Deputy Commissioner of Income Tax, Bangalore V. M/s. Adcock Ingram Limited, Bangalore

MA 26/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2251 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: L BHARATH
• Keywords: Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M.P. NO. 26/BANG/2019 (IN IT (TP) A NO. 1 25 / BANG/201 7 ) ASSESSMENT YEAR : 20 1 2 - 13 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1 (1) (2), BANGALORE. VS. M/S. ADCOCK INGRAM LIMITED, NO. 49C & D, BOMMASANDRA INDUSTRIAL AREA, ANEKAL TALUK, BANGALORE 560 099. PAN: AAGCA4343M APPELLANT RESPONDENT ASSESSEE BY : SHRI L. BHARATH, CA REVENUE BY : SHRI PRADEEP KUMAR, CIT (DR) DATE OF HEARING : 14 . 0 6 .201 9 DATE OF PRONOUNCEMENT : 21 . 0 6 .201 9 O R D E R PER SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER; THIS M.P. IS FILED BY THE REVENUE CONTENDING THAT THERE ARE CERTAIN APPARENT MISTAKES IN THE IMPUGNED TRIBUNAL ORDER DATED 03.08.2018. 2. THIS IS VERY SMALL M.P. RUNNING INTO HALF A PAGE AND HENCE, THE SAME IS REPRODUCED HEREINBELOW FOR READY REFERENCE. THE HON'BLE ITAT VIDE ITS ORDER IN IT(TP)A NO.125/BANG/2017, DT: 03.08.2018, WHILE ADJUDICATING THE ALP ADJUSTMENT IN RESPECT OF THE LICENSE FEE AND MANAGEMENT SERVICES FEE, HAS HELD THAT THE TPO CANNOT HOLD THE ALP AS 'NIL'. HOWEVER, THE CO-ORDINATE BENCH OF THE ITAT, BENGALURU, IN THE CASE OF VOLVO INDIA PVT LTD VS CIT(A), LTU, BANGALORE, IN IT(TP)A NO.384/BANG/2013, DATED 16.12.2016 HAS UPHELD THE PREPOSITION THAT THE TPO CAN HOLD THE ALP AS 'NIL'. GROUNDS OF APPEAL: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT NEEDS TO TAKE INTO CONSIDERATION THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT, BENGALURU, IN THE CASE OF VOLVO INDIA PVT LTD VS CIT(A), LTU, BANGALORE, IN IT(TP)A NO.384/BANG/2013, DATED 16.12.2016 M.P. NO. 26/BANG/2019 (IN IT(TP)A NO. 125/BANG/2017) PAGE 2 OF 3 WHILE DECIDING THE ISSUE OF ALP ADJUSTMENT MADE BY THE TPO IN RESPECT OF MANAGEMENT SERVICES FEE AND LICENSE FEE PAID BY THE ASSESSEE. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT IN HOLDING THAT THE TPO CANNOT HOLD THE ALP AS 'NIL' WITHOUT APPLYING ONE OF THE PRESCRIBED METHODS FOR CALCULATING THE ALP, NEEDS TO CONSIDER THE SAME IN THE LIGHT OF DECISION OF THE CO-ORDINATE BENCH OF THE ITAT, BENGALURU, IN THE CASE OF VOLVO INDIA PVT LTD VS CIT(A), LTU, BANGALORE (SUPRA). IT IS PRAYED THAT THE SAME MAY BE CONSIDERED. 3. IT WAS SUBMITTED BY LD. DR OF REVENUE THAT APPROPRIATE ORDER SHOULD BE PASSED AFTER CONSIDERING THE CONTENTION RAISED BY REVENUE IN THE M. P. 4. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS PER THE IMPUGNED ORDER, THE TRIBUNAL HAS FOLLOWED THE EARLIER TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2009-10 AND 2010-11. HE SUBMITTED THE COPY OF THIS TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2009-10 AND 2010-11 IN IT(TP)A NOS. 1039 & 1078/BANG/2015 DATED 31.01.2018. HE POINTED OUT THAT IN PARA 14 OF EARLIER TRIBUNAL ORDER, THE TRIBUNAL HAS DULY NOTED ABOUT THE TRIBUNAL ORDER RENDERED IN THE CASE OF VOLVO INDIA P LTD. VS. CIT (2017) 77 TAXMANN.COM 207 AND EVEN AFTER CONSIDERING THIS TRIBUNAL ORDER, THE TRIBUNAL IN THOSE TWO YEARS DECIDED THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE. HE ALSO SUBMITTED THAT IN PARA NO. 21 OF THE TRIBUNAL ORDER FOR ASSESSMENT YEARS 2009-10 AND 2010-11, THE TRIBUNAL HAS CONSIDERED ANOTHER TRIBUNAL ORDER RENDERED IN THE CASE OF MERCK LTD. VS. DCIT [2016] 69 TAXMANN.COM 45 (MUM.) AND RELEVANT PARAS OF THAT TRIBUNAL ORDER HAS BEEN REPRODUCED BY THE TRIBUNAL AND FROM THE SAME, IT CAN BE SEEN THAT TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. EKL APPLIANCES LIMITED (345 ITR 241) AND IT WAS HELD IN THAT CASE THAT THE DEPARTMENT IN EFFECT HAS QUESTIONED COMMERCIAL EXPEDIENCY OF THIS PAYMENT WHICH IS NOT PROPER AS PER THE JUDGMENT OF HONBLE DELHI HIGH COURT. HE SUBMITTED THAT BY FOLLOWING THIS TRIBUNAL ORDER RENDERED IN THE CASE OF MERCK LTD. VS. DCIT (SUPRA), THE TRIBUNAL HAS IN FACT FOLLOWED THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. EKL APPLIANCES LIMITED (SUPRA) IN THOSE TWO YEARS I.E. ASSESSMENT YEARS 2009-10 AND 2010- 11 AND IN THE PRESENT YEAR, THE TRIBUNAL HAS FOLLOWED ITS OWN ORDER IN EARLIER M.P. NO. 26/BANG/2019 (IN IT(TP)A NO. 125/BANG/2017) PAGE 3 OF 3 TWO YEARS AND HENCE, IN THE PRESENT YEAR ALSO, IT HAS TO BE ACCEPTED THAT THE TRIBUNAL ORDER IN THE CASE OF VOLVO INDIA P LTD. VS. CIT (SUPRA) STANDS CONSIDERED AND ALSO THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. EKL APPLIANCES LIMITED (SUPRA) STANDS CONSIDERED AND FOLLOWED AND THEREFORE, THERE IS NO MERIT IN THE M.P. FILED BY THE REVENUE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE PRESENT YEAR, THE TRIBUNAL HAS FOLLOWED THE EARLIER TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2009-10 AND 2010-11 AND IT IS SEEN THAT IN PARA NO. 14 OF THAT EARLIER TRIBUNAL ORDER, THE TRIBUNAL ORDER RENDERED IN THE CASE OF VOLVO INDIA P LTD. VS. CIT (SUPRA) WAS ALSO CONSIDERED AND APART FROM THAT, THE TRIBUNAL IN THOSE TWO YEARS HAS CONSIDERED ANOTHER TRIBUNAL ORDER RENDERED IN THE CASE OF MERCK LTD. VS. DCIT (SUPRA) AND IN TURN FOLLOWED THE JUDGMENT OF HONBLE DELHI HIGH COURT ALSO RENDERED IN THE CASE OF CIT VS. EKL APPLIANCES LIMITED (SUPRA). HENCE WE FIND NO MERIT IN THIS M.P. FILED BY THE REVENUE. 6. IN THE RESULT, THE M.P. FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST JUNE, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.