Emerson Climate Technologies (India) Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 1(2), Pune

SA 117/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0582 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 09-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHEI
• Assessee Lawyers: DANESH BAFNA
• Keywords: Transfer pricing; International transaction; Application of stay; Wholly owned subsidiary
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / SA NO . 117 /PUN/201 8 (ARISING OUT OF ITA NO . 1714 /PUN/201 8 ) / ASSESSMENT YEAR : 20 1 4 - 15 EMERSON CLIMATE TECHNOLOGIES (INDIA) PVT. LTD., PLOT NO. 23, RAJIV GANDHI INFOTECH PARK, PHASE II, HINJEWADI, PUNE 411057 PAN : AAACK7291C ....... / APP LICANT / V S. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(2), PUNE / RESPONDENT ASSESSEE BY : SHRI DANESH BAFNA REVENUE BY : SHRI SANJEEV GHEI / DATE OF HEARING : 16 - 11 - 2018 / DATE OF PRONOUNCEMENT : 16 - 11 - 2018 / ORDER PER VIKAS AWASTHY, JM : TH IS PETITION HAS BEEN FILED BY THE ASSESSEE FOR STAY OF RECOVERY OF OUTSTANDING DEMAND ARISING IN ASSESSMENT YEAR 20 1 4 - 15 . 2 SA NO. 117/PUN/2018, A.Y. 2014 - 15 2. SHRI DANESH BAFNA APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A 100% SUBSIDIARY OF COPELAND CORPORATION, USA. DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE ENTERED INTO VARIOUS INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES (AES). THE T RANSFER PRICING OFFICER (TPO) DETERMINED THE ARMS LENGTH PRICE (ALP) OF THE INTERNATIONAL TRANSACTIONS PERTAINING TO PAYMENT OF FEES FOR ADVISORY AND OTHER SERVICES BY THE ASSESSEE TO ITS AES AS NIL AND THUS, MADE TP ADJUSTMENT OF RS.13,74,20,445/ - . THE LD. AR POINTED THAT A PERUSAL OF DIRECTIONS OF DISPUTE RESOLUTION PANEL (DRP) DATED 29 - 08 - 2012 WOULD SHOW THAT THE TPO WHILE MAKING THE AFORESAID ADJUSTMENT RELIED ON THE DIRECTIONS OF DRP IN ASSESSMENT YEAR 2013 - 14. 2.1 THE LD. AR SUBMITTED THAT THE IS SUE RAISED BY THE ASSESSEE IN PRESENT APPEAL IN RESPECT OF PAYMENT OF FEES FOR ADVISORY AND OTHER SERVICES TO AES BY THE ASSESSEE IS RECURRING SINCE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE ASSAILED THE FINDINGS OF DRP AND ASSESSING OFFICER BEFORE THE TRIBUN AL IN ITA NO. 2182/PUN/2013 FOR ASSESSMENT YEAR 2009 - 10. THE TRIBUNAL ADJUDICATED THE ISSUE IN FAVOUR OF ASSESSEE. THEREAFTER, IN ASSESSMENT YEARS 2010 - 11 AND 2013 - 14 SIMILAR ADJUSTMENT WAS MADE BY THE TPO. THE ISSUE TRAVELLED TO THE TRIBUNAL. THE TRIB UNAL FOLLOWING ITS EARLIER ORDER IN ITA NO. 2182/PUN/2013 (SUPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. HENCE, THE BASIS FOR MAKING THE ADJUSTMENT BY TPO I.E. THE DIRECTIONS OF DRP IN ASSESSMENT YEAR 2013 - 14 HAS ALREADY BEEN REVERSED BY THE TRIBUNA L. 3. SHRI SANJEEV GHEI REPRESENTING THE DEPARTMENT VEHEMENTLY OPPOSED THE STAY APPLICATION. 3 SA NO. 117/PUN/2018, A.Y. 2014 - 15 4. BOTH SIDES HEARD. A CLOSE EXAMINATION OF THE GROUNDS OF APPEAL IN ASSESSMENT YEAR 2014 - 15 AN D THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 2009 - 10 IN ITA NO. 2182/PUN/2013 (SUPRA) PRIMA - FACIE SHOWS THAT THE ISSUE RAISED IN THE PRESENT APPEAL BY THE ASSESSEE IS IDENTICAL TO THE ISSUE ALREADY ADJUDICATED BY THE CO - ORDINATE BENCH O F TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009 - 10. AGAIN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE APPEAL BY THE ASSESSEE IN ITA NO. 2432/PUN/2017 FOR ASSESSMENT YEAR 2013 - 14 DECIDED ON 06 - 06 - 2018. 5. TAKING INTO CONSIDERATION PRIMA - FACIE FACTS OF THE CASE AND BALANCE OF CONVENIENCE, T HE RECOVERY OF OUTSTANDING DEMAND IN THE ASSESSMENT YEAR UNDER APPEAL IS STAYED SUBJECT TO FOLLOWING CONDITIONS : (I). THAT THE ASSESSEE SHALL NOT SEEK FRIVOLOUS ADJOURNMENT. (II). I F THE ASSESSEE DESIRES TO FILE A PAPER BOOK, THEN THE SAME SHOULD BE SUBMITTED IN ACCORDANCE WITH ITAT RULES BEFORE THE DATE OF HEARING OF APPEAL. (I II ). THAT AN EARLY HEARING IS HEREBY GRANTED AND THE APPEAL IS DIRECTED TO BE FIXED FOR HEARING ON 30 - 01 - 2019. SINCE, THE DATE OF HEARING IS PRONOUNCED IN THE OPEN COURT, ISSUANCE OF SEPARATE NOTICE OF HEARING TO THE PARTIES IS DISPENSED WITH. ( I V). IN CASE OF BREACH OF ANY OF THE ABOVE CONDITIONS, THE STAY GRANTED SHALL AUTOMATICALLY GET VACATED AND THE ASSESSEE SHALL ALSO LOOSE THE BENEFIT OF EARLY HEARING OF APPEAL. 4 SA NO. 117/PUN/2018, A.Y. 2014 - 15 6 . SUBJECT TO THE FULFILLMENT OF ABOVE CONDITIONS, THE RECOVERY OF OUTSTANDING DEMAND IS STAYED FOR A PERIOD OF 180 DAYS FROM THE DATE OF THIS ORDER OR TILL THE DISPOSAL OF APPEAL, WHICHEVER IS EARLIER. 7. IN THE RESULT, THE STAY APPLICATION FILED BY ASSESSEE IS ALLOWED IN THE TERMS AFORESAID ORDER PRONOUNCED IN OPEN COURT AFTER HEARING OF THE STAY APPLICATION ON FRIDAY, THE 16 TH DAY OF NOVEMBER, 2018. SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 16 TH NOVEMBER, 2018. RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE DISPUTE RESOLUTION PANEL 3, MUMBAI 4. THE PR. CIT - I, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE