ACIT, CHENNAI V. M/s. Trimex Industries (P) Ltd., CHENNAI

MA 169/CHNY/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1077 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 05-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA IRS
• Assessee Lawyers: B S PURUSHOTTAM
• Keywords: Transfer pricing

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI VIKAS AWASTHY, JUDICIAL MEMBER M.P. NO.169/MDS/2013 (IN ITA NO. 2117/MDS/2010) ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE IV(3), CHENNAI - 600 034. V. M/S TRIMEX INDUSTRIES (P) LTD., NO.1, C.P. RAMASAMY AVENUE, ALWARPET, CHENNAI - 600 018. PAN : AABCT 0210 F (PETITIONER) (RESPONDENT) PETITIONER BY : SHRI S. DAS GUPTA, IRS, JCIT RESPONDENT BY : SHRI B.S. PURUSH OTTAM, CA DATE OF HEARING : 22 ND NOVEMBER, 2013 DATE OF PRONOUNCEMENT : 22 ND NOVEMBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS IS A MISCELLANEOUS PETITION FILED BY THE REV ENUE. THIS MISCELLANEOUS PETITION IS IN THE NATURE OF RECTIFIC ATION PETITION IN THE CONTEXT OF THE ORDER PASSED BY THE TRIBUNAL IN I.T. A. NO. 2117/MDS/2010 ON 25.6.2012. THE APPEAL CONSIDERED BY THE TRIBUNAL WAS FILED BY THE ASSESSEE FOR THE ASSESSME NT YEAR 2006- 07. THE ISSUE ADJUDICATED IN THE SAID APPEAL WAS R EGARDING THE 2 M.P. NO. 169/MDS/13 ADDITION OF ` 3,90,47,634/- MADE ON ACCOUNT OF TRANSFER PRICING A LP ADJUSTMENT. 2. THE FIRST MISTAKE, ACCORDING TO THE REVENUE, APP ARENT IN THE ORDER OF THE TRIBUNAL IS AS FOLLOWS:- IT IS EVIDENT FROM RECORDS THAT THE PRICE VARIATION BETWEEN THE SALE MADE TO AE AND NON-AE IS PREDOMINANTLY, BECAUSE OF THE DIFFERENT METHODS OF INVOICING AS FOB AND CIF. THE HONBLE ITAT HAS ALSO OBSERVED THAT THE TPO HAS OVERLOOKED THE SIMPLE ARITHMETIC OF THE CASE DISUSED IN OUR ORDER PASSED FOR THE EARLIER ASSESSMENT YEAR 2005-06. 3. THE SECOND MISTAKE, ACCORDING TO REVENUE, IS THE ONE REPRODUCED BELOW:- 2) IN THE PARA 24 AND 25 OF THE ABOVE REFERRED ORDER THE HONBLE ITAT HAS OBSERVED THAT THE TPO FAIL TO CONSIDER THE VARIATIONS IN QUANTITY BETWEEN AE AND NON AE FOR DETERMINATION OF ARMS LENGTH PRICE. THE HONBLE ITAT HAS DISCUSSED THE VARIATION IN THE QUANTITY OF BENTONITE LUMPS AND BENTONITE POWDER. THE HONBLE ITAT HAS HELD THAT THIS THE FATE OF OTHER REMAINING ITEMS. THUS THE HONBLE ITAT HAS APPLIED THE SAME FINDING IN RESPECT OF OTHER PRODUCT. THE ABOVE FINDING IS NOT CORRECT IN RESPECT OF THE PRODUCT POTASH FELDSPAR LUMPS FOR THE REASON THAT THE QUANTITY SOLD TO NON-AE WAS 57,487 METRIC TONS AS AGAINST 44,470 METRIC TONS SOLD TO AE. THEREFORE, THE NON-AE SALES IS MUCH MORE THAN THE AE SALE IN WHICH RESULTED IN AN ADJUSTMENT OF 79.87 LAKHS. THE HONBLE ITAT FAILED TO CONSIDER THIS POINT AND DELETED THE ENTIRE ADDITIONS WITH A SWEEPING OBSERVATION THAT THIS IS THE FATE OF THE OTHER REMAINING ITEMS. 3 M.P. NO. 169/MDS/13 4. WE HEARD SHRI DAS GUPTA, THE LEARNED JOINT COMMI SSIONER OF INCOME TAX, APPEARING FOR THE REVENUE AND SHRI B .S. PURUSHOTTAM, THE CHARTERED ACCOUNTANT, APPEARING FO R THE RESPONDENT-ASSESSEE. 5. IN THE CASE OF THE FIRST MISTAKE POINTED OUT BY THE REVENUE, IT IS TO BE SEEN THAT THE BASIS OF THE FINDING OF THE TRIBUNAL WAS THE DIFFERENTIAL INVOICING METHOD ADOPTED BY THE ASSESS EE. THE TRIBUNAL HAS ALSO REFERRED TO ITS ORDER PASSED IN A SSESSEE'S OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2005-06. WHEN THE TRIBUNAL HAS TAKEN NOTE OF THE DIFFERENCE IN THE INVOICE PRI CING, THERE CANNOT BE A CASE OF MISTAKE APPARENT FROM RECORDS. 6. REGARDING THE SECOND MISTAKE POINTED OUT BY THE REVENUE, WE FIND THAT THE TRIBUNAL HAS MADE A FINDING THAT T HE TPO HAS FAILED TO CONSIDER THE VARIATIONS IN QUANTITY BETWEEN AE A ND NON-AE FOR DETERMINING THE ARM'S LENGTH PRICE. THE FINDING OF THE TRIBUNAL ON THIS ISSUE WAS, THEREFORE, BASED ON A FACTUAL PROPO SITION. WHEN SUCH A FACTUAL PROPOSITION IS ACCEPTED, IT IS NOT A LWAYS NECESSARY TO COMPARE THE DIFFERENCE IN THE QUANTITY SOLD TO AE A ND NON-AE. 7. IT IS SUFFICE TO SAY THAT THERE IS NO MISTAKE AP PARENT FROM THE ORDER OF THE TRIBUNAL WITHIN THE MEANING OF SECTION 254(2) OF THE 4 M.P. NO. 169/MDS/13 INCOME-TAX ACT, 1961AND AS SUCH, NO AMENDMENT IS CA LLED FOR IN THE ORDER OF THE TRIBUNAL. 8. THIS MISCELLANEOUS PETITION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON FRIDAY, THE 22 ND OF NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K. NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 22 ND NOVEMBER, 2013. KRI. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.