Income Tax Appellate Tribunal - Mumbai
Virgo Engineers Ltd, Mumbai vs Dcit 15(3)(1), Mumbai on 8 January, 2019
1 ITA.No.3718/Mum/2017 Virgo Engineers Limited आयकर अपीलीय अिधकरण "जे" यायपीठ मुब ं ई म ।
Assessment Year 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL "J" BENCH, MUMBAI माननीय ी महावीर सह, याियक सद य एवं माननीय ी मनोज कु मार अ वाल ,लेखा सद य के सम । BEFORE HON'BLE SHRI MAHAVIR SINGH, JM AND HON'BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./IT(TP)A. No.3718/Mum/2017 (िनधा रणवष / Assessment Year: 2011-12) Virgo Engineers Limited Deputy Commissioner of Income (now merged with Virgo Valves & Tax - 1(3)(2) Controls Pvt Ltd) Aaykar Bhavan बनाम/ 7B, 3rd Floor M.K.Road Sambhava Chambers Vs. Mumbai - 400 020 Sir P.M.Road, Fort Mumbai - 400 001 थायीले खासं ./जीआइआरसं ./PAN/GIR No. AAACV-1586-H (अ पीलाथ /Appellant) : ( थ / Respondent) Assessee by : Hiro Rai, Ld. AR Revenue by : Manish Kumar Singh, Ld. DR सुनवाई की तारीख/ : 02/01/2019 Date of Hearing घोषणा की तारीख / : 08/01/2019 Date of Pronouncement आदे श / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)
1. Aforesaid appeal by assessee for Assessment Year [AY] 2011-12 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-58 [CIT(A)], Mumbai, Appeal No. CIT(A)-58/TR-51/2015-16 dated 09/02/2017. The only issue involved under the appeal is computation of Arm Length Price [ALP] of certain Corporate Guarantee given by 2 ITA.No.3718/Mum/2017 Virgo Engineers Limited Assessment Year 2011-12 assessee for its Associates Enterprises [AE]. Although many grounds have been raised, the only point urged during hearing by Ld. Authorized Representative for assessee [AR], Shri Hiro Rai, is that the ALP of the same should be computed @0.5% in terms of ratio of decision of this Tribunal rendered in Everest Kanto Cylinders Ltd. Vs. DCIT [34 Taxmann.com 19] as affirmed by Hon'ble Bombay High Court on 08/05/2015 [58 Taxmann.com 254].
2. Upon reference u/s 92CA (1), Ld. Additional Commissioner of Income Tax [TPO] noted that the assessee provided Corporate Guarantee [CG] for Rs.13.20 Crores to State Bank of India, Germany Branch for the benefit of its AE namely Virgo Europe S.P.A. Italy [VES]. The guarantee was given on 29/09/2007 and the same continued up-to 16/12/2010. During impugned AY, three more such guarantees were provided by the assessee for the benefit of other AEs as well, the details of which have already been noted by Ld. TPO in its order. No fees were charged by the assessee against the same on the ground that there was no special benefit to the AEs. The Ld. TPO, adopting a rate of 2% per annum, arrived at ALP of the same, based on number of days for which the CG remained in force. The adjustment thus worked out to Rs.66.37 Lacs which was incorporated in the assessment order dated 24/04/2015.
3. Upon further appeal, Ld. CIT, in terms of judgment of this Tribunal rendered in Glenmark Pharmaceuticals Ltd. [43 Taxmann.com 191], reduced the same to 0.98%. Still aggrieved, the assessee is in further appeal before us.
4. Upon due consideration of factual matrix, we find that since the decision of this Tribunal rendered in Everest Kanto Cylinders Ltd. Vs. 3 ITA.No.3718/Mum/2017 Virgo Engineers Limited Assessment Year 2011-12 DCIT [34 Taxmann.com 19] in estimating the CG @0.5% has already been affirmed by Hon'ble Bombay High Court, we reduce the same to 0.5% per annum. The Ld. AO is directed to recompute the impugned addition in terms of this order.
5. Resultantly, the appeal stands partly allowed.
Order pronounced in the open court on 08th January, 2019.
Sd/- Sd/-
(Mahavir Singh) (Manoj Kumar Aggarwal)
ाियक सद" / Judicial Member ले खा सद" / Accountant Member
मुंबई Mumbai; िदनां कDated : 08/01/2019 Sr.PS:-Jaisy Varghese आदे श की ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent
3. आयकरआयु%(अपील) / The CIT(A)
4. आयकरआयु%/ CIT- concerned
5. िवभागीय ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai
6. गाड* फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, मुंबई / ITAT, Mumbai.