M/s Nike I P Ltd, Bangalore V. Deputy Commissioner of Income tax, Bangalore

MA 36/BANG/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5319 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 25-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMALADHAR ST ANDING
• Assessee Lawyers: VENKATESWARAN
• Keywords: Transfer pricing; Rectification of order; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI A .K. GARODIA , ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO , JUDICIAL MEMBER M.P. NO.36/BANG/2017 (IN I.T (T.P) A. NO S . 232 & 260 /BANG/201 4 ) (ASSESSMENT YEAR : 20 09 - 10 ) M/S. NIKE INDIA PVT. LTD., NO.701, MILLENIA TOWERS, MURPHY ROAD, BANGALORE - 560 008 PAN AABCN 9612K VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 12(2), BANGALORE. PETITIONER RESPONDENT. PETITIONER BY : SHRI VENKATESWARAN, ADVOCATE. RESPONDENT BY : SHRI KAMALADHAR, ST ANDING COUNSEL. DATE OF H EARING : 10.03.2017. DATE OF P RONOUNCEMENT : 22.03. 201 7 . O R D E R PER SHRI VIJAY P AL RAO, J. M. : THIS MISC. PETITION BY THE ASSESSEE FOR SEEKING RECTIFICATION OF MISTAKE IN THE ORDER DT.14.12.2016 OF THIS TRIBUNAL. 2. WE HAVE HEARD THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE AS WELL AS LEARNED DEPARTMENTAL REPRESENTATIVE AND CAREFULLY PERUSED THE RELEVANT 2 M.P. NO.36 /BANG/ 201 7 NIKE INDIA PVT LTD MATERIAL ON RECORD. AT THE TIME OF HEARING, THE LD. SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY GRIEVANCE OF THE ASSESSEE IS REGARDING OBSERVATIONS OF THE TRIBUNAL IN CONCLUDING PART OF PARA 9 AS WELL AS PARA 1 1 . T HE LD. SENIOR COUNSEL FOR THE ASSESSEE HAS POINTED OUT THAT THE TRIBUNAL WHILE DECIDING THE ISSUE OF INTERNATIONAL TRANSACTIONS IN RESPECT OF AMP EXPENDITURE HAS HELD THAT THE LOCAL AMP EXPENDITURE FOR WHICH THERE IS NO ARRANGEMENT OR AGREEMENT BETWE EN THE PARTIES CANNOT BE TREATED AS AN INTERNATIONAL TRANSACTION HOWEVER IN THE CONCLUDING PARA 9, THE TRIBUNAL HAS OBSERVED THAT THE SAME WOULD BE PART OF THE OTHER TRANSACTION WHEREAS IT IS THE CASE OF THE ASSESSEE THAT THERE IS NO OTHER INTERNATIONAL T RANSACTION. THUS THE LD. SENIOR COUNSEL FOR THE ASSESSEE CONCLUDED THAT THE TRIBUNAL MAY PASS APPROPRIATE DIRECTION IN THIS RESPECT. 3. THE SECOND GRIEVANCE OF THE ASSESSEE IS REGARDING THE OBSERVATIONS OF THE TRIBUNAL IN PARA 11 THAT THE AMP EXPENSES WHICH ARE NOT CONSIDERED AS INTERNATIONAL TRANSACTIONS SHOULD BE CONSIDERED AS PART OF OPERATING COST. THUS IT IS CONTENDED THAT WHEN THERE IS NO OTHER INTERNATIONAL TRANSACTION THEN THERE IS NO QUESTION OF COMPUTATION OF OPERATING COST. 3 M.P. NO.36 /BANG/ 201 7 NIKE INDIA PVT LTD 4 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY OPPOSED TO THE MISC. PETITION OF THE ASSESSEE AND SUBMITTED THAT WHEN THE TRIBUNAL HAS DECIDED THE ISSUE ON MERITS THEN THE RELIEF SOUGHT BY THE ASSESSEE WOULD AMOUNT TO REVIEW OF THE ORD ER OF THE TRIBUNAL WHICH IS BEYOND THE JURISDICTION AND SCOPE OF SECTION 254(2) OF THE ACT. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE TPO HAS NOT SPECIFICALLY CONSI DERED ANY OTHER TRANSACTI ON FOR COMPUTATION OF ALP EXCEPT AMP EXPENSES BUT THE ASSESSEE IN 3ECB HAS REPORTED VARIOUS INTERNATIONAL TRANSACTIONS. THEREFORE THE OBSERVATION OF THE TRIBUNAL IN THE END OF PARA 9 THAT THE AMP EXPENDITURE OTHER THAN BCCI EXPENSES NOT TO BE CONSIDERED A S INDEPENDENT INTERNATIONAL TRANSACTION BUT THE SAME WOULD BE PART OF OTHER INTERNATIONAL TRANSACTION MAY BE READ AS THE SAME WOULD BE PART OF OTHER INTERNATIONAL TRANSACTION , IF ANY . THE IMPUGNED ORDER STAND MODIFIED ACCORDINGLY. 5. AS REGARDS THE PART OF OPERATING COST IT IS CONSEQUENTIAL TO THE FIRST ISSUE THAT IF ANY INTERNATIONAL TRANSACTIONS IS REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF DETERMINATION OF ALP CONSEQUENT TO THE ORDER OF THE TRIBUNAL THEN 4 M.P. NO.36 /BANG/ 201 7 NIKE INDIA PVT LTD THE AMP EXPENSES OTHER THAN THE BCCI OUGH T TO BE CONSIDERED AS PART OF THE OPERATING COST FOR COMPUTATION OF ALP OF THE INTERNATIONAL TRANSACTIONS IF ANY. 6. NO OTHER MISTAKE HAS BEEN POINTED OUT DURING THE COURSE OF HEARING THEREFORE THE IMPUGNED ORDER STAND MODIFIED IN ABOVE TERMS. 7. I N THE RESULT, THE M.P. IS DISPOSED OFF IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 22 .03. 201 7 . SD/ - (A .K. GARODIA ) ACCOUNTANT MEMBER SD/ - (VIJAY PAL RAO) JUDICIAL MEMBER BANGALORE, DT. 22 .03. 2017. *REDDY GP COPY TO : 1 . APPELLANT 2 . RESPONDENT 3 . C.I.T. 4 . CIT(A) 5 . DR, ITAT, BANGALORE. 6 . GUARD FILE. ASSISTANT REGISTRAR INCOME TAX A PPELLATE TRIBUNAL BANGALORE.