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

MA 377/MUM/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2704 (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: 2008-2009
• 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.377 /MUM/2018 A.Y 2008 - 09 (ARISING OUT OF ITA NO. 7744/MUM/2012) 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.377 /MUM/2018 (ARISING OUT OF ITA NO.7744/MUM/2012 ) ( / ASSESSMENT YEAR:2008 - 09 ) 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) OF THE ACT IN ITA NO. 7744/MUM /2012, DATED 21.02.2018 FOR A.Y 2008 - 09 . 2. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE, AT THE VERY OUTSET OF THE HEARING O F THE APPLICATION 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.377 /MUM/2018 A.Y 2008 - 09 (ARISING OUT OF ITA NO. 7744/MUM/2012) 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 ASSESSMEN T ORDER PASSED 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 2008 - 09. IT WAS SUBMITTED BY THE LD. A.R, THAT THE SAID APPEAL WAS DISPOSED OFF BY THE TRIBUNAL, V IDE A CONSOLIDATE 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 AN ADDITIONAL GROUND OF APPEAL NO. 28 R.W GROUND OF AP PEAL NO. 2 - 6 , CONTENDED THAT AS REGARDS THE IMPORT TRANSACTIONS 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 TRIB UNAL THAT THE ISSUE WAS COVERED BY THE ASSESSES OWN CASE 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 RELIABLE AND ACCURATE DATA O F 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 R EMAINED THE SAME , THUS THE ORDER PASSED BY THE TRIBUNAL 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 T HE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) HAD PLACED HIS SUBMISSIONS, WHICH WERE REPRODUCED AT PAGE 9 PARA 2.A OF THE AFORESAID CONSOLIDATE ORDER OF THE TRIBUNAL FOR A.Y 2008 - 08 TO 2012 - 13, AND READ AS UNDER: 4.2.A WITH REGARD TO THE ISSUE RELATED TO TESTED PARTY, THE 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 FROM THE AY.2009 - 10 ONWARDS, THE ASSESSEE WAS IS ENGAGED IN ONLY ONE SEGMENT BEIN G 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 FUNCTIONS PERFORMED BY THE AES. P A G E | 3 M.A. NO.377 /MUM/2018 A.Y 2008 - 09 (ARISING OUT OF ITA NO. 7744/MUM/2012) 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 ADDITIONAL GROUND OF APPEAL NO. 28 WAS RAISED BY THE ASSESSEE , AND CONTENTIONS AS REGARDS THE SAME WERE RAISED BY BOTH THE PARTIES BEFORE THE TRIBUNAL, WHICH WERE REFERRED TO BY THE TRIB UNAL IN ITS ORDER WHILE DISPOSING OFF THE APPEAL, HOWEVER, INADVERTENTLY THE SAID ADDITIONAL GROUND OF APPEAL RELATING TO SELECTION OF THE OVERSEAS AE AS THE TESTED PARTY HAD REMAINED OMITTED TO BE ADJUDICATED UPON. 4. THE LD. A.R FURTHER SUBMITTED THAT CE RTAIN OTHER ADDITIONAL GROUNDS OF APPEAL I.E GROUND S OF APPEAL NO S . 3 1 TO 34 VIS - A - VIS CERTAIN NON - T.P ISSUES WERE ALSO RAISED BY THE ASSESSEE, WITH A REQUEST THAT PROPER DIRECTION S AS REGARDS THE SAME MAY BE GIVEN TO THE LOWER AUTHORITIES . IT WAS SUBMI TTED BY THE LD. A.R THAT INADVERTENTLY THE AFORESAID GROUNDS OF APPEAL ALSO HAD REMAINED OMITTED TO BE ADJUDICATED. 5. THE LD. A.R ON THE BASIS OF HIS AFORESAID CONTENTION SUBMITTED, THAT AS THE NON - ADJUDICATION OF THE AFOREMENTIONED ADDITIONAL GROUNDS OF APPEAL RELATING TO SELECTION OF TESTED PARTY AND OTHER NON - T.P. ISSUES HAD RENDERED THE ORDER OF THE TRIBUNAL AS SUFFERING FROM A MISTAKE WHICH IS GLARING, PATENT, OBVIOUS AND APPARENT FROM RECORD, THUS THE SAME MAY BE RECTIFIED. 6. LASTLY, IT WAS SUBMITTE D BY THE LD. A.R THAT THE TRIBUNAL WHILE ADJUDICATING THE GROUNDS NOS. 21 AND 22 PERTAINING TO DISALLOWANCE OF TV COST/COST OF PRODUCTION FILMS (AT PARA NO. 6 OF THE ORDER), HAD WRONGLY MENTIONED THE ASSESSMENT YEAR AS A.Y 2007 - 08 INSTEAD OF THE RELEVANT ASSESSMENT YEAR I.E A.Y 2008 - 09. THUS, THE LD. A.R SUBMITTED THAT THE AFORESAID MISTAKE MAY ALSO BE RECTIFIED. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) DID NOT CONTROVERT THE AFORESAID SUBMISSIONS RAISED BY THE LD. A.R BEFORE US. 8. 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 P A G E | 4 M.A. NO.377 /MUM/2018 A.Y 2008 - 09 (ARISING OUT OF ITA NO. 7744/MUM/2012) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) CONTENTION OF THE LD. A.R , THAT THE TRIBUNAL WHILE DISPOSING OF F THE AFORESAID APPEAL HAD THOUGH ADMITTED THE ADDITIONAL GROUND OF APPEAL NO. 28 IN RELATION TO THE ISSUE PERTAINING TO SELECTION OF THE TESTED PARTY, HOWEVER, THE SAME THEREAFTER HAD INADVERTENTLY REMAINED OMITTED TO BE ADJUDICATED UPON. RATHER, ON A PERUSAL OF THE ORDER OF THE TRIBUNAL, IT EMERGES THAT THOUGH THE CONTENTION ADVANCED BY THE LD. D.R IN CONTEXT OF THE ISSUE OF SELECTION OF THE TESTED PARTY WAS REFERRED TO BY THE TRIBUNAL AT PAGE 9 - PARA 4.2A OF ITS ORDER , HOWEVER , THE SAME THEREAFTER WAS NOT FOLLOWED BY AN ADJUDICATION OF THE SAME ON MERITS. WE THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS , ARE OF THE CONSIDERED VIEW THAT THE NON - ADJUDICATION OF THE AFORESAID ADDITIONAL GROUND OF APPEAL NO. 28 HA S RENDERED THE ORDER OF THE TRIBUNAL AS SUFFERING FROM A MISTAKE WHICH IS GLARING, PATENT, APPARENT AND OBVIOUS FROM RECORD, MAKING IT AMENABLE FOR RECTIFICATION UNDER SEC. 254(2) OF THE ACT. IN TERMS OF OUR AFORESAID OBSERVATIONS THE ORDER PASSED BY THE TRI BUNAL UNDER SEC. 254(1) IS RECALLED, FOR THE LIMITED PURPOSE OF ADJUDICATING THE ADDITIONAL GROUND NO. 28 . 9. WE FURTHER FIND THAT OTHER ADDITIONAL GROUNDS NOS. 31 TO 34 VIS - A - VIS CERTAIN NON - T.P ISSUES WHICH WERE RAISED BY THE ASSESSEE, WITH A REQUEST T HAT A PROPER DIRECTION AS REGARDS THE SAME MAY BE GIVEN TO THE LOWER AUTHORITIES, HAD ALSO INADVERTENTLY NOT BEING ADJUDICATED UPON BY THE TRIBUNAL WHILE DISPOSING OF F THE AFORESAID APPEAL. WE THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS, BEING OF THE CONS IDERED VIEW THAT NON - ADJUDICATION OF THE AFORESAID ADDITIONAL G ROUND S NO S . 3 1 TO 34 HAS RENDERED THE ORDER PASSED BY THE TRIBUNAL AS SUFFERING FROM A MISTAKE WHICH IS GLARING, PATENT, OBVIOUS AND APPARENT FROM RECORD, THUS RECALL THE ORDER FOR THE LIMITE D EXTENT OF ADJUDICATING THE AFOREMENTIONED ADDITIONAL G ROUND S OF APPEAL NO. 31 TO 34 . 10. WE FURTHER FIND , THAT THE TRIBUNAL WHILE ADJUDICATING THE G ROUND S OF APPEAL NO S . 21 - 22 PERTAINING TO DISALLOWANCE OF TV COST/COST OF PRODUCTION FILMS, HAD AT PAGE 16 PARA NO. 6 WRONGLY MENTIONED A.Y 2007 - 08, INSTEAD OF THE RELEVANT ASSESSMENT YEAR VIZ. A.Y 2008 - 09. WE THUS, TAKING P A G E | 5 M.A. NO.377 /MUM/2018 A.Y 2008 - 09 (ARISING OUT OF ITA NO. 7744/MUM/2012) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) COGNIZANCE OF THE AFORESAID MISTAKE, THEREIN RECTIFY THE SAME. THE MENTION OF THE ASSESSMENT YEAR AT PAGE 16 PARA 6 AS A.Y 2 007 - 08, MAY THEREIN BE READ AS A.Y 2008 - 09 . 11. WE 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 2008 - 09 IN ITA NO. 7744/MUM/2012, VIDE ITS OR DER DATED 21.03.2018, FOR THE LIMITED PURPOSE OF ADJUDICATING THE ADDITIONAL GROUND OF APPEAL NO. 28 AND ADDITIONAL G ROUND S OF APPEAL NO S . 31 TO 34 , WHICH HAD INADVERTENTLY REMAINED OMITTED TO BE ADJUDICATED. FURTHER, IN TERMS OF OUR AFORESAID OBSERVAT IONS THE MENTION OF A.Y 2007 - 08 AT PAGE 16 PARA 6 SHALL HEREINAFTER BE READ AS A.Y 2008 - 09 12. THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRONOUNCED 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 P A G E | 6 M.A. NO.377 /MUM/2018 A.Y 2008 - 09 (ARISING OUT OF ITA NO. 7744/MUM/2012) NIVEA INDIA PVT. LTD. VS. ACIT - 10(3)(1) / 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