M/s. Karuturi Global Limited, Bengaluru V. Assistant Commissioner of Income Tax, Circle 4 (1) (1), Bengaluru

ITA 760/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4805 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 12-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRESCILLA SINGSIT
• Keywords: Business income; Transfer pricing; Opportunity of being heard; International transaction; Bad and doubtful debts; Condonation of delay
• Section: 92C; 143(3); 234B; 14A; 10B; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER IT (TP) A NO. 760 / BANG/201 8 ASSESSMENT YEAR : 20 1 2 - 1 3 M/S. KARUTURI GLOBAL LTD., #204, EMBASSY CENTER, 11, CRESCENT ROAD, BANGALORE 560 001. PAN: AAACK8275A VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4 (1) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SURESH MUTHUKRISHNAN, CA RESPONDENT BY : SMT. PRESCILLA SINGSIT , CIT (DR) DATE OF HEARING : 0 8 . 0 5 .2018 DATE OF PRONOUNCEMENT : 31 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THEASSESSEE AND THIS IS DIR ECTED AGAINST THE ASSESSMENT ORDER DATED 30.09.2016 PASSED BY THE AO U/S. 143(3) R.W.S. 144C OF IT ACT AS PER THE DIRECTIONS OF DRP. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE PANEL HAS ERRED IN DISMISSING THE OBJECTIONS OF THE APPELLANT BY HOLDING THAT THE SAME HAVE NOT BEEN FILED IN TIM E FAILING TO APPRECIATE THAT 10TH APRIL, 2016 BEING A SUNDAY, TH E DUE DATE OUGHT TO BE RECKONED AS 11TH APRIL, 2016 IN TERMS OF THE GENERAL CLAUSES ACT, 1897. 2. THE PANEL HAS ERRED IN DISMISSING THE OBJECTIONS OF THE APPELLANT BY HOLDING THAT THERE WAS A DELAY IN FILING OF THE SAM E AND THEREBY FAILING TO DISPOSE OF THE OBJECTIONS OF THE APPELLANT ON ME RITS. 3. THE ORDER OF THE LD. TRANSFER PRICING OFFICER IS WITHOUT JURISDICTION AND REQUIRES TO BE CANCELLED IN AS MUCH AS THE ID. ASSESSING OFFICER HAS NOT RECORDED ANY REASONS IN THE ASSESSMENT ORDE R PASSED THE BASIS ON WHICH HE REACHED THE CONCLUSION THAT IT WAS 'NEC ESSARY OR IT(TP)A NO.760/BANG/2018 PAGE 2 OF 8 EXPEDIENT' TO REFER THE MATTER TO THE LEARNED TRANS FER PRICING OFFICER FOR COMPUTATION OF THE ARM'S LENGTH PRICE AS IS REQ UIRED UNDER SECTION 92CA (1) OF THE INCOME TAX ACT 1961. 4. THE LD TRANSFER PRICING OFFICER HAS ERRED ON FAC TS AND IN LAW IN ENHANCING THE INCOME OF THE APPELLANT BY RS.26,22,3 5,875/- BY HOLDING THAT THE INTERNATIONAL TRANSACTIONS DO NOT SATISFY THE ARM'S LENGTH PRINCIPLE ENVISAGED UNDER THE ACT AND IN DOI NG SO HAVE GROSSLY ERRED IN NOT APPRECIATING THAT NONE OF THE CONDITIO NS SET OUT IN SECTION 92C(3) OF THE INCOME TAX ACT 1961 ARE SATISFIED IN THE APPELLANT'S CASE. 5. THE LD. TRANSFER PRICING OFFICER HAS ERRED IN CO MPUTING THE ARM'S LENGTH PRICE WITHOUT IDENTIFYING THE MOST APPROPRIA TE METHOD AS PER LAW AND IGNORING THE DOCUMENTATION MAINTAINED AND F URNISHED BY THE APPELLANT HAVING REGARD TO THE NATURE OF TRANSACTIO N CARRIED ON BY THE APPELLANT. 6. THE LD. TRANSFER PRICING OFFICER HAS ERRED IN CO MING TO THE CONCLUSION THAT THE GRANT OF INTEREST FREE ADVANCES AND ISSUANCE OF GUARANTEES NEED TO BE ANALYSED SEPARATELY AFTER HAV ING ACCEPTED THE MARGIN OF THE APPELLANT FOR THE FLORICULTURE SEGMEN T FAILING TO APPRECIATE THAT THESE ACTIVITIES ARE INTEGRAL TO IT AND SHOULD NOT BE ANALYSED SEPARATELY. 7. WITHOUT PREJUDICE TO THE ABOVE, THE ID. TRANSFER PRICING OFFICER HAS ERRED IN APPLYING COMPARABLE UNCONTROLLED PRICE AND PROCEEDING TO COMPUTE INTEREST ON THE INTEREST FREE ADVANCES MADE BY THE APPELLANT WITHOUT DETERMINING THE MOST APPROPRIATE METHOD IN TERMS OF SECTION 92C OF THE INCOME TAX ACT 1961 READ WITH RULE 10C O F THE INCOME TAX RULES 1962. 8. WITHOUT PREJUDICE TO THE ABOVE, THE LD. TRANSFER PRICING OFFICER HAS FAILED TO IDENTIFY A COMPARABLE TRANSACTION AS MAND ATED IN TERMS OF RULE 10B(3) WHILE DETERMINING THE ARM'S LENGTH PRIC E OF THE TRANSACTION AFRESH AND HAS INSTEAD DETERMINED THE S AME ON AN ADHOC BASIS. 9. WITHOUT PREJUDICE TO THE ABOVE, THE LD. TRANSFER PRICING OFFICER HAS ERRED BY NOT MAKING THE NECESSARY ADJUSTMENT AS IS REQUIRED IN TERMS OF RULE 10B(3)(II) OF THE INCOME TAX RULES 1962. 10. THE LD. TRANSFER PRICING OFFICER HAS ERRED BY P ROCEEDING TO COMPUTE THE ARM'S LENGTH PRICE IN VIOLATION OF THE MANDATORY RULE 10B BY NOT IDENTIFYING EITHER A COMPARABLE UNCONTROLLED TRANSACTION OR AN ENTERPRISE WHICH HAS ENTERED INTO SUCH A TRANSACTIO N AND THEREBY RENDERING THE COMPUTATION OF THE ARM'S LENGTH PRICE VOID AB INITIO AND HENCE THE SAME NEEDS TO BE DELETED. IT(TP)A NO.760/BANG/2018 PAGE 3 OF 8 11. THE LD. TRANSFER PRICING OFFICER HAS FAILED TO APPRECIATE THAT THE LOANS WERE GIVEN OUT OF OWN FUNDS AND FOR BUSINESS EXPEDIENCY AND HENCE NO ADJUSTMENT WAS WARRANTED ON ACCOUNT OF THE SAME. 12. WITHOUT PREJUDICE TO THE ABOVE, THE LD. TRANSFE R PRICING OFFICER HAS ERRED IN ARBITRARILY CLASSIFYING THE APPELLANT UNDER 'BB' GRADE AND PROCEEDING TO COMPUTE INTEREST AT 14.47% ON ADVANCES MADE BY IT TO IT'S SUBSIDIARIES WITHOUT ESTABLISHIN G ANY COMPARABLE TRANSACTION AS REQUIRED IN TERMS OF RULE 10B(A) OF THE INCOME TAX RULES 1962. 13. WITHOUT PREJUDICE TO THE ABOVE, THE LD. TRANSFE R PRICING OFFICER HAS ERRED IN BRINGING TO TAX A SUM OF RS. 20,15,79, 875/ - U/S 92CA OF THE ACT AND IGNORING THE SUBMISSION OF THE APPELLAN T TO COMPUTE THE INTEREST ON THE BASIS OF LIBOR RATES. 14. THE LD. TRANSFER PRICING OFFICER HAS ERRED IN M AKING ADJUSTMENT IN GUARANTEE COMMISSION AMOUNTING TO RS. 6,06,56,000/- OVERLOOKING THE FACT THAT NO COST WAS INCURRED BY THE APPELLANT FOR PROVIDING GUARANTEE. 15. THE ID. TRANSFER PRICING OFFICER HAS FAILED TO APPRECIATE THAT THE GUARANTEES WERE ISSUED ON THE PRINCIPLES OF COMMERC IAL EXPEDIENCY TO THE BANKERS OF THE SUBSIDIARY COMPANIES AND THE SAM E WOULD NOT CONSTITUTE AN INTERNATIONAL TRANSACTION U/S 92 B OF THE ACT AND THUS THE ADJUSTMENT MADE WAS VOID AB INITIO AND NEEDS TO BE DELETED, UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 16. THE LD. ASSESSING OFFICER ERRED IN BRINGING TO TAX THE ENTIRE PROCEEDS FROM AGRICULTURAL SALES AMOUNTING TO RS. 1 2,19,80,305.00/- BY TREATING THE SAME AS BUSINESS INCOME IGNORING TH E EVIDENCE AVAILABLE ON RECORD UNDER THE FACTS AND CIRCUMSTANC ES OF THE CASE. 17. THE LD. ASSESSING OFFICER ERRED IN BRINGING TO TAX THE ABOVE AGRICULTURAL INCOME ARISING FROM THE SALES OF ROSE SAPLINGS/FLOWERS AS BUSINESS INCOME BY REJECTING THE EVIDENCES PRODUCED BY THE APPELLANT ON SPECIOUS, UNSUSTAINABLE AND UNTENABLE GROUNDS. 18. THE LD. ASSESSING OFFICER ERRED IN TREATING AND BRINGING TO TAX THE AGRICULTURAL INCOME EARNED BY THE APPELLANT AS BUSI NESS INCOME, THEREBY DENYING THE CLAIM OF EXEMPTION U/S 10(1) OF THE INCOME TAX ACT 1961. 19. WITHOUT PREJUDICE TO THE ABOVE CONTENTIONS, THE ID. ASSESSING OFFICER HAVING TREATED THE AGRICULTURAL INCOME AS B USINESS INCOME OUGHT TO HAVE ALLOWED THE EXPENDITURE INCURRED FOR EARNING THE SAID INCOME. 20. THE LD. ASSESSING OFFICER ERRED IN DISALLOWING THE INTEREST IT(TP)A NO.760/BANG/2018 PAGE 4 OF 8 EXPENSES U/S 14A R.W RULE 8D AMOUNTING TO RS. 5,64, 45,148/- UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE . 21. THE LD. ASSESSING OFFICER ERRED IN DISALLOWING INTEREST EXPENDITURE OF RS.85,96,814 U/S 36(1)(III) R.W.S 37 OF THE INCO ME TAX ACT 1961BY IGNORING THE FACT THAT THE INVESTMENTS IN ASSOCIATE CONCERNS WERE STRATEGIC IN NATURE AND MADE WITH AN INTENTION TO I NCREASE AND DIVERSIFY THE BUSINESS OF THE APPELLANT. 22. THE LD. ASSESSING OFFICER HAS ERRED IN DISALLOW ING THE CLAIM OF BAD DEBTS AMOUNTING RS. 1,30,04,000 PURELY ON SUSPICION AND SURMISE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 23. THE LD. ASSESSING OFFICER HAS ERRED IN DISALLOW ING GREENHOUSE MAINTENANCE EXPENDITURE AMOUNTING TO RS. 24,000/- U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 24. THE LD.ASSESSING OFFICER HAS ERRED IN BRINGING TO TAX A SUM OF RS.77,97,30,484/-BEING THE AMOUNT DEBITED TOWARDS T HE PREMIUM PAYABLE ON THE REDEMPTION OF FOREIGN CONVERTIBLE CU RRENCY BONDS BY HOLDING THE SAME TO BE CONTINGENT IN NATURE UNDER T HE FACTS AND CIRCUMSTANCES OF THE CASE. 25. THE LD. ASSESSING OFFICER FAILED TO APPRECIATE THAT THE SAID AMOUNT OF RS. 77,97,30,484/- BEING THE AMOUNT DEBITED WAS TRANSFERRED FROM RESERVE AND SURPLUS (SECURITY PREMIUM ACCOUNT) TO S HORT TERM PROVISIONS AND THE SAME IS ONLY A RECLASSIFICATION OF LIABILITY, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 26. WITHOUT PREJUDICE TO THE ABOVE, THE LD. ASSESSI NG OFFICER HAS ERRED BY BRINGING TO TAX A SUM OF RS.55,36,83,000/- AS PR IOR PERIOD EXPENSES WHICH IS A PART OF RS.77,97,30,484/- ALREADY DISALL OWED SUPRA, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 27. THE LD. ASSESSING OFFICER HAS ERRED BY BRINGING TO TAX A SUM OF RS.1,00,19,000/-AS REVERSAL OF GDR ISSUE EXPENSES F AILING TO APPRECIATE THAT THE SAME WERE NEVER CLAIMED AS EXPE NDITURE IN THE FIRST INSTANCE AND THE APPELLANT HAD EXCLUDED THE S AME RIGHTFULLY. 28. THE LD. ASSESSING OFFICER HAS ERRED IN ADDING B ACK THE ESOP EXPENSES OF RS.22,81,000/- UNDER THE FACTS AND CIRC UMSTANCES OF THE CASE. 29. THE APPELLANT DENIES ITSELF TO BE LIABLE FOR IN TEREST U/S. 234B UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 30. THE APPELLANT DENIES ITSELF TO BE LIABLE FOR IN TEREST U/S. 234C UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. IT(TP)A NO.760/BANG/2018 PAGE 5 OF 8 31. FOR THE ABOVE AND OTHER GROUNDS WHICH MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED AND JUSTICE RENDERED. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IT W AS HELD BY DRP THAT THE ASSESSEE HAS FILED BEFORE THE DRP OBJECTIONS TO THE DRAFT ORDER ON 11.04.2016 AND THUS THERE IS DELAY OF ONE DAY IN FILING THE OB JECTIONS. HE SUBMITTED THAT 10 TH APRIL, 2016 WAS SUNDAY AND THEREFORE, THERE IS NO DELAY IN FILING THE OBJECTIONS BEFORE THE DRP AND HENCE, THE MATTER SHO ULD BE RESTORED BACK TO THE FILE OF DRP FOR DECISION ON MERIT. AS AGAINST THIS, IT WAS SUBMITTED BY LD. DR OF REVENUE THAT MATTER SHOULD GO BACK TO THE FILE O F AO AND NOT TO DRP AND IN THIS REGARD, HE REFERRED TO RULE 28 OF ITAT RULES, 1963. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE RULE 28 OF ITAT RULES, 1963. THE SAME IS AS UNDER. 28. WHERE THE TRIBUNAL IS OF THE OPINION THAT THE CASE SHOULD BE REMANDED, IT MAY REMAND IT TO THE AUTHORITY FROM WH OSE ORDER THE APPEAL HAS BEEN PREFERRED OR TO THE ASSESSING OFFIC ER, WITH SUCH DIRECTIONS AS THE TRIBUNAL MAY THINK FIT. 5. WE WOULD ALSO LIKE TO REPRODUCE SECTION 144C OF IT ACT. 144C. (1) THE ASSESSING OFFICER SHALL, NOTWITHSTANDING AN YTHING TO THE CON- TRARY CONTAINED IN THIS ACT, IN THE FIRST INSTANCE, FORWARD A DRAFT OF THE PROPOSED ORDER OF ASSESSMENT (HEREAFTE R IN THIS SECTION REFERRED TO AS THE DRAFT ORDER) TO THE ELIGIBLE ASS ESSEE IF HE PROPOSES TO MAKE, ON OR AFTER THE 1ST DAY OF OCTOBER, 2009, ANY VARIATION IN THE INCOME OR LOSS RETURNED WHICH IS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. (2) ON RECEIPT OF THE DRAFT ORDER, THE ELIGIBLE ASS ESSEE SHALL, WITHIN THIRTY DAYS OF THE RECEIPT BY HIM OF THE DRAFT ORDE R, (A) FILE HIS ACCEPTANCE OF THE VARIATIONS TO THE A SSESSING OFFICER; OR (B) FILE HIS OBJECTIONS, IF ANY, TO SUCH VARIATION WITH, (I) THE DISPUTE RESOLUTION PANEL; AND (II) THE ASSESSING OFFICER. (3) THE ASSESSING OFFICER SHALL COMPLETE THE ASSESS MENT ON THE BASIS OF THE DRAFT ORDER, IF (A) THE ASSESSEE INTIMATES TO THE ASSESSING OFFICE R THE ACCEPTANCE OF THE VARIATION; OR IT(TP)A NO.760/BANG/2018 PAGE 6 OF 8 (B) NO OBJECTIONS ARE RECEIVED WITHIN THE PERIOD S PECIFIED IN SUB- SECTION (2). (4) THE ASSESSING OFFICER SHALL, NOTWITHSTANDING AN YTHING CONTAINED IN SECTION 153 OR SECTION 153B, PASS THE ASSESSMENT ORDER UNDER SUB- SECTION (3) WITHIN ONE MONTH FROM THE END OF THE MO NTH IN WHICH, (A) THE ACCEPTANCE IS RECEIVED; OR (B) THE PERIOD OF FILING OF OBJECTIONS UNDER SUB-S ECTION (2) EXPIRES. (5) THE DISPUTE RESOLUTION PANEL SHALL, IN A CASE W HERE ANY OBJECTION IS RECEIVED UNDER SUB-SECTION (2), ISSUE SUCH DIREC TIONS, AS IT THINKS FIT, FOR THE GUIDANCE OF THE ASSESSING OFFICER TO ENABLE HIM TO COMPLETE THE ASSESSMENT. (6) THE DISPUTE RESOLUTION PANEL SHALL ISSUE THE DI RECTIONS REFERRED TO IN SUB-SECTION (5), AFTER CONSIDERING THE FOLLOWING , NAMELY: (A) DRAFT ORDER; (B) OBJECTIONS FILED BY THE ASSESSEE; (C) EVIDENCE FURNISHED BY THE ASSESSEE; (D) REPORT, IF ANY, OF THE ASSESSING OFFICER, VALU ATION OFFICER OR TRANSFER PRICING OFFICER OR ANY OTHER AUTHORITY; (E) RECORDS RELATING TO THE DRAFT ORDER; (F) EVIDENCE COLLECTED BY, OR CAUSED TO BE COLLECT ED BY, IT; AND (G) RESULT OF ANY ENQUIRY MADE BY, OR CAUSED TO BE MADE BY, IT. (7) THE DISPUTE RESOLUTION PANEL MAY, BEFORE ISSUIN G ANY DIRECTIONS REFERRED TO IN SUB-SECTION (5), (A) MAKE SUCH FURTHER ENQUIRY, AS IT THINKS FIT; O R (B) CAUSE ANY FURTHER ENQUIRY TO BE MADE BY ANY IN COME-TAX AUTHORITY AND REPORT THE RESULT OF THE SAME TO IT. (8) THE DISPUTE RESOLUTION PANEL MAY CONFIRM, REDUC E OR ENHANCE THE VARIATIONS PROPOSED IN THE DRAFT ORDER SO, HOWEVER, THAT IT SHALL NOT SET ASIDE ANY PROPOSED VARIATION OR ISSUE ANY DIRECTION UNDER SUB-SECTION (5) FOR FURTHER ENQUIRY AND PASSING OF THE ASSESSME NT ORDER. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT THE POWER OF THE DISPUTE RESOLUTION PANEL TO ENHANC E THE VARIATION SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE IN CLUDED THE POWER TO CONSIDER ANY MATTER ARISING OUT OF THE ASSESSMEN T PROCEEDINGS RELATING TO THE DRAFT ORDER, NOTWITHSTANDING THAT S UCH MATTER WAS RAISED OR NOT BY THE ELIGIBLE ASSESSEE. (9) IF THE MEMBERS OF THE DISPUTE RESOLUTION PANEL DIFFER IN OPINION ON ANY POINT, THE POINT SHALL BE DECIDED ACCORDING TO THE OPINION OF THE MAJORITY OF THE MEMBERS. (10) EVERY DIRECTION ISSUED BY THE DISPUTE RESOLUTI ON PANEL SHALL BE BINDING ON THE ASSESSING OFFICER. (11) NO DIRECTION UNDER SUB-SECTION (5) SHALL BE IS SUED UNLESS AN OPPORTUNITY OF BEING HEARD IS GIVEN TO THE ASSESSEE AND THE ASSESSING IT(TP)A NO.760/BANG/2018 PAGE 7 OF 8 OFFICER ON SUCH DIRECTIONS WHICH ARE PREJUDICIAL TO THE INTEREST OF THE ASSESSEE OR THE INTEREST OF THE REVENUE, RESPECTIVE LY. (12) NO DIRECTION UNDER SUB-SECTION (5) SHALL BE IS SUED AFTER NINE MONTHS FROM THE END OF THE MONTH IN WHICH THE DRAFT ORDER IS FORWARDED TO THE ELIGIBLE ASSESSEE. (13) UPON RECEIPT OF THE DIRECTIONS ISSUED UNDER SU B-SECTION (5), THE ASSESSING OFFICER SHALL, IN CONFORMITY WITH THE DIR ECTIONS, COMPLETE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED INSECTION 153 OR SECTION 153B, THE ASSESSMENT WITHOUT PROVIDI NG ANY FURTHER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH SUCH DIRECTION IS RECEIVE D. (14) THE BOARD MAY MAKE RULES FOR THE PURPOSES OF T HE EFFICIENT FUNCTIONING OF THE DISPUTE RESOLUTION PANEL AND EXP EDITIOUS DISPOSAL OF THE OBJECTIONS FILED UNDER SUB-SECTION (2) BY TH E ELIGIBLE ASSESSEE. (14A) THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY ASSESSMENT OR RE-ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER WITH THE PRIOR APPROVAL OF THE PRINCIPAL COMMISSIONER OR COMMISSIO NER AS PROVIDED IN SUB-SECTION (12) OF SECTION 144BA. (15) FOR THE PURPOSES OF THIS SECTION, (A) 'DISPUTE RESOLUTION PANEL' MEANS A COLLEGIUM C OMPRISING OF THREE PRINCIPAL COMMISSIONERS OR COMMISSIONERS OF I NCOME-TAX CONSTITUTED BY THE BOARD FOR THIS PURPOSE; (B) 'ELIGIBLE ASSESSEE' MEANS, (I) ANY PERSON IN WHOSE CASE THE VARIATION REFERR ED TO IN SUB- SECTION (1) ARISES AS A CONSEQUENCE OF THE ORDER OF THE TRANSFER PRICING OFFICER PASSED UNDER SUB-SECTION ( 3) OF SECTION 92CA; AND (II) ANY FOREIGN COMPANY. 6. FROM THE ABOVE PROVISIONS OF SECTION 144C OF IT ACT, IT IS SEEN THAT EVERY DIRECTION ISSUED BY DRP IS BINDING ON AO AND THEREF ORE, IN OUR CONSIDERED OPINION, IN THE FACTS OF THE PRESENT CASE, WHERE TH E DECISION OF DRP IS ON THIS BASIS THAT THE OBJECTIONS ARE FILED BY ASSESSEE BEF ORE DRP LATE BY ONE DAY AND THERE IS NO POWER OF CONDONATION OF DELAY TO DRP AN D HENCE, THE OBJECTIONS ARE REJECTED BY DRP, THE MATTER SHOULD GO BACK TO THE F ILE OF DRP AND NOT TO AO. WE HAVE CHECKED FROM THE PAST CALENDARS THAT IN FAC T, 10 TH APRIL, 2016 WAS SUNDAY AND THEREFORE, IF THE LAST DATE OF FILING OB JECTION BEFORE DRP IS 10 TH APRIL, 2016 AND THE SAME WAS FILED BEFORE THE DRP ON 11 TH APRIL, 2016, IT CANNOT BE SAID THAT THE OBJECTIONS FILED BEFORE DRP ARE LATE AND SAME SHOULD HAVE BEEN ACCEPTED BY DRP AND DECIDED BY DRP ON MERIT AS PER LAW. SINCE THIS HAS NOT IT(TP)A NO.760/BANG/2018 PAGE 8 OF 8 BEEN DONE, WE FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF DRP FOR DECISION ON MERIT REGARDING THE OBJECTIONS OF ASSES SEE AGAINST THE DRAFT ASSESSMENT ORDER AND DRP SHOULD PASS NECESSARY ORDE R AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BO TH SIDES. REGARDING THE CONTENTION OF LD. DR OF REVENUE THAT THE MATTER SHO ULD GO BACK TO THE FILE OF AO AND NOT TO DRP, WE HOLD THAT IN THE FACTS OF THE PR ESENT CASE, WHEN THE DIRECTION OF DRP IS BINDING ON AO AND DRP HAS SIMPL Y REJECTED THE OBJECTIONS OF ASSESSEE ON THIS WRONG BASIS THAT THE OBJECTIONS ARE FILED LATE BY ONE DAY AND IN FACT, THE OBJECTIONS WERE FILED IN TIME BECA USE 10 TH APRIL, 2016 WAS SUNDAY AND THE OBJECTIONS WERE FILED ON 11.04.2016 AND THE DRP SAYS THAT THE DELAY IS OF ONLY ONE DAY. HENCE WE FIND NO MERIT I N THE OBJECTION OF DR OF THE REVENUE THAT THE MATTER SHOULD GO BACK TO THE FILE OF AO AND NOT TO DRP BECAUSE THE GROUNDS RAISED IN THE APPEAL BEFORE US ARE REGARD THIS CONCLUSION OF DRP THAT THE OBJECTIONS ARE FILED AFTER LATE OF ONE DAY. ACCORDINGLY, WE RESTORE THE MATTER BACK TO THE FILE OF DRP FOR DECI SION ON MERIT AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BO TH SIDES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.