Beam Global Spirits & Wine (India) Private Limited, New Delhi V. DCIT, Circle-4(2), New Delhi

ITA 961/DEL/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4696 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I1
• Assessment Year: 2016-2017
• Appeal Filed On: 12-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Transfer pricing; International transaction
• Section: 143(3); 143(1); 144C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI I-1 B ENCH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI LALIET KUMAR, JUDICIAL M EMBER ITA NO. 961/DEL/2021 [A.Y 2016-17] BEAM GLOBAL SPIRITS & WINE VS. THE DY. C.I.T. [INDIA] PVT. LTD. 12 TH FLOOR CIRCLE - 4 (2) DLF BUILDING NO. 10 NEW DELHI TOWER C, DLF CYBER CITY PHASE -2, GURGAON PAN : AAACA 1614 R [APPELLANT] [RESPONDENT] DATE OF HEARING : 28.09.2021 DATE OF PRONOUNCEMENT : 28.09.2021 ASSESSEE BY : SHRI KANCHAN KAUSHAL , ADV. SHRI RAVI SHARMA, ADV REVENUE BY : SHRI SURENDERPAL, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST OR DER DATED 31.03.2011 FRAMED U/S 143(3) R.W.S 144C(13) R.WS. 1 43(3A) AND 143(3B) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED T O AS 'THE ACT']. 2 2. THE GRIEVANCES OF THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE FINAL ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OF FICER (LD. AO) IS BAD IN LAW AND IS VOID AB-INITIO. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. ASSESSING OFFICER WHILE ISSUING THE NOTICE OF DEMAN D UNDER SECTION 156 OF THE INCOME-TAX ACT, 1961 (THE ACT) HAS ERR ED IN IGNORING THE FACT THAT THE DISPUTED TAX DEMAND OF RS. 10,45, 22,430 HAS BEEN SETTLED UNDER THE DIRECT TAX VIVAD SE VISHWAS ACT, 2020 (VSV ACT). 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. AO ERRED IN PASSING THE FINAL ASSESSMENT ORDER IN C ONTRAVENTION TO THE PROVISIONS OF SECTION 5(3) OF THE VSV ACT. FURT HER, IN DOING, THE LD. AO GROSSLY ERRED IN DISREGARDING THE EXPRES S PROVISIONS OF LAW PROVIDING FINALITY TO THE PROCEEDINGS CONCLUDED UNDER THE VSV ACT BY WAY OF ISSUANCE OF FORM 5 BY THE DESIGNATED AUTHORITY. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT F OR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INC OME ON 29.11.2016 DECLARING LOSS OF RS. 23.29 CRORES. RETURN WAS PRO CESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY, STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 3 4. THE TPO PASSED AN ORDER U/S 92CA(3) OF THE ACT O N 31.10.2019 WHEREIN THE TPO PROPOSED AN ADJUSTMENT OF RS. 31.59 CRORES BY TREATING THE ADVERTISEMENT, MARKETING AND PROMOTION EXPENSES TO BE AN INTERNATIONAL TRANSACTION. 5. PURSUANT TO THE ORDER OF THE TPO, THE ASSESSING OFFICER PASSED A DRAFT ASSESSMENT ORDER ON 11.12.2019 WHEREIN DISALL OWANCES/ADDITIONS INCLUDING TP ADJUSTMENTS AMOUNTING TO RS. 42.16 CRO RES WERE PROPOSED. 6. THE ASSESSEE RAISED OBJECTIONS BEFORE THE DRP VI DE MEMO DATED 09.01.2020. 7. IN THE MEANTIME, THE ASSESSEE WANTED TO TAKE THE BENEFIT OF DIRECT TAX VIVAD SE VISHWAS ACT, 2020 AND ACCORDING LY, NECESSARY FORM WAS FILED BEFORE THE DESIGNATED AUTHORITY TO SETTLE THE ISSUES ARISING OUT OF THE DRAFT ASSESSMENT ORDER. 8. THE ASSESSEE ALSO FURNISHED AN UNDERTAKING IN FO RM NO. 2 AS PER THE PROVISIONS OF SECTION 4(5) OF THE VSV ACT WAIVI NG ITS RIGHT TO PURSUE ANY CLAIM IN RELATION TO THE TAX ARREARS. 4 9. SUBSEQUENTLY, AS PER PROVISIONS OF SECTION 5(1) OF THE VSV ACT, THE DESIGNATED AUTHORITY GRANTED A CERTIFICATE DAT ED 26.12.2020 IN FORM 3 PROVIDING THE PARTICULARS OF TAX ARREARS AND THE AMOUNT PAYABLE. 10. IN LIGHT OF THE PROVISIONS OF SECTION 4 OF VSV ACT, THE ASSESSEE FILED LETTER DATED 21.01.2021 WITH THE DRP FOR WITH DRAWAL OF THE OBJECTIONS ON ACCOUNT OF APPLICATION FILED UNDER VS V ACT. THE ASSESSEE WAS FINALLY SERVED WITH FORM 5 ON 05.02.2021 EVIDEN CING THAT THE ASSESSEE HAS SETTLED THE DISPUTED TAX DEMAND UNDER VSV ACT. 11. ON 01.03.2021, THE DRP ACCEPTED THE REQUEST OF THE ASSESSEE AND DISMISSED THE OBJECTIONS AS WITHDRAWN AND DIRECTED THE ASSESSING OFFICER TO TAKE NECESSARY ACTION AS STATED UNDER TH E LAW. 12. IGNORING THE FACTUM MENTIONED HEREINABOVE, THE ASSESSING OFFICER FRAMED FINAL ASSESSMENT ORDER AND COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS. 18.87 CRORES AS AGAINST LOSS OF RS. 23.29 CRORES RAISING A DEMAND OF RS. 10.45 CRORES. 5 13. VIDE LETTER DATED 20.04.2021, THE ASSESSEE INFO RMED THE ASSESSING OFFICER THAT THE DEMAND NOTICE ISSUED U/S 156 OF THE ACT SHOULD NOT BE ENFORCED AS THE ASSESSEE HAS SETTLED THE DISPUTE UNDER VSV ACT AND BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER FORM 5 ISSUED BY THE DESIGNATED AUTHORITY ON 05.02.2021. 14. ON RECEIVING NO COMMUNICATION FROM THE ASSESSIN G OFFICER, THE ASSESSEE WAS LEFT WITH NO CHOICE BUT TO PREFER THIS APPEAL BEFORE THIS TRIBUNAL. 15. IN OUR CONSIDERED VIEW, ONCE FORM NO. 5 HAS BEE N ISSUED BY THE DESIGNATED AUTHORITY EVIDENCING THAT THE ASSESSEE H AS SETTLED THE DISPUTED TAX DEMAND UNDER VSV ACT AS PER THE RELEVA NT PROVISIONS OF THE ACT, THE ASSESSING OFFICER SHOULD NOT HAVE PROC EEDED TO FRAME THE FINAL ASSESSMENT ORDER DATED 31.03.2021 FRAMED U/S 143(3) R.W.S 144C (13) OF THE ACT AS FORM, 5 WAS ISSUED ON 05.02.2021 MUCH BEFORE THE DATE OF FINAL ASSESSMENT ORDER. 16. TO ADD INSULT TO INJURY, THE ASSESSING OFFICER DID NOT CARE TO REPLY TO THE LETTER DATED 20.04.2021 FILED BY THE ASSESSE E ASKING THE ASSESSING OFFICER TO QUASH THE DEMAND RAISED BY THE FINAL ASSESSMENT 6 ORDER SPECIFICALLY POINTING OUT TO THE ASSESSING OF FICER THAT FORM 5 HAS ALREADY BEEN ISSUED AND DISPUTED TAX DEMAND HAS ALR EADY BEEN SETTLED UNDER VSV ACT. 17. CONSIDERING THE AFOREMENTIONED FACTS IN TOTALIT Y AND PERUSING THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD BE FORE US BY THE ASSESSEE, WE HEREBY QUASH THE FINAL ASSESSMENT ORDE R AND DIRECT THE ASSESSING OFFICER TO DECIDE THE ISSUE IN LIGHT OF R ELEVANT PROVISIONS OF VSV ACT. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO . 961/DEL/2021 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.09. 2021. SD/- SD/- [LALIET KUMAR] [N.K. BIL LAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH SEPTEMBER, 2021 VL/ 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE DATE ON WHICH THE APPROVED DRAFT COMES TO THE DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DATE ON WHICH THE FAIR ORDER COMES BACK TO THE DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT DATE OF DISPATCH OF THE ORDER 8