Income Tax Appellate Tribunal - Panji
M/S. Abicor Binzel Production (I) Pvt. ... vs Deputy Commissiner Of Income-Tax,, on 15 December, 2017
आयकर अपील�य अ�धकरण "ए" �यायपीठ पुणे म� ।
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, PUNE
�ी डी. क�णाकरा राव,लेखा सद�य, एवं �ी �वकास अव�थी, �या�यक सद�य के सम�
BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM
आयकर अपील सं. / ITA Nos. 2253 to 2255/PUN/2014
�नधा�रण वष� / Assessment Years : 2005-06 to 2007-08
M/s. Abicor Binzel Production (India) Pvt. Ltd.
Survey No. 297, Village- Urawade,
Taluka- Mulshi,
Pune-412 108.
PAN : AACCA2959F
.......अपीलाथ� / Appellant
बनाम / V/s.
The Deputy Commissioner of Income Tax,
Circle-1(1), Pune.
......��यथ� / Respondent
Assessee by : Shri Saubhagya Agarwal &
Shri Darpan Kirpalani
Revenue by : Shri Rajeev Kumar, CIT.
सुनवाई क� तार�ख / Date of Hearing : 14.12.2017
घोषणा क� तार�ख / Date of Pronouncement : 15.12.2017
आदे श / ORDER
PER VIKAS AWASTHY, JM
These three appeals by assessee are for assessment years 2005-06 to 2007-08. In ITA No. 2253/PUN/2014, the assessee has assailed the assessment order dated 30.10.2014 passed u/s. 143(3) r.w.s 147 & 144C(13) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for assessment year 2005-06. In ITA No. 2254/PUN/2014, the assessee has assailed the assessment order dated 30.10.2014 passed 2 ITA Nos. 2253 to 2255/PUN/2014 A.Ys. 2005 -06 to 2007-08 u/s. 143(3) r.w.s 147 & 144C(13) of the Act for assessment year 2006-
07. In ITA No. 2255/PUN/2014, the assessee has assailed the assessment order dated 30.10.2014 passed u/s. 143(3) r.w.s 147 & 144C (13) of the Act for assessment year 2007-08. Since the issues involved in all the three appeals are similar, these three appeals are taken up together for adjudication.
2. Shri Saubhagya Agarwal & Shri Darpan Kirpalani appearing on behalf of the assessee submitted at the outset that assessee has entered into Advance Pricing Agreement (APA) with Central Board of Direct Taxes (CBDT) on 22nd January, 2016. The said agreement pertains to five consecutive assessment years starting from assessment year 2014- 15 to 2018-19. The ld. AR of assessee further submitted that as per terms of the agreement, the said agreement shall also apply to four "rollback years" commencing from the year 2010-11 to 2013-14. Thus, the agreement covers nine assessment years starting from assessment year 2010-11 to 2018-19.
2.1 The ld. AR contented that international transactions undertaken by the assessee for assessment years under consideration are identical to the assessment years which are part of APA proceedings. Therefore, TP adjustment, if any, required to be made, shall be in same terms as has been agreed by assessee in APA proceedings. The ld. AR placed on record copy of Advance Pricing Agreement u/s. 92CC of the Act. 2.2 The ld. AR further submitted that the Co-ordinate Bench of the Tribunal in assessee's own appeal in ITA No.139/PN/2014 for assessment year 2009-10 after taking into consideration APA remitted 3 ITA Nos. 2253 to 2255/PUN/2014 A.Ys. 2005 -06 to 2007-08 the issue back to the file of Transfer Pricing Officer (TPO) to decide the issue afresh in accordance with terms and conditions of APA.
3. Shri Rajeev Kumar representing the Department admitted that similar issue had come up before the Tribunal in assessee's own case for assessment year 2009-10. The report was called for from the Deputy Commissioner of Income Tax (DCIT) (TP) 1(1), Pune. As per the report, international transactions carried out by the assessee in assessment year 2009-10 were similar to the transactions entered during the assessment years 2010-11 to 2015-16 by the assessee. The terms and conditions of APA can be followed only, if, after verification TPO is satisfied that international transactions in assessment year under appeal are similar in nature.
4. We have heard the submissions made by representatives of rival sides and have also considered the APA executed by assessee with CBDT on 22.01.2016 and the order of Co-ordinate Bench of the Tribunal in assessee's own appeal in ITA No. 139/PN/2014 (supra). On perusal of order of TPO, we find that the assessee has entered into following international transactions with its Associated Enterprises (AE) during the assessment years under appeal :
Assessment Details of Transactions Value of the year Transactions
1.Purhcase of RM & Components 1,99,69,492/-
2. Sale of finished goods 6,67,32,797/-
2005-06 3.Purchase of tools 36,467/-
4. Purchase of traded goods 78,69,689/-
Total 9,46,08,445/-
4
ITA Nos. 2253 to 2255/PUN/2014
A.Ys. 2005 -06 to 2007-08
1.Purhcase of RM & Components 1,94,54,590/-
2. Sale of finished goods 7,31,09,980/-
3. Purchase of traded goods 1,29,15,445/-
4. Reimbursement of Expenses 63,332/-
2006-07 (Hotel Expenses, Exhibition
Expenses)
Total 10,55,43,347/-
1.Purhcase of RM & Components 6,25,25,045/-
2. Purchase of traded goods 17,00,138/-
2007-08 3.Sale of finished goods 12,45,46,395/-
4. Reimbursement of expenses 8,51,316/-
(Purchase of Tools and Video
Conferencing System)
Total 18,96,22,894/-
The assessee applied Cost Plus Method (CPM) as most appropriate method to benchmark its transactions. However, the same was rejected by TPO. The TPO computed Arm Length Prices (ALP) with AE by adopting CPM with internal comparables. The TPO further held that CUP is the most appropriate method for making TP adjustment. The assessee filed objection before the Dispute Resolution Panel (DRP) . The DRP upheld the action of TPO in making adjustment on the basis of CPLM. The DRP further upheld the action of TPO in applying CUP as the most appropriate method. The DRP directed the Assessing Officer to adopt adjustment for the respective assessment years as under :
Assessment year Adjustments
2005-06 Rs. 4,30,96,040/-
2006-07 Rs.4,80,82,007/-
2007-08 Rs.5,69,68,540/-
The assessee in appeal before the Tribunal has assailed
application of internal CUP as well as computation of ALP under internal Cost Plus Method.5
ITA Nos. 2253 to 2255/PUN/2014 A.Ys. 2005 -06 to 2007-08
5. In the light of fact that assessee has entered into APA, the Co- ordinate Bench of the Tribunal in the assessment year 2009-10 has directed Assessing Officer to decide the issue in accordance with the terms and conditions of APA as nature of transactions are similar. The relevant extract of findings of the Tribunal on this issue are as under:
"8. The perusal of grounds of appeal reflects that the assessee is in appeal on account of transfer pricing adjustment made in the hands of assessee. No other grounds of appeal have been raised by the assessee other than transfer pricing adjustment. The assessee has made a request since it had entered into Advance Pricing Agreement (APA) with CBDT covering nine years from assessment years 2010-11 to 2013-14 under roll back provisions and from assessment years 2014-15 to 2018-19 being the balance APA period, similar proposition should be applied to the year under consideration also as the international transactions entered into by the assessee with its associate enterprises in the instant assessment year are identical to the international transactions which were part of APA proceedings. The DCIT(TP) 1(1), Pune has submitted a report dated 13.07.2016, in which it has been stated that the international transactions during the assessment year 2009-10 were similar to the international transactions entered during assessment years 2010-11 to 2015-16. In view thereof, where the international transactions entered into by the assessee with its associate enterprises are similar to the international transactions in the succeeding years, then where the APA proceedings have been carried out in the case of assessee and the Board and the assessee have come to a settlement vis-à-vis the manner of computation of arm's length price in the case of assessee in relation to the international transactions with its associate enterprises, we deem it fit to restore this issue also back to the file of Assessing Officer, who shall consider the plea of assessee and shall after obtaining report from the TPO in this regard, decide the issue in accordance with law. Reasonable opportunity of being heard shall be afforded to the assessee while deciding the issue. The grounds of appeal raised by the assessee are thus, allowed. In respect of the balance additions, no specific ground of appeal has been raised nor any arguments have been made by the learned Authorized Representative for the assessee, hence the same are not disturbed."
In view of the facts discussed above, we are of considered opinion that it would be just and proper to restore these issues to the file of Assessing Officer with similar directions as above by the Tribunal in asssessee's appeal for assessment year 2009-10. We further find forces in the submission of ld. DR that before deciding the issues raised in 6 ITA Nos. 2253 to 2255/PUN/2014 A.Ys. 2005 -06 to 2007-08 appeals under consideration, it would be relevant to ascertain the nature of international transactions that have been carried out during assessment years 2005-06 to 2007-08. If they are of similar nature, the same can be decided afresh in line with the terms and conditions of APA. The appeals of the assessee are thus, allowed for statistical purpose with aforesaid directions.
6. In the result, appeals of the assessee are allowed for statistical purpose.
Order pronounced on Friday, the 15th day of December, 2017.
Sd/- Sd/-
(डी. क�णाकरा राव/D. KARUNAKARA RAO) (�वकास अव�थी /Vikas Awasthy)
लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 15th December, 2017. SB आदे श क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
1. अपीलाथ� / The Appellant.
2. ��यथ� / The Respondent.
3. The CIT (Appeals)-13, Pune.
4. The CIT (Appeals) IT/TP, Pune.
5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, "ए" ब�च, पुणे / DR, ITAT, "A" Bench, Pune.
6. गाड� फ़ाइल / Guard File.
// True Copy // आदे शानुसार / BY ORDER, �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.