Indian Kanoon - Search engine for Indian Law

Income Tax Appellate Tribunal - Mumbai

S. Vinodkumar Diamonds P.Ltd, Mumbai vs Asst Cit 5(3)(2), Mumbai on 3 October, 2019

1 ITA No.968/Mum/2016 M/s. S. Vinodkumar Diamonds Pvt.Ltd.

Assessment Year :2011-12 आयकर अपीलीय अिधकरण "जे" ायपीठ मुंबई म । IN THE INCOME TAX APPELLATE TRIBUNAL "J" BENCH, MUMBAI माननीय ी महावीर िसं ह, ाियक सद एवं माननीय ी मनोज कुमार अ वाल ,ले खा सद के सम । BEFORE HON'BLE SHRI MAHAVIR SINGH, JM AND HON'BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ I.T.A. No.968/Mum/2016 (िनधा रण वष / Assessment Year:2011-12) M/s. S. Vinodkumar Diamonds Pvt. Ltd. ACIT-Circle-5(3)(2) Office No.BW -3010 Mumbai.

                                                     बनाम/
Bharat Diamond Bourse
Bandra (East)                                         Vs.
Mumbai-400 051.

9थायीले खासं ./जीआइआरसं ./PAN/GIR No. AAICS-5514-N (अ पीलाथ</Appellant) : (=>थ< / Respondent) Appellant by : Shri Madhur Aggarwal- Ld. AR Respondent by : Shri Rajneesh Yadav - Ld.DR सुनवाई की तारीख/ : 16/09/2019 Date of Hearing घोषणा की तारीख / : 03/10/2019 Date of Pronouncement आदे श / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1. Aforesaid appeal by assessee for Assessment Year [in short referred to as 'AY'] 2011-12 contest final assessment order dated 28/01/2016 passed by Ld. ACIT-Circle-5(3)(2), Mumbai u/s.143(3) r.w.s.144C(13) pursuant to the directions of Ld. Dispute Resolution Panel-2, Mumbai [DRP] u/s 144C(5) dated 14/12/2015 on various grounds of appeal.

M/s. S. Vinodkumar Diamonds Pvt.Ltd.

Assessment Year :2011-12

2. The learned Authorized Representative, at the outset drew our attention to ground No. 2.1.2 and submitted that the sole issue under appeal is notional interest on export receivables by the assessee from its Associated Enterprises (AE). The Ld. AR pleaded that the terms of credit period were uniform and the assessee did not charge any interest from its non-AEs for delayed payment and followed a consistent policy with respect to AEs as well as non-AEs. In the above factual matrix, reliance has been placed on binding judicial precedent in the shape of the decision of Hon'ble Bombay High Court in CIT V/s Indo American Jewellery Ltd. (44 Taxmann.Com 310 08/01/2013) subsequently followed by Hon'ble court in CIT V/s M/s Livingstones (ITA No. 887 of 2014 dated 28/11/2016) as well as Mumbai Tribunal in Frost & Sullivan India Pvt. Ltd. (IT(TP) Nos. 6721/Mum/2010 & 2290/Mum/2017 dated 18/06/2019). The copies of the same has been placed on record. The Ld. DR submitted that no factual finding shave been rendered by the lower authorities in this regard.

3. We have heard and considered the respective arguments.

4. Upon perusal of para-4 of order u/s 92CA (3) dated 31/12/2014 passed by Ld. Transfer Pricing Officer, it transpires that the assessee had submitted as under: -

As a matter of business policy, the assessee neither charges any interest to its AEs and non-AE debtors nor pays any such interest to its AE and non-AE creditors.

The said submissions were reiterated by the assessee before learned DRP also which is evident from assessee's submissions as extracted in the directions of Ld. DRP on page no.-10 of the directions dated 3 ITA No.968/Mum/2016 M/s. S. Vinodkumar Diamonds Pvt.Ltd.

Assessment Year :2011-12 14/12/2015. It was also submitted that maximum delay from AE was 190 days in comparison to maximum delay of 246 days in case of non-AE customers and no interest has been charged in either of the case. We find that although Ld. DRP, at para 5.2 considered this aspect, however, failed to consider the ratio of cited judicial precedent rendered by Hon'ble Bombay High Court which was cited by the assessee in its submissions.

5. Therefore, after due consideration, the bench formed an opinion that the matter was to be restored back to the file of Ld. DRP to examine this factual aspect and re-consider the assessee's submissions in the light of binding judicial precedents as cited in preceding paragraph-2.

6. The other grounds have neither been argued nor been delved into by us and therefore, the same are left open.

7. The appeal stands partly allowed for statistical purposes.

Order pronounced in the open court on 03rd October, 2019.

              Sd/-                                 Sd/-
         (Mahavir Singh)                   (Manoj Kumar Aggarwal)
  ाियक सद  / Judicial Member           लेखा सद  / Accountant Member

मुंबई Mumbai; िदनां क Dated : 03/10/2019 Sr.PS, Jaisy Varghese आदे शकी ितिलिपअ"ेिषत/Copy of the Order forwarded to :

1. अपीलाथ</ The Appellant 4 ITA No.968/Mum/2016 M/s. S. Vinodkumar Diamonds Pvt.Ltd.

Assessment Year :2011-12

2. =>थ</ The Respondent

3. आयकरआयुE(अपील) / The CIT(A)

4. आयकरआयुE/ CIT- concerned

5. िवभागीय=ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai

6. गाडJ फाईल / Guard File आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, मुंबई / ITAT, Mumbai.