2015

• Counselvise Citation: 73121714 RSA 2015
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2015
• Court: TRIBUNAL
• Department Lawyers: JOE SEBASTINCIT D R
• Assessee Lawyers: N V BALAJI
• Keywords: Transfer pricing; Additional evidence
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.731 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2010-11) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(2) CHENNAI. VS. M/S.BAHWAN CYBER TEK PRIVATE LTD., BAHWAN CYBERTEK PARK, 148,RAJIV GANDHI SALAI(OMR) OKKIYAM, THORAIPAKKAM, CHENNAI 600 097. PAN AABCB 2020 P ( / APPELLANT ) ( / RESPONDENT ) ITA NO.731 & 931 /MDS/2015 2 ./ I.T.A.NO.931 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2010-11) M/S.BAHWAN CYBER TEK PRIVATE LTD., BAHWAN CYBERTEK PARK, 148,RAJIV GANDHI SALAI(OMR) OKKIYAM, THORAIPAKKAM, CHENNAI 600 097 VS. DEPUTYT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(2) CHENNAI. PAN AABCB 2020 P ( / APPELLANT ) ( / RESPONDENT ) $% & ' / ASSESSEE BY : MR.N.V.BALAJI,ADVOCATE ()$% & ' / REVENUE BY : MR.JOE SEBASTIN,CIT, D.R * + & ,- / DATE OF HEARING : 28.05.2015 .# & ,- /DATE OF PRONOUNCEMENT : 10.06.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: BOTH THE ASSESSEE AS WELL AS THE REVENUE HAVE FI LED APPEALS AGAINST THE ORDER OF THE ORDER OF THE DEPUT Y COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-I(2), CHENNAI DATED 10.0 2.2015 PASSED UNDER SECTION 143(3) R.W.S 92CA OF THE ACT PURSUANT TO THE ORDER OF ITA NO.731 & 931 /MDS/2015 3 THE DISPUTE RESOLUTION PANEL, CHENNAI (D.R.P) IN F.NO.DRP/CHE/10/2014-15 DATED 20.12.2014. 2. AT THE OUTSET THE LD. A.R SUBMITTED A PETITION FROM THE ASSESSEE FOR ADMITTING THE ADDITIONAL EVIDENCE AND REQUESTED THE MATTER TO BE REMITTED BACK FOR FRESH CONSIDERATION. THE PETITION OF THE ASSESSEE IS REPRODUCED HEREIN BELOW FOR REFERENCE:- PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE FOR THE AFORESAID ASSESSMENT YEAR, THE HONBLE DRP/ THE LD. ASSESSING OFFICER /THE LEARNED TPO HAVE NOT ACCEPTED THE SEGM ENTATION DETAILS PROVIDED BY THE APPELLANT, THOUGH THE COSTS WERE AL LOCATED TO THE RESPECTIVE ASSOCIATED ENTERPRISES AND NON-ASSOCIATED ENTERPRIS E SEGMENTS ON A PRUDENT BASIS AND BASED ON SCIENTIFIC ALLOCATION KEYS. THE SAID SEGMENTATION DETAILS WERE FILED BEFORE THE LEARNED TPO, BUT THE SAME WAS NOT CONSIDERED AS IT WAS NOT AUDITED BY THE STATUTORY AUDITORS OF THE AP PELLANT. IN THIS REGARD, THE LEARNED TPO HAS STATED AS FOLLOWS IN HIS ORDER: THE ADJUSTMENT MADE BY THE ASSESSEE FOR THE DOMEST IC SEGMENT IS NOT AUTHENTIC. IF THE ASSESSEE IS IN GOOD FAITH, N OTHING HAS PREVENTED THE ASSESSEE TO PROVIDE NECESSARY EVIDENCES TO STAT UTORY AUDITORS TO COMPUTE THE SEGMENTAL RESULTS WHILE COMPUTING SEGME NT REVENUE, SEGMENT ASSETS, ETC. THE INTENTION OF THE ASSESSEE IS CLEAR, NOT TO PROVIDE ANY INFORMATION TO THE STATUTORY AUDITORS T O COMPUTE THE SEGMENT RESULT WHICH PROVIDES AN OPTION TO THE ASSE SSEE TO CHANGE THE SEGMENT PROFIT AT ANY TIME ON NEEDY BASIS WHICH IS AGAINST THE PRINCIPLE LAID IN AS 17. ITA NO.731 & 931 /MDS/2015 4 THE HONBLE DRP UPHELD THE ABOVE ACTION OF THE LEAR NED TPO DUE TO NON- AVAILABILITY OF AUTHENTIC SEGMENTAL RESULTS. HENCE , THE APPELLANT HAS OBTAINED THE ABOVE MENTIONED SEGMENTAL WORKING CERT IFIED FROM ITS STATUTORY AUDITOR IN ORDER TO SUBSTANTIATE THE DETAILS SUBMIT TED BEFORE LEARNED TPO/A.O AND HONBLE DRP. GRAVE PREJUDICE WOULD BE CAUSED TO THE APPELLANT IF IT IS NOT PERMITTED TO FILE AND REFER TO THE SAME IN THE COURSE OF THE APPEAL H EARING. THE APPELLANT FURTHER SUBMITS THAT THE NON-FILING OF THE ADDITION AL EVIDENCE AT THE TIME OF APPELLATE PROCEEDINGS WAS NEITHER WILLFUL NOR WANTO N, AS THE AFORESAID CERTIFICATE HAS BEEN OBTAINED BY THE APPELLANT ONLY SUBSEQUENT AND PURSUANT TO THE DIRECTIONS OF HONBLE DRP. SEGMENTAL INFORMATION IS THE CRITICAL ISSUE INVOLVE D IN THE TRANSFER PRICING ADJUSTMENT AMOUNTING TO INR 1,96,00,000 MADE BY THE DEPARTMENT AND HENCE, THE APPELLANT HUMBLY PRAYS THAT THE AUDITED SEGMENTAL CERTIFICATE SUBMITTED BY THE APPELLANT BE ADMITTED BY THIS HON BLE BENCH OF THE ITAT AND DECIDE THE CASE ON MERITS. 3. LD. D.R ALSO AGREED FOR REMITTING THE MATTER BA CK TO FILE OF LD.A.O FOR FRESH CONSIDERATION PROVIDED THE GROUNDS RAISED BY THE REVENUE WERE ALSO DECIDED AFRESH ON MERITS. 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. THE LD. A.R. HAS SU BMITTED THAT ITA NO.731 & 931 /MDS/2015 5 NON-FILING OF EVIDENCE AT THE TIME OF APPELLATE PRO CEEDINGS WAS NEITHER WILLFUL NOR WANTON, SINCE THE CERTIFICATES WERE OBTAINED BY THE APPELLANT ONLY SUBSEQUENT TO THE DIRECTIONS OF THE DRP. WE DO NOT FIND ANY REASON TO DISBELIEVE THE CONTENTIONS OF TH E LD. A.R. AT THE SAME TIME, THE REVENUE ALSO DID NOT EXPRESS ANY OBJ ECTION SUBJECT TO RECONSIDERATION OF THEIR GRIEVANCE RAISED IN THE AP PEAL. THEREFORE, IN THE INTEREST OF JUSTICE WE HEREBY REMIT BACK THE MATTER TO THE FILE OF LD. ASSESSING OFFICER FOR REFERRING THE CASE TO THE LD.TPO FOR DENOVO CONSIDERATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WEL L AS THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 10 TH JUNE, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 10 TH JUNE , 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF