Polaris Consulting & Services Limited, CHENNAI V. DCIT, CHENNAI

MA 347/CHNY/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7027 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 28-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: N VENKATRAMAN
• Keywords: Transfer pricing

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , !', $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER && / M.P. NO.347/CHNY/2017 (IN I.T.A. NO.615/MDS/2016) ' (' / ASSESSMENT YEAR : 2011-12 M/S POLARIS CONSULTING & SERVICES LIMITED, NO.244, POLARIS HOUSE, ANNA SALAI, CHENNAI - 600 006. PAN : AAACP 4341 E V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI - 600 034. (*+' /PETITIONER) (*,+-/ RESPONDENT) *+' / 0 /PETITIONER BY : SHRI N. VENKATRAMAN, SR. ADV OCATE *,+- / 0 / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT 1 / 2$ / DATE OF HEARING : 22.06.2018 34( / 2$ / DATE OF PRONOUNCEMENT : 02.08.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS PETITION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER O F THIS TRIBUNAL DATED 18 TH AUGUST, 2017. 2. SHRI N. VENKATRAMAN, THE LD. SR. COUNSEL, SUBMIT TED THAT WHILE ADJUDICATING THE ISSUE BY THIS TRIBUNAL, AN I NADVERTENT ERROR 2 M .P. NO.347/CHNY/17 HAS CREPT IN THE ORDER. ACCORDING TO THE LD. SR. C OUNSEL, THIS TRIBUNAL HAS NOT CONSIDERED THE MATERIAL EVIDENCE F ILED BEFORE IT. ACCORDING TO THE LD. SR. COUNSEL, PROBABLY, THE MAT ERIAL EVIDENCE MIGHT NOT HAVE BEEN PLACED BEFORE THIS TRIBUNAL / M EMBERS, THEREFORE, THERE IS AN INADVERTENT ERROR OF NON-CON SIDERING THE MATERIAL EVIDENCE FILED BY THE ASSESSEE. 3. REFERRING TO THE ORDER OF THIS TRIBUNAL, THE LD. SR. COUNSEL SUBMITTED THAT THIS TRIBUNAL OBSERVED THAT THE FUNC TIONAL RISK ASSUMED BY THE ASSOCIATED ENTERPRISE HAS TO BE ESTA BLISHED BY PRODUCING MATERIAL EVIDENCE. ACCORDING TO THE LD. SR. COUNSEL, THIS TRIBUNAL FURTHER OBSERVED THAT THE ASSESSEE MISERAB LY FAILED TO ESTABLISH FUNCTIONAL RISK ASSUMED BY THE ASSOCIATED ENTERPRISE IN UNCONTROLLED TRANSACTIONS. HOWEVER, ACCORDING TO T HE LD. SR. COUNSEL, THE ASSESSEE, IN FACT, FILED THE MATERIAL EVIDENCE TO SUBSTANTIATE THE FUNCTIONAL RISK ASSUMED BY THE ASS OCIATED ENTERPRISE. HENCE, THIS OBSERVATION WAS MADE BY TH IS TRIBUNAL WITHOUT CONSIDERING THE MATERIAL EVIDENCE FILED BEF ORE IT. THEREFORE, THE LD. SR. COUNSEL SUBMITTED THAT THE ORDER OF THI S TRIBUNAL MAY BE RECALLED AND THE MATTER MAY BE HEARD ON MERIT ONCE AGAIN. ON A QUERY FROM THE BENCH WHETHER ANY APPEAL WAS FILED B Y THE ASSESSEE BEFORE THE HIGH COURT? THE LD. SR. COUNSE L VERY FAIRLY 3 M .P. NO.347/CHNY/17 ADMITTED THAT AN APPEAL WAS FILED BEFORE THE HIGH C OURT AND IT IS NOT NUMBERED SO FAR. 4. WE HEARD SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. 5. THIS TRIBUNAL IN ITS ORDER AT PARAS 25 AND 26 HA S FOUND THAT THE TESTED PARTY FOR THE PURPOSE OF DETERMINING THE ARM'S LENGTH PRICE IS ALWAYS THE ASSESSEE AND NOT THE ASSOCIATED ENTERPRISE. IN THE SUBSEQUENT PARAGRAPH, IT WAS OBSERVED BY THE TR IBUNAL THAT UNLESS IT IS ESTABLISHED WITH MATERIAL EVIDENCE THA T ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY PERFORMED LESS COMPL EX OPERATION WITH MINIMUM RISK, IT CANNOT BE TAKEN AS TESTED PAR TY. THE ASSESSEE NOW CLAIMS THAT MATERIAL EVIDENCE WAS FILE D BEFORE THIS TRIBUNAL TO ESTABLISH THAT THE ASSOCIATED ENTERPRIS E OUTSIDE THE COUNTRY PERFORMED LESS COMPLEX OPERATION WITH MINIM UM RISK. THIS MATERIAL EVIDENCE WAS NOT CONSIDERED BY THIS TRIBUN AL. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT NON-CONS IDERATION OR REFERENCE TO THE MATERIAL EVIDENCE MAY NOT BE RELEV ANT IN VIEW OF THE CATEGORICAL FINDING RECORDED BY THIS TRIBUNAL A T PARA 26 OF ITS ORDER THAT THE TESTED PARTY FOR THE PURPOSE OF DETE RMINING THE ARM'S LENGTH PRICE IS ALWAYS THE ASSESSEE AND NOT THE ASS OCIATED ENTERPRISE. IN FACT, THIS TRIBUNAL PLACED ITS RELI ANCE ON THE MUMBAI 4 M .P. NO.347/CHNY/17 BENCH DECISION. SINCE THIS TRIBUNAL RECORDED A CAT EGORICAL FINDING THAT FOR THE PURPOSE OF DETERMINING ARM'S LENGTH PR ICE THE TESTED PARTY IS ASSESSEE AND NOT ASSOCIATED ENTERPRISE, TH E SUBSEQUENT OBSERVATION MADE BY THIS TRIBUNAL IN THE ORDER MAY NOT VITIATE THE CONCLUSION REACHED. MOREOVER, THE CONTENTION NOW R AISED BY THE ASSESSEE AMOUNTS TO REVIEW OF THE ORDER OF THIS TRI BUNAL. UNDER THE SCHEME OF INCOME-TAX ACT, REVIEW IS NOT PERMISSIBLE BY THIS TRIBUNAL. WHAT IS PERMISSIBLE IS ONLY A RECTIFICAT ION OF ERROR WHICH IS PRIMA FACIE APPARENT ON RECORD. MOREOVER, THE ASSESSEE HAS ALREADY FILED APPEAL WHICH IS SAID TO BE PENDING BE FORE THE HIGH COURT. THEREFORE, THIS TRIBUNAL FINDS NO REASON TO ENTERTAIN THE MISCELLANEOUS PETITION AT THIS STAGE. ACCORDINGLY, THE SAME IS DISMISSED. 6. WITH THE ABOVE OBSERVATION, THE MISCELLANEOUS PE TITION FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED COURT IN THE OPEN COURT ON 2 ND AUGUST, 2018 AT CHENNAI. SD/- SD/- ( !') ( ... ) (S. JAYARAMAN) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 2 ND AUGUST, 2018. KRI. 5 M .P. NO.347/CHNY/17 / *27& 8&(2 /COPY TO: 1. *+' / PETITIONER 2. *,+- /RESPONDENT 3. 1 92 () /CIT(A) 4. 1 92 /CIT 5. &: *2 /DR 6. ' ; /GF.