Value Labs Technologies , Ranga Reddy V. Asst. Commissioner of Income Tax, Circle-8(1), Hyderabad

MA 84/Hyd/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9780 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 13-09-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 11-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Transfer pricing; International transaction; Set aside

Judgement Text

MA NOS 84 AND 66 OF 2019 VALUE LABS TECHNOLOGY HYD ERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER MA NOS.84 & 66/HYD/2019 (ARISING OUT OF ITA NOS.1921/HYD/2018 & 1919/HYD/20 17) ASSESSMENT YEARS: 2014-15 & 2013-14 VALUE LABS TECHNOLOGIES HYDERABAD PAN:AAIFV6716G VS. INCOME TAX OFFICER WARD 8(1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI P. MURALI MOHAN RAO REVENUE BY : SRI Y.V.S.T. SAI, CIT-DR DATE OF HEARING: 13/09/2019 DATE OF PRONOUNCEMENT: 20/09/2019 ORDER PER SMT. P. MADHAVI DEVI, J.M. THESE MISCELLANEOUS APPLICATIONS ARE FILED BY THE ASSESSEE FOR THE RECTIFICATION OF ALLEGED MISTAKES IN THE ORDER OF THE TRIBUNAL FOR THE A.YS 2013-14 & 2014-15 RESPECT IVELY. 2. IN M.A. NO.66/HYD/2019, THE ASSESSEE HAS SUBMITT ED THAT ONE OF THE ISSUES IN THE APPEAL IS REGARDING A RMS LENGTH ADJUSTMENT OF RS.17,71,128/- TOWARDS INTEREST ON O UTSTANDING RECEIVABLES FROM THE ASSOCIATED ENTERPRISES, AGAIN ST WHICH THE ASSESSEE HAD PLACED ADDITIONAL GROUNDS OF APPEAL NO S. 5 & 6. IT IS SUBMITTED THAT THE TRIBUNAL HAS NOT ADJUDICATED THE SE GROUNDS AND THEREFORE, THERE IS A MISTAKE APPARENT FROM THE RECORD WHICH MA NOS 84 AND 66 OF 2019 VALUE LABS TECHNOLOGY HYD ERABAD. PAGE 2 OF 4 NEEDS RECTIFICATION BY RECALL OF THE ORDER OF THE T RIBUNAL TO ADJUDICATE THESE GROUNDS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED IN F AVOUR OF THE M.A. WHILE THE LEARNED DR OPPOSED THE M.A.S STATING THAT THE TRIBUNAL HAS ALREADY SET ASIDE THE ISSUE TO THE FILE OF THE AO/TPO TO CONSIDER THE INDUSTRY AVERAGE OF INTEREST ON RECEIVABLES AND IF THE COLLECTIONS DURING THE YEAR ARE WITHIN THE INDUSTRY AVERAGE, THEY SHOULD BE ALLOWED AND ONLY S UCH OF THE COLLECTIONS BEYOND THE INDUSTRIAL AVERAGE, SHOULD B E CHARGED WITH INTEREST BASED ON THE RATE OF LIBOR SINCE IT IS AN INTERNATIONAL TRANSACTION. HE, THEREFORE, SUBMITTED THAT THE TRIB UNAL HAS ALREADY CONSIDERED THIS ISSUE AND THERE WAS NO MIST AKE APPARENT FROM THE RECORD WHICH NEEDS ANY RECTIFICATION U/S 2 54(2) OF THE ACT. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT ONE OF THE ISSUES IN THE AP PEAL WAS THE ALP ADJUSTMENT ON INTEREST ON RECEIVABLES. THE TR IBUNAL HAS CONSIDERED AND HELD THAT IT IS AN INTERNATIONAL TRA NSACTION WHICH NEEDS TP ADJUSTMENT. THEREAFTER, THE TRIBUNAL HAS S ET ASIDE THE ISSUE TO THE FILE OF THE TPO TO CALCULATE THE AVERA GE COLLECTION PERIOD OF THE INDUSTRY AND ALSO TO CHARGE INTEREST ONLY ON THE PERIOD BEYOND THE INDUSTRIAL AVERAGE. WE FIND THAT THE ASSESSEE HAD RAISED ADDITIONAL GROUNDS OF APPEAL VIDE LETTER DATED 6.9.2018 AND IS PART OF THE RECORD IN WHICH THE ASSESSEE IS RAISING A GROUND THAT IT IS A DEBT FREE COMPANY AND THAT NO BORROWED FUNDS WERE UTILIZED TO PASS ON THE FACILITY TO ITS AE. HOWEVER , THE TRIBUNAL, INADVERTENTLY MISSED TO CONSIDER AND DECIDE ON THE ADMISSIBILITY OF THE ADDITIONAL GROUNDS AND IF THEY WERE TO BE AD MITTED, TO MA NOS 84 AND 66 OF 2019 VALUE LABS TECHNOLOGY HYD ERABAD. PAGE 3 OF 4 CONSIDER THE MERITS OF THE ADDITIONAL GROUNDS OF AP PEAL FILED BY THE ASSESSEE. IF THESE GROUNDS ARE ADMITTED AND ALL OWED, THEN THE CONSEQUENCES/RESULT OF SUCH DECISION WOULD HAVE AN IMPACT ON THE DECISION ALREADY TAKEN BY THE TRIBUNAL. THEREFO RE, THESE GROUNDS MAY NEED ADJUDICATION BY THE TRIBUNAL. THER EFORE, WE ARE OF THE OPINION THAT THERE IS A MISTAKE APPARENT FRO M THE RECORD WHICH NEEDS RECTIFICATION. THEREFORE, WE RECALL THE ORDER OF THE TRIBUNAL IN ITA NO.1919/HYD/2017 ONLY FOR ADJUDICAT ING THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE AS GROUNDS 5 & 6 RESPECTIVELY. M.A. IN 66/HYD/2019 IS ACCORDINGL Y ALLOWED. 5. IN M.A. 84/HYD/2019 FOR THE A.Y 2014-15, THE CAS E OF THE ASSESSEE IS THAT WHILE DISPOSING OF THE ISSUE R ELATING TO ALP ADJUSTMENT TOWARDS INTEREST ON OUTSTANDING RECEIVA BLES, THE ASSESSEES GROUNDS IN APPEAL NO.2.1 HAS NOT BEEN AD JUDICATED. THEREFORE, THERE IS A MISTAKE APPARENT FROM RECORD WHICH NEEDS RECTIFICATION. ON GOING THROUGH THE ORDER OF THE TR IBUNAL, WE FIND THAT FOR THE A.Y 2014-15, WE HAVE FOLLOWED THE DECI SION OF THE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y 2013-14 AND HAVE REMANDED THE MATTER TO THE FILE OF THE AO FOR CALCU LATING THE INDUSTRIAL AVERAGE PERIOD OF COLLECTION AND DIRECTE D THE AO NOT TO CHARGE INTEREST IF THE RECEIVABLES WERE COLLECTED W ITHIN THE INDUSTRIAL AVERAGE PERIOD. WE FIND THAT WE HAVE NOT ADJUDICATED THE SPECIFIC GROUND RAISED BY THE ASSESSEE IN GROUN D NO.2.1 WHICH ARE SIMILAR TO THE ADDITIONAL GROUNDS 5 AND 6 RAISED BY THE ASSESSEE FOR THE A.Y 2013-14. THEREFORE, WE DEEM IT FIT AND PROPER TO RECALL THE ORDER OF THE TRIBUNAL DATED 12-06-201 9 ONLY FOR ADJUDICATION OF GROUND NO.2.1 RAISED BY THE ASSESSE E IN THE APPEAL. M.A. IS ACCORDINGLY ALLOWED. MA NOS 84 AND 66 OF 2019 VALUE LABS TECHNOLOGY HYD ERABAD. PAGE 4 OF 4 6. IN THE RESULT, BOTH THE M.AS FILED BY THE ASSESS EE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH SEPTEMBER, 2019. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 20 TH SEPTEMBER, 2019. VINODAN/SPS COPY TO: 1 M/S. VALUE LABS TECHNOLOGIES C/O P. MURALI & CO. C.AS 6-3- 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500082 2 ITO WARD 8(1) HYDERABAD 3 DRP-1 BANGALORE 4 PR. CIT 2 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER