Elica Pb India Private Limited, Pune V. Deputy Commissioner of Income-tax, Circle - 1(2), Pune

SA 7/PUN/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0589 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 18 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: 06-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Transfer pricing; International transaction; Application of stay
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / SA NO . 7 /PUN/201 9 (ARISING OUT OF ITA NO . 1 697 /PUN/201 8 ) / ASSESSMENT YEAR : 20 1 4 - 15 ELICA PB INDIA PRIVATE LIMITED, 37/1/1, KONDHWA PISOLI ROAD, TAL. - HAVELI, PUNE 411060 PAN : AACCE3614M ....... / APP LICANT / V S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1 (2), PUNE / RESPONDENT ASSESSEE BY : S HRI DARPAN KRIPLANI REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 0 8 - 03 - 2019 / DATE OF PRONOUNCEMENT : 08 - 03 - 2019 / ORDER PER VIKAS AWASTHY, JM : THIS APPLICATION HAS BEEN FILED BY THE ASSESSEE FOR STAY OF RECOVERY OF OUTSTANDING DEMAND RS. 2,78,70,330/ - (INCLUDING INTEREST) ARISING IN ASSESSMENT YEAR 20 1 4 - 15 . 2 SA NO.7/PUN/2019, A.Y. 2014 - 15 2. SHRI DARPAN KRIPLANI APPEARING ON BEHALF OF THE ASSESSEE /PETITIONER SUBMITTED THAT THE DEMAND HAS BEEN RAISED IN THE ASSESSMENT YEAR FOR THE REASON THAT THE TRANSFER PRICING OFFICER (TPO) HAS MADE ADJUSTMENT OF RS.7,78,49,035/ - BY TAKING INTO CONSIDERATION THE ENTIRE TRANSACTIONS INCLUDING TRANSACTIONS WITH NON ASSOCIATED ENTERPRISES (AES). THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. THYSSEN KRUPP INDUSTRIES INDIA PVT. LTD. IN INCOME TAX APPEAL NO. 220 1 OF 2013 DECIDED ON 02 - 12 - 2015 HELD THAT THE TRANSFER PRI CING (TP) ADJUSTMENT IS MANDATED ONLY IN RESPECT OF INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSESSEE AND NOT TRANSACTIONS WITH THE INDEPENDENT UNRELATED PARTIES. SIMILAR VIEW WAS TAKEN BY THE HONBLE BOMBAY HIGH COURT IN VARIOUS OTHER DECISIONS AND VARIOUS BENCHES OF TRIBUNAL ARE CONSISTENTLY FOLLOWING THE SAME. THE LD. AR POINTED THAT THE ASSESSEE IN ITS RETURN HAS DECLARED A LOSS OF RS.2,16,96,798/ - . IF THE TP ADJUSTMENT IS RESTRICTED TO ONLY INTERNATIONAL TRANSACTIONS THE TOTAL TP ADJUSTMENT WO ULD BE RESTRICTED TO RS.66,64,392/ - WHICH WOULD BE SUBSUMED IN THE LOSS ES AND HENCE , THERE WOULD BE NO DEMAND. 3. SHRI M.K. VERMA REPRESENTING THE DEPARTMENT HAS FILED COMMENTS FROM THE ASSESSING OFFICER ON THE ISSUE , OPPOSING STAY APPLICATION FILED BY THE ASSESSEE/PETITIONER. A PERUSAL OF COMMENTS REVEA L THAT AS REGARDS THE ADJUSTMENT AT ENTITY LEVEL, IT HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER, THE ONLY REASON FOR OPPOSING STAY APPLICATION IS THAT THE DEPARTMENT HAS NOT ACCEPTED THE VIEW OF REST RICTING THE TP ADJUSTMENT TO INTERNATIONAL TRANSACTIONS WITH RELATED PARTIES . THE DEPARTMENT HAS PROPOSED SLP IN ONE OF SUCH CASES I.E. COMMISSIONER OF INCOME TAX VS. 3 SA NO.7/PUN/2019, A.Y. 2014 - 15 M/S. FIRESTONE INTERNATIONAL (P) LTD. (378 ITR 558) ADJUDICATED BY THE HONBLE BOMBAY HIGH COURT AGAINST THE DEPARTMENT AND SLP IS PROPOSED IN ANOTHER SIMILAR CASE ADJUDICATED BY HONBLE BOMBAY HIGH COURT I.E. PETRO ARALDITE PVT. LTD. 4. BOTH SIDES HEARD. THE ASSESSEE IS IN APPEAL AGAINST TP ADJUSTMENT MADE ON TOTAL TURNOVER RATHER THA N RESTRICTING THE ADJUSTMENT TO INTERNATIONAL TRANSACTIONS WITH RELATED PARTIES. PRIMA FACIE IT APPEARS THAT THE ISSUE HAS BEEN SETTLED IN FAVOUR OF ASSESSEE IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. THYSSEN KRUPP INDUSTRIES INDIA PVT. LTD. (SUPR A). TAKING INTO CONSIDERATION ENTIRETY OF FACTS, WE ARE OF CONSIDERED VIEW THAT THE RECOVERY OF OUTSTANDING DEMAND DESERVE S TO BE STAYED , SUBJECT TO FOLLOWING CONDITIONS : (I). THAT THE ASSESSEE SHALL NOT SEEK FRIVOLOUS ADJOURNMENT S . IF THE ASSESSEE DESI RES TO FILE A PAPER BOOK, THEN THE SAME SHOULD BE SUBMITTED IN ACCORDANCE WITH ITAT RULES BEFORE THE DATE OF HEARING OF APPEAL. (II). IN CASE OF BREACH OF ANY OF THE ABOVE CONDITION, THE STAY GRANTED SHALL AUTOMATICALLY GET VACATED AND THE ASSESSEE SHALL ALSO LOOSE THE BENEFIT OF EARLY HEARING OF APPEAL. 5. SUBJECT TO FULFILLMENT OF ABOVE CONDITIONS, THE 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. 4 SA NO.7/PUN/2019, A.Y. 2014 - 15 6. THE APPEAL IS FIXED FOR HEARING ON 08 - 05 - 2019. SINCE, THE DATE OF HEARING OF APPEAL HAS BEEN PRONOUNCED IN OPEN COURT, ISSUANCE OF SEPARATE NOTICE OF HEARING TO THE PARTIES IS DISPENSED WITH. 7. IN THE RESULT, THE STAY APPLICATION FILED BY ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT AFTER HEARING OF THE STAY APPLICATION ON FRIDAY, THE 8 TH DAY OF MARCH, 2019 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 8 TH MARCH, 201 9 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE DISPUTE RESOLUTION PANEL - 3, MUMBAI 4 . , , , / DR, ITAT, A BENCH, PUNE. 5 . / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE