M/s Rittal India Pvt Ltd , Doddaballapur V. Assistant Commissioner of Income Tax, Circle-2, LTU , Bangalore

SA 255/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6124 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 24-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SREENANDINI DAS
• Assessee Lawyers: S RAMASUBRAMANIAN
• Keywords: Transfer pricing; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, B ENGALURU BEFORE S HRI N.V.VASUDEVAN , VICE PRESIDENT AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER STAY PETITION NO.255/BANG/2018 (IN I T (TP) A NO. 2868 / BANG/2 0 1 8 ) (ASSESSMENT YEAR: 201 4 - 15 ) M/S. R ITTAL INDIA PVT . LTD. NO.23 & 24, KIADB INDUSTRIAL AREA, VEERAPURA, DODDABALLAPUR - 561203. PAN : AAACR 7927A VS. PETITIONER ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 2/LTU, BENGALURU. RESPONDENT PETITIONER BY : SHRI S.RAMASUBRAMANIAN, CA. RESPONDE NT BY : SMT. SREENANDINI DAS, ADDL.CIT(DR) DATE OF HEARING : 02/11/2018 DATE OF PRONOUNCEMENT : 02 /11/2018 O R D E R PER INTURI RAMA RAO, A M : THIS IS A STAY PETITION FILED BY THE ASSESSEE - COMPANY SEEKING GRANT OF STAY OF OUTSTANDING DEMAND OF RS.14,59,84,694/ - FOR THE ASSESSMENT YEAR 2014 - 15. IT IS STATED IN THE SAID PETITION THAT THE DEMAND IN QUESTION HAD ARISEN ON ACCOUNT OF ARM S LENGTH PRICE (ALP) ADJUSTMENT IN RESPECT OF INTERNATIONAL TRANSACTIONS OF RS.29,60,30,584/ - . IT IS SUBMITTED T HAT THE TRANSFER PRICING OFFICER (TPO) HAD CHOSEN COMPARABLES WHICH ARE NOT COMPARABLE WITH THAT OF THE ASSESSEE - COMPANY. IT IS URGED BEFORE US THAT TRANSFER PRICING ADJUSTMENTS SHOULD BE CONFINED ONLY TO INTERNATIONAL TRANSACTION WHEREAS TPO HAD MADE TP ADJUSTMENT EVEN IN RESPECT OF NON - AE TRANSACTIONS. THUS IT WAS SUBMITTED THAT THE ASSESSEE - COMPANY HAS SP NO . 255 /BANG/20 18 PAGE 2 OF 3 A STRONG PRIMA FACIE CASE IN ITS FAVOUR AND THEREFORE, THE DEMAND MAY BE STAYED. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPO SED THE SAID PETITION AND SUBMITTED THAT TPO AS WELL AS ASSESSEE - COMPANY ADOPTED TNMM. UNDER TNMM, ADJUSTMENT AT ENTITY LEVEL IS MADE AND THEREFORE, VERIFICATION OF TRANSACTION WITH AE AND NON - AE IS NOT PERMISSIBLE. THEREFORE, LEARNED DEPARTMENTAL REPRESE NTATIVE MADE A VEHEMENT PLEA THAT THE ASSESSEE - COMPANY BE DIRECTED TO PAY AT LEAST 50% OF THE DISPUTED TAX DEMAND. 2. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE DEMAND IN QUESTION HAD ARISEN ON ACCOUNT OF ALP ADJUSTMENT IN RESPECT OF INTERNATIONAL TRANSACTION OF RS.29,60,30,584/ - . THE MAIN CONTENTION BY THE LEARNED AR OF THE PETITIONER IS THAT ALP ADJUSTMENT SHOULD BE RESTRICTED TO INTERNATIONAL TRANSACTION WITH ITS AE. WE FIND FROM THE PERUSAL OF THE ORDERS OF THE LOWER AUTHORITI ES THAT THIS CONTENTION WAS NOT RAISED BEFORE THE TPO , T HOUGH THIS CONTENTION WAS RAISED BEFORE THE HON BLE HON'BLE DRP, WE FIND NO DETAILS OF SEGMENTS OF AE AND NON - AE TRANSACTIONS. FURTHER, THE ASSESSEE - COMPANY HAD NOT SHOWN ANY AUTHORITY THAT EVEN UND ER TNMM ALP ADJUSTMENT SHOULD BE RESTRICTED TO AES ONLY NOR THE APPELLANT CONTESTED THE APPLICABILITY OF TNMM METHOD. THUS, IT CANNOT BE SAID THAT THERE IS A PRIMA FACIE CASE IN FAVOUR OF THE ASSESSEE - COMPANY . MOREOVER NO FINANCIAL STATEMENTS HA D BEEN FI LED BEFORE US ESTABLISHING FINANCIAL HARDSHIP TO THE ASSESSEE - COMPANY. IN THE ABSENCE OF EXISTENCE OF PRIMA FACIE CASE AND FINANCIAL HARDSHIP, WE FIND NO REASON TO STAY THE DEMAND. ACCORDINGLY, THE STAY PETITION FILED BY THE ASSESSEE IS DISMISSED. ORDE R PRONOUNCED IN THE OPEN COURT ON 02 ND NOVEMBER 2018 SD/ - SD/ - (N.V.VASUDEVAN) ( INTURI RAMA RAO) VICE PRESIDENT ACCOUNTANT M EMBER PLACE : BENGALURU. D A T E D : 02 / 1 1 /201 8 SRINIVASULU, SPS SP NO . 255 /BANG/20 18 PAGE 3 OF 3 COPY TO : 1 PETITIONER 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE