Cummins India Ltd., V. Deputy Commissioner of Income-tax,

MA 41/PUN/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5817 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 29-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARVIND SONDHE
• Keywords: Transfer pricing; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / MA NO. 41 /P U N/201 6 (ARISING OUT OF CO NO. 53 /P U N/20 1 4 ) / ASSESSMENT YEAR : 20 0 5 - 06 CUMMINS INDIA LTD., KOTHRUD, PUNE - 411038 PAN : AAACC7258B APPLICANT / V/S. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE RESPONDENT ASSESSEE BY : S /SHRI ARVIND SONDHE & KETAN VED REVENUE BY : SHRI ACHAL SHARMA / DATE OF HEARING : 14 - 07 - 2017 / DATE OF PRONOUNCEMENT : 16 - 0 8 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE SEEKING RECTIFICATION IN THE ORDER OF TRIBUNAL DATED 29 - 01 - 2016 VIDE WHICH ITA NO. 594/PN/2013 OF THE REVENUE AND CROSS OBJECTION NO. 53/PN/2014 BY THE ASSESSEE WERE ADJUDICATED. 2 MA NO. 41/PUN/2016, A.Y. 2005 - 06 2. SHRI ARVIND S ONDHE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE TRIBUNAL IN PARA 38 AT PAGE 20 OF THE ORDER HAS ERRED IN OBSERVING THAT GROUNDS OF APPEAL NO. 2, 3 AND 5 OF THE CROSS OBJECTIONS WERE NOT PRESSED. THE GROUND NO. 2 RAISED BY ASSESSEE IN CROSS OBJECTIONS IS CONNECTED WITH GROUND NOS. 2 AND 3 RAISED BY REVENUE IN ITS APPEAL. THE AR OF THE ASSESSEE WHILE MAKING SUBMISSIONS IN RESPECT OF GROUND NOS. 2 AND 3 OF THE APPEAL HAD ALSO MADE SUBMISSIONS IN RESPECT OF GROUND NO. 2 OF CROSS OBJECTIONS. TH E TRIBUNAL IN PARA 29 OF THE ORDER DECIDED THE ISSUE RAISED IN GROUND NOS. 2 AND 3 OF APPEAL BY REVENUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE/APPLICANT. THE TRIBUNAL IN PARA 29 HAS ALSO OBSERVED THAT SINCE, THE GROUNDS RAISED BY REVENUE ARE DI SMISSED UPHOLDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE OF NET MARGIN , THE OTHER ARGUMENTS OF THE ASSESSEE ARE NOT CONSIDERED BEING ACADEMIC IN NATURE. IN VIEW OF AFORESAID OBSERVATION S MADE BY THE TRIBUNAL IN PARA 29 , THE SUBSEQU ENT FINDINGS OF TRIBUNAL IN PARA 38 IN RESPECT OF GROUND NO. 2 RAISED IN CROSS OBJECTIONS REQUIRE RECTIFICATION. THE ARGUMENTS ADVANCED BY AR OF THE ASSESSEE IN RESPECT OF THE ISSUE RAISED IN GROUND NOS. 2 AND 3 OF THE APPEAL BY REVENUE AND GROUND NO. 2 O F THE CROSS OBJECTIONS BY THE ASSESSEE ARE RECORDED IN PARAS 26 AND 27 AT PAGES 15 AND 16 OF THE ORDER. 2.1 THE LD. AR OF THE ASSESSEE/APPLICANT FURTHER SUBMITTED THAT DURING THE COURSE OF HEARING OF APPEAL , THE AR OF THE ASSESSEE HAD ALSO MADE SUBMISSI ONS IN RESPECT OF GROUND NO. 3 .1 RAISED IN CROSS OBJECTIONS RELATING TO PROCUREMENT SUPPORT SERVICES. IT WAS ARGUED THAT 3 MA NO. 41/PUN/2016, A.Y. 2005 - 06 THE PROCUREMENT SUPPORT SERVICES OUGHT TO BE AGGREGATED WITH MANUFACTURING FUNCTION UNDER TRANSACTIONAL NET MARGIN METHOD (TNMM) SINCE , THE SERVICES ARE CLOSELY LINKED TO THE MAIN ACTIVITY OF MANUFACTURING. THE AR OF THE ASSESSEE HAD ALSO RELIED ON THE DECISIONS SUBMITTED AS PART OF LEGAL COMPILATION. HOWEVER, THE TRIBUNAL WHILE DISPOSING OF CROSS OBJECTIONS OF THE ASSESSEE HAD MENTION ED THAT GROUND NO. 3 IS NOT PRESSED. THE LD. AR POINTED THAT ADMITTEDLY THE SUBMISSIONS WERE MADE IN RESPECT OF GROUND NO. 3.1 ONLY AND NO SUBMISSIONS WERE MADE IN RESPECT OF GROUND NO. 3.2 AND 3.3. THE LD. AR PRAYED FOR RECTIF YING THE ERROR IN PARA 38 O F THE ORDER OF TRIBUNAL DATED 29 - 01 - 2016. 3. SHRI ACHAL SHARMA REPRESENTING THE DEPARTMENT FAIRLY ADMITTED THAT THE GROUND NOS. 2 AND 3 RAISED BY REVENUE IN ITS APPEAL AND GROUND NO. 2 RAISED IN CROSS OBJECTIONS ARE CONNECTED. THE LD. DR SUBMITTED THAT THE REVENUE HAS NO OBJECTION IF THE RECTIFICATION AS PROPOSED BY THE LD. AR OF THE ASSESSEE IS CARRIED OUT. 4. BOTH SIDES HEARD. IT SEEMS THAT THE ERROR HAS CREPT IN PARA 38 OF THE ORDER OF TRIBUNAL DATED 29 - 01 - 2016. A PERUSAL OF THE GROUNDS RAISED B Y REVENUE IN ITS APPEAL AND THE GROUNDS RAISED IN THE CROSS OBJECTIONS BY ASSESSEE REVEAL THAT ISSUE RAISED IN GROUND NOS. 2 AND 3 IN THE APPEAL BY REVENUE AND THE GROUND NO. 2 RAISED IN THE CROSS OBJECTIONS BY THE ASSESSEE ARE INTERRELATED. THE AR OF THE ASSESSEE HAS MADE SUBMISSIONS IN RESPECT OF THE GROUND NOS. 2 AND 3 RAISED BY REVENUE IN ITS APPEAL. THE TRIBUNAL WHILE CONCLUDING ITS FINDINGS ON 4 MA NO. 41/PUN/2016, A.Y. 2005 - 06 GROUND NOS. 2 AND 3 RAISED IN THE APPEAL BY THE REVENUE HAS OBSERVED THAT THE OTHER ARGUMENTS RAISED BY ASS ESSEE ARE NOT CONSIDERED BEING ACADEMIC IN NATURE. ACCORDINGLY, THE OBSERVATIONS OF TRIBUNAL THAT GROUND NO. 2 OF THE CROSS OBJECTIONS IS NOT PRESSED NEEDS TO BE CORRECTED AS, GROUND NO. 2 OF THE CROSS OBJECTIONS REQUIRE NO ADJUDICATION BEING ACADEMIC IN NATURE . 5. SIMILARLY, IN RESPECT OF GROUND NO. 3.1 RAISED IN CROSS OBJECTIONS , THE OBSERVATION OF TRIBUNAL THAT THE GROUND NO. 3 IS NOT PRESSED NEEDS REQUIRES CORRECTION AS, GROUND NO. 3.1 OF THE CROSS OBJECTIONS REQUIRE NO ADJUDICATION BEING ACADEMI C IN NATURE. 6. IN VIEW OF ABOVE CORRECTIONS CARRIED OUT IN PARA 38 AT PAGE 20 OF THE ORDER, CORRECTED PARA 38 BE READ AS UNDER : 38. GROUNDS NO. 2 AND 3.1 OF THE CO REQUIRE NO ADJUDICATION BEING ACADEMIC IN NATURE. GROUND S NO. 3.2, 3.3 AND 5 OF THE CO WERE NOT PRESSED BY LD. AUTHORISED REPRESENTATIVE. GROUNDS OF APPEAL NO . 6 AND 7 BEING GENERAL ARE DISMISSED. THUS, WE ARE LEFT WITH ONLY G ROUND OF APPEAL NO. 4 WHICH RELATES THE ORDER OF THE C IT(A) IN CONFIRMING THE ADJUSTMENT OF RS.78,72,507/ - TO THE VALUE OF INTERNATIONAL TRANSACTIONS IN RESPECT OF EXPORT OF IC ENGINES BY THE LHP DIVISION. 7 . HOWEVER, WITH TH ESE CORRECTIONS THERE WOULD BE NO CHANGE IN THE FINAL RESULT OF THE APPEAL AND THE CROSS OBJECTIONS. 5 MA NO. 41/PUN/2016, A.Y. 2005 - 06 8. IN VIEW OF THE CORRECTION S MADE IN ORDER OF TRIBUNAL DATED 29 - 01 - 2016 , THE MISCELLANEOUS APPLICATION BY THE ASSESSEE /APPLICANT IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 16 TH DAY OF AUGUST, 2017 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 16 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT . 2. / THE RESPONDENT . 3. ( ) / THE CIT (A) - IT/TP, PUNE 4. THE DIT, TRANSFER PRICING, PUNE 5 . , , , / DR, ITAT, A BENCH, PUNE . 6 . / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE