JOHNSON & JOHNSON LTD., MUMBAI V. ADDL. CIT (LTU), MUMBAI

MA 89/MUM/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4567 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: K
• Assessment Year: 2009-2010
• Appeal Filed On: 22-04-2016
• Court: TRIBUNAL
• Department Lawyers: A K DHONRIA
• Assessee Lawyers: R R VORA
• Keywords: Transfer pricing; International transaction

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER MA NO.89/M/2016 (ARISING OUT OF I.T.A. NO. 829/M/2014) (ASSESSMENT YEAR : 2009 - 2010 ) M/S. JOHNSON & JOHNSON LIMITED, 30 FORJETT STREET, MUMBAI - 400036. / VS. ADDL. CIT - LTU, 29 TH FLOOR, CENTRE NO.1, WORLD TRADE CENTRE, CUFFE PARADE, MUMBAI 400 005. ./ PAN : AAAC0866E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R.R. VORA / RESPONDENT BY : SHRI A.K. DHONRIA, SR. DR / DATE OF HEARING : 29.07.2016 / DATE OF PRONOUNCEMENT : 29.07 .2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS MISCELLANEOUS APPLICATION (MA) IS FILED BY THE ASSESSEE ON 22.4.2016, WHICH AROSE FROM THE ORDER OF THE TRIBUNAL IN I.T.A. NO. 829/M/2014 (AY 2009 - 2010), DATED 7.1.2016. IN THIS MA, ASSESSEE SEEKS TO RECTIFY MINOR INAD VERTENT TYPOGRAPHICAL MISTAKES CREPT IN THE SAID ORDER OF THE TRIBUNAL (SUPRA). 2. BEFORE US, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO PARA 7 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) AND MENTIONED THAT THERE ARE SOME TYPOGRAPHICAL MISTAKES WHICH COULD LEAD TO AMBIGUOUS INTERPRETATIONAL ISSUES IN RESPECT OF THE TRIBUNALS DIRECTIONS AS WELL AS INCONSISTENT WITH THE DISCUSSION AND FINDING GIVEN IN THE EARLIER PARAS OF THE SAID ORDER. 3. AFTER HEARING BOTH THE PAR TIES AND ON PERUSAL OF THE SAID TRIBUNALS ORDER (SUPRA), DATED 7.1.2016, WE FIND SOME RECTIFIABLE TYPOGRAPHICAL MISTAKES IN PARA 7 OF THE SAID ORDER AND AFTER MAKING CORRECTIONS, THE SAID PARA 7 READS AS UNDER: 7. ANOTHER ISSUE CONNECTED TO THE ABOVE ISS UE RELATES TO THE POWERS OF THE AO / TPO IN DE NOVO TP ADJUSTMENT TO THE ENTIRE INTERNATIONAL TRANSACTIONS. IN THIS REGARD, IT IS THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE THAT THE SCOPE OF THE ASSESSMENT SHOULD RESTRICTED TO THE ABOVE ISSUE ONLY AND NOT TO THE OTHER 2 INTERNATIONAL TRANSACTIONS. WE HAVE ALSO CONSIDERED THE ARGUMENTS OF THE LD DR FOR THE REVENUE THAT THE SCOPE OF THE JUDGMENT RELATING TO THE BENCHMARKING OF THE AMP EXPENDITURE SHOULD BE EXTENDED AND EXPLANATION GIVEN BY THE LD COUNS EL FOR THE ASSESSEE. IF THE ASSESSEES EXPLANATION FOR JUSTIFYING THE HUGE AMP EXPENDITURE IS GOING TO TOUCH UPON ALL THE TRANSACTIONS RELATING TO THE INPUT OF THE RAW MATERIAL OF THE ASSESSEE J&J USA, BEING INTER - CONNECTED, THE AO SHOULD HAVE THE POWER TO INVOLVE THE SAID TRANSACTIONS AS WELL IN BENCHMARKING EXERCISE OF THE AMP EXPENDITURE. ON CONSIDERING THE UNDISPUTED FACT THAT THE ASSESSEE OBTAINED CONCESSIONS FROM THE J&J USA, AND AMP EXPENDITURE IS NOT CONTRIBUTING TO THE BRAND DEVELOPMENT, WE A RE OF THE OPINION THAT THE AOS JURISDICTION IN THIS REGARD SHOULD REVOLVE AROUND ALL THE ASSESSEES EXPLANATIONS JUSTIFYING THE AMP EXPENDITURE OF THE ASSESSEE. FURTHER, WE HAVE ALSO CONSIDERED THE REMAND GUIDELINES ISSUED BY THE TRIBUNAL IN THIS REGAR D, IN CONNECTION WITH MANY OTHER CASES PLACED BEFORE US AND FIND THE SAID GUIDELINES SHALL APPLY EQUALLY AND AO SHOULD RESTRICT HIS REMAND JURISDICTION TO THE GUIDELINES ISSUED BY THE TRIBUNAL IN THOSE CASES. ACCORDINGLY, ALL THE GROUNDS RELATING TO THE T P ISSUES ( GROUND NOS. 14 TO 28 ) ARE ALLOWED FOR STATISTICAL PURPOSES . 3. ACCORDINGLY, AO / TPO IS DIRECTED TO SUBSTITUTE PARA 7 OF THE SAID TRIBUNALS ORDER WITH THE ABOVE. 5. IN THE RESULT, MA FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY , 2016. SD/ - SD/ - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 29/7 /2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 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