MWH INDIA PVT LTD., MUMBAI V. ASST CIT 12 (3)92), MUMBAI

ITA 8033/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3907 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VATSALYA SAXENA
• Keywords: Transfer pricing; International transaction
• Section: 271(1)(c); 92CA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 8033/MUM/2019 (ASSESSMENT YEAR 2008-09) MWH INDIA PVT. LTD. 168, UDYOG BHAVAN SONAWALA ROAD GOREGAON EAST MUMBAI-400 063. PAN : AAACA461 3L VS. ACIT, CIRCLE-12(3)(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI NIRAJ D. SHETH DEPARTMENT BY SHRI VATSALYA SAXENA DATE OF HEARING 06 . 1 0 .2021 DATE OF PRONOUNCEMENT 06.10.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE DISPUTE RESOLUTION PANEL DATED 28.8.2019 PERTAINING TO ASSE SSMENT YEAR (A.Y.) 2008- 09. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1:0 RE.: ADJUSTMENT OF US. 1,22,83,697/- U/S 92 CA OF THE INCOME-TAX ACT, 1961(THE ACT) ON ACCOUNT OF THE PROVISION OF CONSULTAN CY & DESIGN SERVICES: 1:1 THE ASSESSING OFFICER ('AO') HAS ERRED IN MAKIN G AN UPWARD ADJUSTMENT OF RS. 1,22,83,697/- IN PURSUANCE TO THE DIR ECTIONS OF THE HONORABLE DISPUTE RESOLUTION PANEL ('DRP') AND IN TH E LIGHT OF THE ORDER ISSUED UNDER SECTION 92CA(3) OF THE INCOME-TAX ACT 1961 {'THE ACT') BY THE TRANSFER PRICING OFFICER (TPCT) TO THE TOTAL INCOME OF THE APPELLANT BY HOLDING THAT THE INTERNATIONAL TRANSACTION RELATING TO PROVISION OF CONSULTANCY & DESIGN SERVICES ENTERED INTO BY THE APPELLANT WITH ITS ASSOCIATED ENTERPRISES ('AES') WAS NOT ENTERED AT ARM'S LENGTH PRICE ('ALP' ). 1:2 THE APPELLANT SUBMITS THAT THE LEARNED AO/TPO/DR P ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY REJ ECTING THE COMPARABLE COMPANIES SELECTED BY THE APPELLANT IN ITS TRANSFER PR ICING STUDY REPORT ('TPSR') WITHOUT GIVING ANY COGENT REASON FOR THEIR R EJECTION. MWH INDIA PVT. LTD. 2 1:3 THE APPELLANT SUBMITS THAT THE LEARNED AO/TPO/DRP ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE BY RE-COMPUTING THE PROFIT LEVEL INDICATOR ('PLF) WORKING OF THE APPELLANT. 1:4 THE APPELLANT SUBMITS THAT THE LEARNED AO/TPO/DRP ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY NOT A PPROPRIATELY CONSIDERING VARIOUS SUBMISSIONS AND JUDICIAL PRECED ENTS RELIED UPON BY THE APPELLANT WHICH ARE APPLICABLE, HAVING REGARDS TO THE FACTS OF THE APPELLANT'S CASE. 1:5 THE APPELLANT SUBMITS THAT THE LEARNED AO/TPO/DRP ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY RE JECTING COMPARABLE COMPANIES SELECTED BY THE ERSTWHILE TPO, THE BUSINESS OF WHICH IS FUNCTIONALLY COMPARABLE TO THAT OF THE APPELLANT. 1:6 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, THE I NTERNATIONAL TRANSACTION RELATING TO PROVISION OF CONSULTANCY & DESIGN SERVICES ENTERED INTO BY THE APPELLANT WITH ITS AES WAS ENTERED AT ALP AND HENCE N O ADJUSTMENT IN RESPECT THEREOF WAS CALLED FOR AND THE STAND TAKEN BY TH E AO IN THIS REGARD IS MISCONCEIVED, ERRONEOUS AND INCORRECT. 1:7 THE APPELLANT SUBMITS THAT THE AO BE DIRECTED TO DE LETE THE UPWARD ADJUSTMENT OF RS. 1,22,83,697/- MADE BY HIM TO THE APP ELLANT'S TOTAL INCOME AND TO RE-COMPUTE ITS TOTAL INCOME AND TAX LIABILITY AC CORDINGLY. 2:0 RE.: ADJUSTMENT OF US. 1,10,25,109/- U/S 92CA O F THE ACT ON ACCOUNT OF THE PAYMENT OFM AN AGE MERIT CHARGES: 2:1 THE APPELLANT SUBMITS THAT THE AO/TPO/DRP ERRED I N CONSIDERING THE CORPORATE CHARGES PAID BY THE APPELLANT TO ITS AES AS SHAREHOLDER SERVICES AND CONSEQUENTLY, ERRED IN DETERMINING THE ALP AS RS. NIL. 2:2 THE APPELLANT SUBMITS THAT THE AO/TPO/DRP ERRED IN INITIATING SEPARATE ADJUSTMENT IN RELATION TO PAYMENT OF MANAGEM ENT CHARGES WHICH HAS BEEN SUBSUMED IN THE OVERALL ENTITY LEVEL ADJUSTM ENT. 2:3 WITHOUT PREJUDICE TO ABOVE, THE APPELLANT SUBMIT S THAT THE AO/TPO/DRP ERRED IN CONSIDERING CORPORATE CHARGES A S NIL FOR THE PURPOSE OF CALCULATION OF PL1. 3:0 PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT 3:1 THE AO ERRED IN INITIATING PENALTY PROCEEDI NGS U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEA LMENT OF INCOME. 4:0 RE.: GENERAL: 4:1 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR SUBSTITUTE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL AT OR BEFOR E THE HEARING OF THE APPEAL. MWH INDIA PVT. LTD. 3 3. AT THE OUTSET IN THIS CASE LEARNED COUNSEL OF TH E ASSESSEE SUBMITTED THAT HE SHALL BE WITHDRAWING THE APPEAL. LEARNED DEPARTM ENTAL REPRESENTATIVE DID NOT HAVE ANY OBJECTION ON THIS PROPOSITION. 4. UPON CAREFUL CONSIDERATION, WE HAVE GRANTED PERM ISSION TO WITHDRAW THE APPEAL. ACCORDINGLY, THIS APPEAL IS DISMISSED AS WI THDRAWN. PRONOUNCED IN THE OPEN COURT ON 6.10.2021. SD/- SD/- (AMARJIT SINGH) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI; DATED : 06/10/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI