M/s.Suntech Business Solutions P. Ltd, Trivandrum V. The DCIT, Trivandrum

MA 18/COCH/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 2245 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 19-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: T A RAMABHADRAN
• Keywords: Transfer pricing; Rectification of order
• Section: 13; 90

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI, AM & GEORGE GEORGE K., J M M.P. NO. 18 /COCH/201 9 (ARSG. OUT OF I .T . A. NO . 509/COC H/20 1 6 ) ( ASSESSMENT YEAR : 20 1 2 - 13 M/S. SUN TECH BUSINESS SOLUTIONS (P) LTD., 321, NILA, TECHNOPARK CAMPUS, TRIVANDRUM - 695 581. [PAN:AAICS 8020K] VS. THE DEPUTY COMMISSIONER OF INCOME - TAX,C IRCLE - 2( 1 ) , TRIVANDRUM. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY S HRI T.A. RAMABHADRAN, CA REVENUE BY S MT. A.S. BINDHU, SR. DR DATE OF HEARING 05/04/ 2019 DATE OF PRONOUNCEMENT 05 /0 4 /2019 O R D E R PER CHANDRA POOJARI, ACCOUTNANT MEMBER: BY THIS MISCELLANEOUS APPLICATION , THE ASSESSEE SEEKS RECTIFICATION OF ORDER OF THE TRIBUNAL IN ITA NO. 509/COCH/2016 DATED 12/09/2018 FOR THE ASSESSMENT Y EAR 2012 - 13. 2. WITH REGARD TO THE FIRST GROUND, IT WAS SUBMITTED THAT T HE GRANT OF FOREIGN TAX CREDIT WAS REFERRED TO DRP INSTEAD OF THE ASSESSING OFFICER. FOR AY 2012 - 13, THE ASSESSEE WAS ON APPEAL FOR NON - GRANTING OF FOREIGN TAX CREDIT AS PER SECTIO N 90 OF THE ACT (GROUND NO. 8 OF THE APPEAL). AS PER PARA 11 OF THE IMPUGNED ORDER, M.P. NO . 1 8 / COCH/201 9 2 THE BENCH HA D DIRECTED THE DRP TO FRESHLY ADJUDICATE ON THE ABOVE MATTER. HOWEVER, THE LD. AR REQUESTED TO REFER THE MATTER TO THE AO FOR ADJUDICATION INSTEAD OF THE DRP. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. ADMITTEDLY, THE ISSUE OUGHT TO HAVE BEEN REMITTED TO THE ASSESSING OFFICER INSTEAD OF DRP. ACCORDINGLY, WE MODIFY PARA 11 AS FOLLOWS: 11. THE NEXT GROUND IN ITA NO.509/COCH/2016 IS WITH REGARD TO DENIAL OF FOREIGN TAX CREDIT CLAIMED BY THE ASSESSEE U/S. 90 OF THE I.T. ACT. AFTER HEARING BOTH THE PARTIES, THE ASSESSING OFFICER IS DIRECTED TO GIVE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THE ISSUE AFRESH. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4. FURTHER, IT WAS SUBMITTED THAT F OR AY 2011 - 12 AND AY 2012 - 13, THE ASSESSEE WAS ON APPEAL BEFORE THE TRIBUNAL ON THE RATE OF INTEREST ON ADVANCES IMPUTED BY THE TPO/AO. THE ASSESSEE SUBMITTED BEFORE THE BENCH THAT THE RATE OF INTEREST TO BE CONSIDERED SHOULD BE LIBOR/EURIBOR RATE AND NOT THE 5% RATE/SBIPLR RATE APPLIED BY THE TRANSFER PRICING OFFICER FOR THE RESPECTIVE YEARS. THE LD. AR RELIED ON THE COMBINED ORDER OF THE TRIBUNAL FOR AY 20 11 - 12 AND AY 2012 - 13 RELYING ON A SIMILAR JUDGMENT IN ASSESSEES OWN CASE FOR AY 2008 - 09 (ITA NO 167/COCH/2015 DATED 13/10 /2015). WITH RESPECT TO AY 2011 - 12, IT WAS SUBMITTED THAT THE T PO HAD USED THE 5% RATE FOR IMPUTING INTEREST ON ADVANCES GRANTED TO SUBSIDIARIES AND BRANCHES. HOWEVER, WITH RESPECT TO AY 2012 - 13. SB I PLR RATE WAS USED FOR IMPUTATION OF INTEREST BY THE TPO. IT WAS SUBMITTED THAT M.P. NO . 1 8 / COCH/201 9 3 T HE REASON DISCUSSED IN PARA 3 . 8 AND 3.9 OF THE ITAT ORDER FOR AY 2011 - 12 AND AY 2012 - 13, DOES NOT DEAL WITH THE USE OF S BI PLR RATE BY THE TPO FOR AY 2012 - 13. HOWEVER, IT WAS SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2013 - 14 HAD CLEARLY MENTIONED THE NON - APPLICABILITY OF SBI PLR FOR IMPUTING INTEREST ON ADVANCES GR ANTED TO SUBSIDIARIES AND BRANCHES. IN VIE W OF THE ABOVE DISCUSSION, THE LD. AR REQUESTED TO CLARIFY THE APPLICABILITY OF 5% RATE FOR AY 2012 - 13 AS WELL INSTEAD OF SBI PLR. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR. ACCORDINGL Y, WE MODIFY THE FINDINGS OF THE TRIBUNAL IN PARA 3.9.1 AS FOLLOWS: 3.9.1 IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, INTEREST RATE OF 5% IS TO BE CHARGED ON THE ADVANCES MADE TO AE. ACCORDINGLY, THE SAME IS TO BE CHARGED FOR THE ASSESSMENT YEAR 2011 - 1 2 AND 2012 - 13. HENCE, THIS GROUND OF APPEAL FOR THE ASSESSMENT YEAR 2011 - 12 IS DISMISSED AND FOR THE ASSESSMENT YEAR 2012 - 13 IS PARTLY ALLOWED. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2019 SD/ - SD/ - ( GEORGE GEORGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBE R ACCOUNTANT MEMBER M.P. NO . 1 8 / COCH/201 9 4 PLACE: KOCHI DATED: 5 TH APRIL, 2019 GJ COPY TO: 1 . M/S. SUN TECH BUSINESS SOLUTIONS (P) LTD., 321, NILA, TECHNOPARK CAMPUS, TRIVANDRUM - 695 581. 2. THE ASSISTANT COMMISSI ONER OF INCOME - TAX, CIRCLE - 2(1), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME - TAX(APPEALS), TRIVANDRUM. 4. T HE PR. C OMMISSIONER OF INCOME - TAX , TRIVANDRUM . 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN