NIVEA INDIA PRIVATE LIMITED , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 10(3)(1), MUMBAI

MA 375/MUM/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2702 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2010-2011
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV GULGOTRA

Judgement Text

P A G E | 1 M.A NO. 375/MUM/2018 A.Y 2010 - 11 (ARISING OUT OF ITA NO. 1105/MUM/2015) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, M UMBAI BEFORE SHRI B.R.BASKARAN, AM AND SHRI RAVISH SOOD, JM M.A. NO.375 /MUM/2018 (ARISING OUT OF ITA NO.1105/MUM/2015 ) ( / ASSESSMENT YEAR:2010 - 11 ) NIVEA INDIA PVT. LTD. HYDE PARK, 3 RD FLOOR, SAKI - VIHAR ROAD ANDHERI (E), MUMBAI - 400 072. / VS. ACIT - 10(3)(1) ROOM NO. AAYAKAR BHAVAN, M.K. MARG, CHURCHGATE, MUMBAI - 400 020 ./ ./ PAN NO. AACCN1990P ( / APPLICANT) : ( / RESPONDENT ) / APPLICANT BY : SHRI. DHANESH BAFNA, A.R / RESPONDENT BY : SHRI. RAJIV GULGOTRA, D.R / DATE OF HEARING : 31 .08.2018 / DATE OF PRONOUNCEMENT : 1 2 .10.2018 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE UNDER SEC. 254(2) OF THE INCOME TAX, 1961 (FOR SHORT ACT) ARISES FROM THE ORDER PASSED BY THE TRIBUNAL UNDER SEC. 254(1) IN ITA NO. 1105/MUM/2015, DATED 21.03.2018 FOR A.Y 2010 - 11. 2. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE, AT THE VERY OUTSET OF THE HEARING OF THE APPLIC ATION TOOK US THROUGH THE FACTS OF THE CASE, TO THE EXTENT RELEVANT FOR DISPOSAL OF THE PRESENT MISCELLANEOUS P A G E | 2 M.A NO. 375/MUM/2018 A.Y 2010 - 11 (ARISING OUT OF ITA NO. 1105/MUM/2015) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) APPLICATION. THE LD. A.R SUBMITTED, THAT THE ASSESSEE HAD CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL AGAINST THE FINAL ASSESSMENT ORDER PASS ED BY THE A.O IN PURSUANCE TO THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL, MUMBAI (FOR SHORT DRP), FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y 2010 - 11. IT WAS SUBMITTED BY THE LD. A.R, THAT THE SAID APPEAL WAS DISPOSED OFF BY THE TRIBUNAL, VIDE A CONSOL IDATE ORDER DATED 21.08.2018. THE LD. A.R TAKING US THROUGH THE MISTAKE APPARENT FROM RECORD, WHICH AS PER HIM HAD CREPT IN THE AFORESAID ORDER, SUBMITTED THAT THE ASSESSEE HAD BY WAY OF A G ROUND OF APPEAL NO. 5 CONTENDED THAT AS REGARDS THE IMPORT TRANS ACTIONS OF THE ASSESSEE APPLICANT, THE FOREIGN ASSOCIATE ENTERPRISE (FOR SHORT AE) SHOULD BE TAKEN AS THE TESTED PARTY. IT WAS THE CONTENTION OF THE LD. A.R, THAT IT WAS SUBMITTED BEFORE THE TRIBUNAL THAT THE ISSUE WAS COVERED BY THE ASSESSES OWN CAS E FOR THE EARLIER YEAR I.E. A.Y 2007 - 08, WHEREIN THE TRIBUNAL WHILE ADMITTING THE ADDITIONAL GROUND OF APPEAL HAD OBSERVED THAT THERE WAS NO BAR IN SELECTING A FOREIGN AE AS THE TESTED PARTY, PROVIDED THE FOREIGN AE IS THE LEAST COMPLEX ENTITY AND RELIAB LE AND ACCURATE DATA ON COMPARABILITY IS AVAILABLE FOR BENCHMARKING PURPOSES. ACCORDINGLY, IT WAS SUBMITTED BEFORE THE TRIBUNAL, THAT AS THE FACTS AND THE CIRCUMSTANCES FOR THE YEAR UNDER CONSIDERATION REMAINED THE SAME, THUS THE ORDER PASSED BY THE TRIBUN AL IN THE ASSESSES OWN CASE FOR A.Y 2007 - 08 BE FOLLOWED. THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION SUBMITTED, THAT IN CONTEXT OF THE AFORESAID ISSUE PERTAINING TO SELECTION OF THE TESTED PARTY, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) HAD PLACED HIS SUBMISSIONS AS REGARDS THE SAME, WHICH WERE REPRODUCED AT PAGE 9 PARA 2.A OF THE AFORESAID CONSOLIDATE ORDER PASSED BY THE TRIBUNAL FOR A.Y 2008 - 09 TO 2012 - 13, AND READ AS UNDER: 4.2.A WITH REGARD TO THE ISSUE RELATED TO TESTED PARTY, T HE DR ARGUED THAT THE ASSESSEE HAD SUBMITTED THAT THE OVERSEAS AE.S HAD TO BE CONSIDERED AS TESTED PARTY FOR THE MANUFACTURING SEGMENT (SUPPLY OF RAW MATERIAL, PACKING MATERIALS AND SEMI - FINISHED GOODS) AS THE AE.S PERFORMED LEAST COMPLEX FUNCTIONS, THAT THE GROUND WAS APPLICABLE ONLY TO AY2008 - 09 AS THE APPELLANT HAD MANUFACTURING SEGMENT ALONG WITH DISTRIBUTION SEGMENT, THAT FRO M THE AY.2009 - 10 ONWARDS, THE ASSESSEE WAS IS ENGAGED IN ONLY ONE SEGMENT BEING DISTRIBUTION SEGMENT ,THAT FOR THE AY. 2009 - 10 TO 2012 - 13, THE DISTRIBUTION FUNCTION OF THE ASSESSEE WAS TO BE CONSIDERED AS LEAST COMPLEX AS COMPARED TO MANUFACTURING FUNCTION S PERFORMED BY THE AES. P A G E | 3 M.A NO. 375/MUM/2018 A.Y 2010 - 11 (ARISING OUT OF ITA NO. 1105/MUM/2015) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) 3. IN THE BACKDROP OF THE AFORESAID CONTENTION, IT WAS SUBMITTED BY THE LD. A.R, THAT DESPITE THE FACT THAT A SPECIFIC GROUND OF APPEAL NO. 5 WAS RAISED BY THE ASSESSEE AND CONTENTIONS AS REGARDS THE SAME WERE RAISED BY BOTH TH E PARTIES BEFORE THE TRIBUNAL, WHICH THOUGH HAD BEEN REFERRED TO BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL, HOWEVER, INADVERTENTLY THE SAID GROUND OF APPEAL RELATING TO SELECTION OF THE OVERSEAS AE AS THE TESTED PARTY HAD REMAINED OMITTED TO BE ADJUDI CATED UPON. 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) DID NOT CONTROVERT THE AFORESAID SUBMISSIONS SO RAISED BY THE LD. A.R BEFORE US. 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE ORDER OF THE TRIBUNAL PASSED UNDER SEC. 254(1) OF THE ACT, AND THE ORDERS OF THE LOWER AUTHORITIES. WE ARE PERSUADED TO SUBSCRIBE TO THE CONTENTION OF THE LD. A.R, THAT THE TRIBUNAL WHILE DISPOSING OFF THE AFORESAID APPEAL, HAD INADVERTENTLY OMITTED TO ADJUDICATE THE GROUND OF APPEAL NO.5 RAISED BY THE ASSESSEE IN CONTEXT OF THE SELECTION OF THE OVERSEAS AE AS THE TESTED PARTY. RATHER, ON A PERUSAL OF THE ORDER OF THE TRIBUNAL, IT EMERGES THAT THE CONTENTION ADVANCED BY THE LD. D.R IN HIS REBUTTAL TO THE AVERMENTS ADVANCED BY THE ASSESSEE IN CONTEXT OF THE SELECTION OF THE OVERSEAS AE AS A TESTED PARTY WERE THOUGH REFERRED TO BY THE TRIBUNAL AT PAGE 9 - PARA 4.2A , HOWEVER THE SAME THEREAFTER WAS NOT FOLLOWED BY AN ADJUDICATION OF THE ISSUE ON MERITS. WE THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERED VIEW, THAT THE NON - ADJUDICATION OF THE AFORESAID GROUND OF APPEAL NO. 5 HAS RENDERED THE ORDER OF THE TRIBUNAL AS SUFFERING FROM A MISTAKE, WHICH BEING GLARING, PATENT, APPARENT AND OBVIOUS FROM RE CORD, MAKING THE SAME AMENABLE FOR RECTIFICATION UNDER SEC. 254(2) OF THE ACT. IN TERMS OF OUR AFORESAID OBSERVATIONS THE ORDER PASSED BY THE TRIBUNAL UNDER SEC. 254(1) IS RECALLED, FOR THE LIMITED PURPOSE OF ADJUDICATING THE GROUND OF APPEAL NO. 5 . 6. W E THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS RECALL THE ORDER PASSED BY THE TRIBUNAL UNDER SEC. 254(1) WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE FOR A.Y 2010 - 11 IN ITA NO. 1105/MUM/2015, VIDE ITS ORDER P A G E | 4 M.A NO. 375/MUM/2018 A.Y 2010 - 11 (ARISING OUT OF ITA NO. 1105/MUM/2015) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) DATED 21.03.2018, FOR THE LIMITED PURPOSE OF AD JUDICATING THE GROUND OF APPEAL NO. 5. 7. THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRONO UNCED IN THE OPEN COURT ON 1 2 .10.2018 S D / - S D / - ( B.R.BASKARAN) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 12 .10.2018 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APP LLICANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 5 M.A NO. 375/MUM/2018 A.Y 2010 - 11 (ARISING OUT OF ITA NO. 1105/MUM/2015) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1)