M/S. COZ & KINGS INDIA PVT. LTD., V. ITO 1(1)(2),

MA 126/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7415 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Assessment Year: 2002-2003
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH: MUMBAI CORAM: SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER MA NO.126/MUM/2011 (ARISING OUT OF ITA NOS.982 AND 1937/MUM/2007 FOR A .Y. 2002-03) M/S. COX & KINGS (INDIA) PVT. LTD., TURNER MORRISON BLDG., 16 BANK ST., FORT, MUMBAI -400 023 ....... APPLICANT VS ITO -1(1)(2), MUMBAI ..... RESPONDENT PAN: AAACC 1921 B APPLICANT BY: SHRI RAJAN R. VORA RESPONDENT BY: SHRI PARTHASARATHI NAIK DATE OF HEARING: 29.07.2011 DATE OF PRONOUNCEMENT: 19.08,2011 O R D E R PER R.S. PADVEKAR, JM: THE ASSESSEE HAS FILED THIS MISC. APPLICATION UNDER SEC. 254(2) OF THE ACT BY STATING THAT THERE IS A MISTAKE APPAR ENT ON THE FACE OF THE ORDER PASSED BY THE HONBLE TRIBUNAL IN ITA NO. 982 & 1937 OF 2007 DATED 28TH AUGUST, 2010. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER, MORE PARTICULARLY, PAGE NO.11 OF THE TRIBUNAL ORDER. IN THIS CASE, THE TPO HAS MADE THE ADDITION OF RS 81,50,001/- IN RESPECT OF THE TRANSACTIONS WITH THE ASSOCIATED ENTERPRISES (AE) U/S.92CA(3) OF THE ACT. THE SAID ADDITION WAS BASED ON THE PREMISES THAT AS COMPARED TO NON-AE, THE ASSESSEE HAS GIVEN EXCESS CREDIT PERIOD TO THE AES. WHEN THE ASSESSEE HAS CHALLENGED THE ADDITION BEFORE THE LD. CIT (A), HE HELD MA 126/MUM/2011 M/S. COX & KINGS (INDIA) PVT. LTD. 2 THAT PERIOD BEYOND 100 DAYS SHOULD BE CONSIDERED FO R MAKING THE ADJUSTMENT TREATING THE SAME AS THE EXCESS CREDIT P ERIOD. THE LD. CIT (A) ALSO WORKED OUT THE AVERAGE CREDIT PERIOD ALLOW ED TO AES AS WELL AS NON-AES AND SUSTAINED THE ADDITION TO THE EXTENT OF RS 11,08,004/-. BOTH THE ASSESSEES AS WELL AS THE REVENUES CHALLE NGED THE REASONS AND FINDINGS OF THE LD. CIT (A). 3. SO FAR AS FIRST ISSUE OF THE WORKING OF THE AVER AGE CREDIT PERIOD IS CONCERNED THE TRIBUNAL CONFIRMED THE ORDER OF THE L D. CIT (A) AND IN CONSEQUENCE THE REVENUES GROUND HAS TO BE DISMISSE D. SO FAR AS ASSESSEES GROUND IS CONCERNED, AS THE AVERAGE CRED IT PERIOD WORKED OUT BY THE LD. CIT (A) WAS CONFIRMED, THE NEXT ISSU E OF DETERMINATION OF THE CORRECT QUANTUM OF THE ADDITION LEFT FOR DET ERMINATION. IN VIEW OF THE TRIBUNAL, AS PER THE PLAIN READING OF RULE 1 0B(2)(III) WOULD SUGGEST THAT THE ADJUSTMENT IS TO BE MADE BEFORE CO MPARISON AND IT IS NOT THAT THE VARIATIONS HAS TO ADJUSTED SEPARATELY. THE TRIBUNAL FURTHER OBSERVED THAT ON THE PERUSAL OF THE ORDER O F THE TPO AS WELL AS THE LD. CIT (A), IT IS SEEN THAT THERE IS NO FINDIN G THAT THE MARGINS AND TRANSACTIONS WITH AES AFTER ADJUSTMENT IN RESPECT O F CREDIT PERIOD IS LESS THAN THE MARGIN ON THE TRANSACTION IF THE AES ARE/OR UNRELATED PARTIES. THE TRIBUNAL, THEREFORE, PREFERRED TO REM AND THE ISSUE TO THE FILE OF THE A.O. TO THE EXTENT OF THE ADDITION SUST AINED BY THE LD. CIT (A) AND IN THE OPERATIVE PART, WHILE DECIDING THE S AID ISSUE OBSERVED THAT ACCORDINGLY, THIS ISSUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE IN BOTH THE APPEALS. IN OUR OPINION, THE CORRECT CON CLUSION SHOULD HAVE BEEN- ACCORDINGLY, RESPECTIVE GROUND IN THE ASSESS EES APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSE AND GROUND RAIS ED BY THE REVENUE IS DISMISSED. WE, ACCORDINGLY, PASS THE FOLLOWING CORRIGENDUM AND THE LAST SENTENCE OF THE PARAGRAPH 11 IS TO BE READ AS UNDER:- 11. ACCORDINGLY, RESPECTIVE GROUND RAISED BY THE A SSESSEE IS PARTLY ALLOWED FOR THE STATISTICAL PURPOSES AND GRO UND RAISED BY THE REVENUE IS DISMISSED. MA 126/MUM/2011 M/S. COX & KINGS (INDIA) PVT. LTD. 3 4. IN THE RESULT, M.A. IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 9TH AUGUST 2011. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 19TH AUGUST 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)CONCERNED., MUMBAI. 4) THE CIT- CONCERNED., MUMBAI. 5) THE D.R. L BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN MA 126/MUM/2011 M/S. COX & KINGS (INDIA) PVT. LTD. 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 01.08.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 01.08.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER