Dy. Commissioner of Income-tax, Pune V. Amdoc Business Services P.Ltd., Pune

MA 134/PUN/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2572 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS M S VERMA
• Assessee Lawyers: ANUJ DESHMUKH
• Keywords: Transfer pricing; International transaction; Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER MA NO.134/PN/2013 (ARISING OUT OF ITA NO.1412/PN/2011) (ASSESSMENT YEAR : 2007-08) DY. COMMISSIONER OF INCOME TAX, CIRCLE- 1(1), PUNE. . APPELLANT VS. AMDOCS BUSINESS SERVICES PVT. LTD., GROUND FLOOR, TOWER VI, CYBERCITY, MAGARPATTA, HADAPSAR, PUNE 411 028. PAN : AAFCA0708H . RESPONDENT DEPARTMENT BY : MRS. M. S. VERMA, CIT ASSESSEE BY : MR. ANUJ DESHMUKH ORDER PER G. S. PANNU, AM THE CAPTIONED MISCELLANEOUS APPLICATION HAS BEEN PR EFERRED BY THE REVENUE WITH RESPECT TO THE ORDER OF THE TRIBUNAL I N ITA NO.1412/PN/2011 FOR ASSESSMENT YEAR 2007-08 DATED 23.07.2012. IT IS CO NTENDED BY THE REVENUE THAT AN ERROR HAS CREPT IN THE ORDER OF THE TRIBUNA L RELATING TO ADJUDICATION OF ASSESSEES PLEA FOR THE BENEFIT OF +/- 5% WHILE COM PUTING ARM'S LENGTH PRICE IN TERMS OF SECTION 92C(2) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). IT IS POINTED OUT THAT THE TRIBUNAL ALLOWED THE BENEFIT T O ASSESSEE, AS REFLECTED IN THE FOLLOWING DISCUSSION BY THE TRIBUNAL :- '7. IN VIEW OF THE PRECEDENT, THE STAND OF THE REVE NUE IN THE PRESENT CASE TO DENY THE ASSESSEE BENEFIT FOR ADJUS TMENT OF +/- 5% VARIATION WHILE COMPUTING ALP IS NOT JUSTIFIED. AS PER THE TR IBUNAL, THOUGH THE AMENDED PROVISO TO SECTION 92C(2) WAS APPLICABLE WITH EFFEC T FROM 01.10.2009, SO HOWEVER, FOR THE REASONS CONTAINED THEREIN, IT WOUL D NOT COVER SUCH LIKE CASES AS IS THE CASES BEFORE US. IN PARA 22 OF THE ORDER, WHICH HAS BEEN REPRODUCED ABOVE, IT HAS BEEN OBSERVED THAT THE APPLICABILITY OF AMENDMENT IS TO BE EFFECTIVE IN RESPECT OF A.Y. 2009-10 AND SUBSEQUENT YEARS AND SUCH INFERENCE WAS FOUND TO BE FORTIFIED BY THE DECISION OF THE DE LHI BENCH IN THE CASE OF ACIT VS. UE TRADE CORPORATION INDIA (P) LTD. VIDE I TA NO.4405(DEL)/2009 DATED 24.12.2010. APART FROM THE AFORESAID PRECEDEN T, THE ASSESSEE HAS ALSO MA NO.134/PN/2013 REFERRED TO CERTAIN TRIBUNAL DECISIONS, WHICH ARE O N SIMILAR LINES. IN VIEW OF THE AFORESAID DISCUSSION, WE FIND NO JUSTIFICATION IN T HE ACTION OF THE LOWER AUTHORITIES FROM DISENTITLING THE ASSESSEE FROM ITS CLAIM OF +/- 5% WHILE COMPUTING ALP IN TERMS OF ERSTWHILE PROVISO TO SECT ION 92C(2) OF THE ACT. 2. THE STAND OF THE REVENUE IS THAT THE AFORESAID D ECISION IS NOT IN LINE WITH THE INSERTION OF SECTION 92C(2A) OF THE ACT VI DE FINANCE ACT, 2012 WITH RETROSPECTIVE EFFECT. THE AMENDED SECTION READS AS UNDER: - '(2A) WHERE THE FIRST PROVISO TO SUB SECTION (2) AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO.2) ACT, 2009, IS APPLI CABLE IN RESPECT OF AN INTERNATIONAL TRANSACTION FOR AN ASSESSMENT YEAR AN D THE VARIATION BETWEEN THE ARITHMETICAL MEAN REFERRED TO IN THE SAID PROVISO A ND THE PRICE AT WHICH SUCH TRANSACTION HAS ACTUALLY BEEN UNDERTAKEN EXCEEDS FI VE PER CENT OF THE ARITHMETICAL MEAN, THEN, THE ASSESSEE SHALL NOT BE ENTITLED TO EXERCISE THE OPTION AS REFERRED TO IN THE SAID PROVISO. 3. IN VIEW OF THE ABOVE RETROSPECTIVE AMENDMENT, IT IS POINTED OUT BY THE REVENUE THAT :- THE AMENDED PROVISIONS MAKE IT VERY CLEAR THAT THE BENEFIT OF +/- 5% CAN BE GIVEN ONLY IF THE PRICE CHARGED BY THE ASSES SEE FALLS WITHIN THIS RANGE OF THE ALP AS DETERMINED BY THE TPO. IF THE PRICE CHARGED BY THE ASSESSEE FALLS BEYOND +/- 5% OF THE ALP, THEN THE ASSESSEE C ANNOT CLAIM BENEFIT OF THIS SAFE HARBOR. IN OTHER WORDS +/- 5% BENEFIT WAS NEV ER INTENDED TO BE A STANDARD DEDUCTION. 4. A PERUSAL OF THE AFORESAID APPLICATION REVEALS T HAT THE ERROR SOUGHT TO BE POINTED OUT BY THE REVENUE IS BASED ON AN AMENDMENT MADE BY FINANCE ACT, 2012 WITH RETROSPECTIVE EFFECT FROM 01.04.2002 WHER EBY SECTION 92C(2A) OF THE ACT HAS BEEN INSERTED. THE AFORESAID RETROSPEC TIVE AMENDMENT IS THUS APPLICABLE TO THE PERIOD UNDER CONSIDERATION BEFORE THE TRIBUNAL. THEREFORE, THE DECISION OF THE TRIBUNAL DATED 23.07.2012 (SUPR A) WITH RESPECT TO ASSESSEES CLAIM FOR THE BENEFIT OF ADJUSTMENT OF + /- 5% IS LIABLE TO BE DECIDED IN THE LIGHT OF THE AMENDED PROVISION OF THE ACT, W HICH HAS MADE EFFECTIVE RETROSPECTIVELY. THE ORDER OF THE TRIBUNAL IS MODI FIED TO THE SAID EXTENT. MA NO.134/PN/2013 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS ALLOWED TO THE ABOVE EXTENT. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 31 ST OCTOBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE DIRECTOR OF INCOME TAX (TP), PUNE; 4) THE CIT-I, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE