DCIT Non Corporate Circle 10(1), CHENNAI V. Metro Tunnelling Chennai L & T SUCG JV, CHENNAI

ITTPA 30/CHNY/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5261 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 06-02-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 21-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Transfer pricing; Additional evidence; Reasonable cause; Condonation of delay; Set aside

Judgement Text

IT (TP) A No.30/Chny/2019 िनधा रण वष /Assessment Year: 2013-14 The Dy. Commissioner- of Income Tax. Non-Corporate Circle-10(1), Chennai-34. v. M/s.Metro Tunnelling Chennai L&T SUCG JV, No.491/40/1, Nehru Park, Opp. Sangam Cinemas, Poonamalle High Road, Chennai-600 010. [PAN: AABAM 7867 R] (अपीलाथ /Appellant) ( यथ /Respondent) Department by : Mr.G. Johnson, Addl.CIT Assessee by : Mr.T. Banusekar, CA सुनवाई क तारीख/Date of Hearing : 25.01.2022 घोषणा क तारीख /Date of Pronouncement : 07.02.2022 आदेश / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-12, Chennai, dated 31.12.2018 and pertains to AY 2013-14. 2. We find that appeal filed by Revenue is barred by limitation for which necessary petition for condonation of delay explaining reasons for delay has been filed, for which, the ld.Counsel for the assessee did not raise any objection. Having heard both sides and considered petition filed by the Revenue for condonation of delay, we are of the considered view that आयकर अपीलीय अिधकरण, ’डी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI माननीय ी वी. दुगा राव, ाियक सद एवं माननीय ी जी. मंजूनाथा, , लेखा सद के सम BEFORE HON’BLE SHRI V. DURGA RAO, JUDICIAL MEMBER AND HON’BLE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER IT (TP) A No.30/Chny/2019 :: 2 :: reasons given by Revenue for not filing the appeal within the time allowed under the Act comes under reasonable cause as provided under the Act for condonation of delay and hence, delay in filing of above appeal is condoned and appeal filed by the Revenue is admitted for adjudication. 3. The brief facts of the case are that assessee is an Unincorporated Joint Venture (UJV) constituted vide agreement dated 28.01.2011. The assessee is engaged in the business of execution of a project for the Design & Construction of Underground Station and Associated Tunnels in Phase-I of Metro Project in Chennai. The assessee has filed its return of income for the AY 2013-14 on 28.11.2013 declaring a total income of Rs.14,23,44,400/-. The case was taken up for scrutiny and the assessment has been completed u/s.143(3) r.w.s.144C(3) of the Income Tax Act, 1961 on 09.12.2016 and determined taxable income at Rs.18,96,83,762/- by making additions towards disallowance of management fee paid to SUCG, China, for the reason that the assessee has not reported management fee paid to its Associated Enterprise in Form No.3CEB and further, no evidence has been filed to justify payment of management fee. The assessee carried the matter in appeal before the First Appellate Authority and the Ld.CIT(A) for the reasons stated in his Appellate Order dated 31.12.2018 deleted the additions made by the AO towards disallowance of management fee by considering certain additional evidences filed by the assessee. Aggrieved by the Ld.CIT(A), the Revenue is in appeal before us. IT (TP) A No.30/Chny/2019 :: 3 :: 4. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. At the time of hearing, the Ld.Counsel for the assessee as well as the Ld.DR present for the Revenue, have fairly agreed that the issue should go back to the file of the AO to re-consider the issue of payment of management fee to SUCG, China, in light of certain additional evidences filed by the assessee including Form No.3CD and Form No.3CEB along with Auditor’s Certificate in support of payment of management fee, because those evidences were first time filed before the Appellate Authority and the Ld.CIT(A) has not confronted those additional evidences to the AO for his comments in violation of Rule 46A of Income Tax Rules, 1962. We find that the Ld.CIT(A) has decided the issue by considering the copy of Form No.3CD and Voucher for booking the cost in AY 2012-13 and those two evidences were not filed before the AO at the time of assessment proceedings. Although, the Ld.CIT(A) has admitted additional evidences filed by the assessee, but has not given an opportunity of hearing to the AO to offer his comments on additional evidences filed by the assessee. Therefore, we are of the considered view that there is a clear violation of Rule 46A of Income Tax Rules, 1962 by the Ld.CIT(A). Hence, we are of the considered view that the issue needs to go back to the file of the AO for re-considering the issue of payment of management fee to SUCG, China, in light of additional evidences filed by the assessee. Hence, we set aside the issue to the file of the AO and direct IT (TP) A No.30/Chny/2019 :: 4 :: him to re-consider the issue in light of additional evidences filed by the assessee in accordance with law. 5. In the result, the appeal filed by the Revenue is treated as allowed for statistical purposes. Order pronounced on the 07 th day of February, 2022, in Chennai. Sd/- (वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (जी. मंजूनाथा) (G. MANJUNATHA) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 07 th February, 2022. TLN, Sr.PS आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु"/CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु" (अपील)/CIT(A) 6. गाड फाईल/GF