GLENMARK PHARMACEUTICALS LTD, MUMBAI V. AST CIT (LTU) 2, MUMBAI

MA 497/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6048 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U R SINGH
• Keywords: Gift; Rectification of order
• Section: 254(2); 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBERAND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER M.A. NO. 497 /MUM./2019 ( ARISING OUT OF ITA NO. 5694 /MUM./201 6 ) ( ASSESSMENT YEAR : 2012 13 ) GLENMARK PHARMACEUTICALS LTD. HDO CORPORATE BUILDING WING A, B, D. SAWANT MARG, CHAKALA OPP. WESTERN EXPRESSS HIGHWAY ANDHERI (E), MUMBAI 400 099 PAN AAACG2207L . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX LARGE TAXPAYER UNIT 2, MUMBAI . RESPONDENT ASSESSEE BY : SHRI ANUJ KISNADWALA REVENUE BY : SHRI U.R. SINGH DATE OF HEARING 15 . 11 .20 19 DATE OF ORDER 14.02.2020 O R D E R PER SAKTIJIT DEY. J.M. B Y TH IS APPLICATION , PURPORTEDLY FILED UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) , THE ASSESSEE SEEKS RECTIFICATION OF ORDER DATED 31 ST JULY 2019, PASSED IN ITA NO.5694/ MUM./2016. 2. THE FIRST MISTAKE, AS POINTED OUT BY THE LEARNED AUTHORISED REPRES ENTATIVE IS, GROUND NO.4, OF ITA NO.4972/MUM./2016, IS 2 GLENMARK PHARMACEUTICALS LTD. IDENTICAL TO GROUND NO.6, OF ITA NO.5694/MUM./2016, AND ON THE COMMON ISSUE OF EXPENDITURE INCURRED ON GIFT, FREEBIES GIVEN TO DOCTORS AND MEDICAL PROFESSIONALS. HE SUBMITTED , WHILE DECIDING THE AFORESAID ISSUE RAISED IN GROUND NO.4, OF ITA NO.4972/MUM./2016 OF REVENUES APPEAL FOR THE ASSESSMENT YEAR 2011 12, THE TRIBUNAL IN PARA 43 OF THE ORDER UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELET ING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. HE SUBMITTED , MOST OF THE ISSUE S IN REVENUE S APPEAL FOR THE ASSE SSMENT YEAR 2011 12 AND 2012 13 ARE IDENTICAL AND WHILE DECIDING REVENUES APPEAL FOR THE ASSESSMENT YEAR 2012 13, THE TRIBUNAL FOLLOWED ITS DECISION ON SUCH I SSUES WHILE DECID ING REVENUES APPEAL FOR THE ASSESSMENT YEAR 2011 12. HOWEVER, HE SUBMITTED , GROUND NO.6, OF REVENUES APPEAL IN ASSESSMENT YEAR 2012 13, WHICH IS IDENTICAL TO GROUND NO.4, OF REVENUES APPEAL IN ASSESSMENT YEAR 2011 12, INADVERTENTLY WAS NOT DECIDED. THUS, HE SUBMITTED , THE DECISION TAKEN BY THE TRIBUNAL WHILE DECIDING THE ISSUE IN THE ASSESSMENT YEAR 2011 12 WOULD SQUARELY APPLY TO THE ISSUE RAISED BY THE REVENUE IN ASSESSMENT YEAR 2012 13. FURTHER, HE SUBMITTED , WHILE DECIDING GROUND NO. 10 OF REVENUE S APPEAL IN ASSESSMENT YEAR 2012 13, THOUGH , THE TRIBUNAL HAS FOLLOWED ITS OWN DECISION WHILE DECIDING SIMILAR ISSUE IN REVENUES APPEAL FOR THE ASSESSMENT YEAR 2011 12, HOWEVER, INADVERTENTLY, THE ARM'S LENGTH PRICE OF COMFORT GUARANTEE FEE HAS BEEN FIXED AT 0.53% INSTEAD OF 0.5%. THUS, HE 3 GLENMARK PHARMACEUTICALS LTD. SUBMITTED , THESE MISTAKES BEING IN THE NATURE OF MISTAKE APPARENT ON THE FACE OF RECORD , MAY BE RECTIFIED. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE LEFT IT TO THE DISCRETION OF THE BENCH. 4. WE HAVE CONSIDERE D RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE ISSUES RAISED BY THE REVENUE IN ITS APPEAL FOR THE ASSESSMENT YEARS 2011 12 AND 2012 13, REGISTERED AS IT NO. 4972/MUM./2016 AND IT(TP)A NO.5694/MUM./2016, ARE MORE OR LE SS IDENTICAL . WHILE DECIDING REVENUES APPEAL FOR THE ASSESSMENT YEAR 2012 13, THE TRIBUNAL HAS MERELY FOLLOWED ITS DECISION IN REVENUES APPEAL FOR THE ASSESSMENT YEAR 2011 12. IT IS OBSERVED , GROUND NO.4, OF REVENUES APPEAL IN THE ASSESSMENT YEAR 2011 12 IS IDENTIC AL TO GROUND NO.6 OF REVENUES APPEAL IN ASSESSMENT YEAR 2012 13 AND ON THE COMMON ISSUE OF DISALLOWANCE OF EXP ENDITURE INCURRED TOWARDS GIFTS AND FREEBIES GIVEN TO DOCTORS AND MEDICAL PROFESSIONALS. WHILE DECIDING THE ISSUE IN THE ASSESSMENT YEAR 2 011 12, THE TRIBUNAL IN PARA 34 OF THE APPEAL ORDE R HAS UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELET ING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. HOWEVER, WHILE DECIDING REVENUES APPEAL FOR THE ASSESSMENT YEAR 2012 13, GROUND NO.6, RAISED ON IDENTICAL ISSUE WAS INADVERTENTLY LEFT UNDECIDED. THIS BEING A MISTAKE APPARENT ON THE FACE OF RECORD, WE PROCEED TO RECTIFY THE SAME BY INSERTING THE 4 GLENMARK PHARMACEUTICALS LTD. FOLLOWING PARAGRAPHS NUMBERED AS PARA 47(I) AND 47(II), AFTER PARAGRAPH NO.47, AT PAGE 20 OF THE APPE AL ORDER. 47(I) GROUND NO.6, IS ON THE ISSUE OF DELETION OF DISALLOWANCE OF ` 20,65,00,000, INCURRED TOWARDS GIFTS, FREEBIES PROVIDED TO DOCTORS AND MEDICAL PROFESSIONALS. 47(II) THIS GROUND IS IDENTICAL TO GROUND NO.4, RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO.4972/MUM./2016. FOLLOWING OUR DECISION IN PARA 34 OF THIS ORDE R, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUND RAISED IS DISMISSED. 5. THE NEXT MISTAKE WHICH REQUIRES RECTIFICATION IS THE RATE AT WHICH THE ARM'S LENGTH PRICE OF COMFORT GUARANTEE FEE IS TO BE COMPUTED. 6. AS COULD BE SEEN FROM THE FACTS ON RECORD, IDENTICAL ISSUE WAS RAISE D BY THE REVENUE IN GROUND NO.9 OF ITS APPEAL BEING ITA NO4972/ MUM./2016, FOR THE ASSESSMENT YEAR 2011 12. WHILE DECIDING THE ISSUE, THE TRIBUNAL IN PARA 41, OF THE ORDER HAS UPHELD THE ARM'S LENGTH PRICE OF COMFORT GUARANTEE FEE @ 0.5%. HOWEVER, WHILE DECIDING THE VERY SAME ISSUE IN REVENUES APPEAL FOR THE ASSESSMENT YEAR 2012 13, IN IT(TP)A NO.5694/MUM./2016, THE TRIBUNAL IN PARA 54 HAS INADVERTENTLY DIRECTED THE ASSESSING OFFICER TO COMPUTE THE ARM'S LENGTH PRICE OF COMFORT GUARANTEE FEE @ 0.53% INSTEAD OF 0.5%. THIS BEING A MISTAKE APPARENT ON THE FACE OF RECORD, HAS TO BE RECTIFIED. THEREFORE, PARA 54, OF THE AP PEAL ORDER IS MODIFIED TO THE EXTENT BY SUBSTITUTING THE RATE OF COMFORT GUARANTEE FEE OF 0.53% WITH 0.5%. 5 GLENMARK PHARMACEUTICALS LTD. 7. IN THE RESULT, MISC. APPLICATION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.02.2020 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMB AI, DATED: 14.02.2020 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI