Globus Medical India Pvt. Ltd., CHENNAI V. ITO Corporate Ward 2(3), CHENNAI

ITTPA 34/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4571 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 22-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 10-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVASH
• Assessee Lawyers: S RAGHUNATHAN
• Keywords: Transfer pricing; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 115JB

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.(TP)A. NO. 34/CHNY/2019 / ASSESSMENT YEAR: 2013-14 M/S. GLOBUS MEDICAL INDIA PVT. LTD., PLOT NO. 117, DOOR NO. 11, THIRUMALAI NAGAR, 7 TH CROSS STREET, PERUNGUDI, CHENNAI 600 096. [PAN: AACCG5198G] VS. THE INCOME TAX OFFICER, CORPORATE WARD (2(3), ROOM NO. 504, WANAPARTHY BLOCK, 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 600 034. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. RAGHUNATHAN, ADVOCATE / RESPONDENT BY : SHRI HOMI RAJVASH, CIT / DATE OF HEARING : 13.05.2019 /DATE OF PRONOUNCEMENT : 22.05.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) 5, CHENNAI, DATED 07.03.2019 RELEVANT TO THE ASSESSMENT YEAR 2013-14. BESIDES CHALLENGING ON MERITS OF THE ISSUES RELATING TRANSFER PRICING MATTERS, THE ASSESSEE ALSO CHALLENGED EX- PARTE ORDER PASSED BY THE LD. CIT(A). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ADMITTING LOSS OF .68,92,142/- UNDER NORMAL COMPUTATION AND .(-) I.T.(TP)A. NO. 34/CHNY/19 2 75,51,467/- WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. THE RETURN FILED BY THE ASSESSEE WAS TAKEN UP FOR SCRUTINY. AFTER CONSIDERING THE DETAILS AND SUBMISSIONS, WHILE PASSING THE TP ORDER, THOUGH TREATED OTHER TRANSACTIONS ENTERED WITH AE AS ARMS LENGTH, WITH REGARD TO IMPORT OF FINISHED GOODS, THE TPO ADOPTED TNMM AS MOST APPROPRIATE METHOD (MAM) INSTEAD OF RPM ADOPTED BY THE ASSESSEE AND MADE DOWNWARD ADJUSTMENT TO THE IMPORT OF FINISHED GOODS FROM AES AMOUNTING TO .49,70,108/-. WITH REGARD TO MANAGEMENT SERVICE FEE, THE TOP TREATED THE ARMS LENGTH FOR THE TOTAL AMOUNT RECHARGED AS NIL AND THEREBY MADE DOWNWARD ADJUSTMENT TO THE MANAGEMENT SERVICE FEE FROM AES AMOUNTING TO .1,82,59,792/-. INCORPORATING THE SAME, THE ASSESSING OFFICER PASSED DRAFT ORDER UNDER SECTION 143(3) R.W.S. 144C(1) OF THE ACT DATED 30.12.2016 ARRIVING AT A TAXABLE INCOME OF .1,67,65,782/- UNDER NORMAL COMPUTATION AND .2,32,29,900/-. SINCE THE ASSESSEE DESIRED TO PREFER FURTHER APPEAL BEFORE THE LD. CIT(A), THE ASSESSING OFFICER PASSED FINAL ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 144C(3) OF THE ACT SAND RAISED THE DEMAND OF .78,78,060/-. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). DESPITE SERVICE OF VARIOUS NOTICES FOR HEARING, THERE WAS NO REPRESENTATION FROM ASSESSEES SIDE AND ACCORDINGLY, CONFIRMED THE ASSESSMENT ORDER. I.T.(TP)A. NO. 34/CHNY/19 3 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING VARIOUS DETAILS IN THE FORM OF AFFIDAVIT, THE LD. COUNSEL FOR THE ASSESSEE PRAYED FOR ONE MORE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO PRESENT ITS CASE BEFORE THE LD. CIT(A). 5. PER CONTRA, THE LD. DR ARGUED THAT THE LD. CIT(A) HAS GIVEN, AS MUCH AS, FIVE OPPORTUNITIES TO THE ASSESSEE FOR PRESENTING ITS CASE BEFORE HIM AND HENCE, PLEADED THAT NO MUCH OPPORTUNITY IS UNWARRANTED. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT THE LD. CIT(A) HAS NOT GIVEN OPPORTUNITIES TO THE ASSESSEE TO PRESENT ITS CASE BEFORE HIM. FROM THE DETAILS GIVEN IN THE AFFIDAVIT, WE FIND THAT SINCE THE FATHER OF THE LD. COUNSEL, HANDING THE MATTER PASSED AWAY ON 29.11.2018, HE COULD NOT APPEAR BEFORE THE LD. CIT(A) BETWEEN 29.11.2018 TO 20.12.2018. WHEN THE LD. COUNSEL FOR THE ASSESSEE HAS APPEARED IN VARIOUS TRANSFER PRICING MATTERS BEFORE VARIOUS CIT(A)S/ TAX MATTERS BEFORE HONBLE HIGH COURT, WHAT PREVENTED THE LD. COUNSEL TO APPEAR AND PRESENT THE CASE OF THE ASSESSEE BEFORE THE LD. CIT(A) WAS NOT BROUGHT ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT HE WAS EXCLUSIVELY AND EXHAUSTIVELY ATTENDING THE TRANSFER PRICING MATTERS BEFORE VARIOUS AUTHORITIES OF THE DEPARTMENT AS WELL AS BEFORE THE HIGH COURT AND PRAYED FOR ONE MORE I.T.(TP)A. NO. 34/CHNY/19 4 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO PRESENT ASSESSEES CASE BEFORE THE LD. CIT(A). IN VIEW OF THE ABOVE AND TO MEET THE ENDS OF NATURAL JUSTICE, WE DIRECT THE LD. CIT(A) TO GIVE ONE MORE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUES AFRESH IN ACCORDANCE WITH LAW WITHIN SIX MONTHS PERIOD. IF THE LD. COUNSEL /ASSESSEE HAS NOT COOPERATED WITH THE DEPARTMENT, THEN, THE APPELLATE ORDER PASSED BY THE LD. CIT(A) WOULD PREVAIL. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 22 ND MAY , 2019 IN CHENNAI. SD/ - SD/ - (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 22.05.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.