Income Tax Appellate Tribunal - Mumbai
Rolls Royce Marine India P.Ltd, vs Dcit Cir 15(3)(2), on 24 February, 2017
आयकर अपील य अ धकरण "K" यायपीठ मुंबई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "K" BENCH, MUMBAI
BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND
SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER
SA Nos. 81/Mum/2017
Arising out of ITA No . 689/Mum/2017
Assessment Years 2012-13
M/s Rolls-Royce Marine Dy. Commissioner of Income Tax
India Private Limited, Circle 15 (3)(1),
Plot No. D-505, TTC Mumbai.
Industrial Area, v.
MIDC, Turbhe,
Navi Mumbai - 400 703.
PAN No. AAACU4687L
Applicant Respondent
Applicant by Karishma R. Phatarphekar &
Mananwala
Respondent by Shri M.V. Rajguru
Date of Hearing : 24-02-2017
Date of Pronouncement : 24-02-2017
ORDER
PER BENCH:
This stay application being SA No. 81/Mum/2017 has been filed by the assessee seeking stay of the outstanding demand of Rs. 3,06,66,020/- towards tax and interest payable by the assessee for the assessment year 2012-13 . The stay application has arisen from appeal filed by the assessee with the Income-Tax Appellate Tribunal (hereinafter called " the tribunal") in ITA No. 689/Mum/2017 for the assessment year 2012-13. The appeal before the tribunal has arisen from the 2 SA No. 81/Mum/2017 (Arising out of ITA No. 689/Mum/2017) assessment order dated 30-11-2016 passed by learned Assessing Officer (hereinafter called " the AO") u/s 143(3) r.w.s. 144C(13) of the Income- tax Act, 1961,which order of the assessment dated 30-11-2016 has been passed by the AO in pursuance of directions dated 09-09-2016 of Dispute Resolution Panel-2(hereinafter called "the DRP") u/s 144C(5) of the Act of 1961 , wherein the AO made an upward adjustment of Rs. 5,67,68,134/- in the assessment order dated 30-11-2016 to arm's length price(ALP) in pursuance of direction of DRP, wherein income finally assessed to tax was computed at Rs.11,28,65,620/- . The AO issued notice of demand dated 30.11.2016 u/s 156 of the Act of 1961 wherein demand of tax and interest to the tune of Rs.3,06,66,020/- was raised against the assessee for assessment year 2012-13 which is subject matter of this stay petition.
2. It is the say of the ld. Counsel for the assessee that the assessee is a part of a group which is a global leader in power propulsion and motion control systems. The learned counsel for the assessee submitted that it has filed its revised return of income declaring an income of Rs. 5,56,17,488/-. It was submitted that there was an international transactions with Associated Enterprises(AE) , and the TPO vide its order dated 18-01-2016 has made upward transfer pricing adjustment of Rs. 5,74,58,542/- in respect of assessee's international transactions with AE pertaining to provision of application engineering services, payment of corporate fees, credit balances written off and balances written back(debit balance). It is the say of learned counsel for the assessee that DRP upheld the upward adjustment to the ALP to the tune of Rs. 5,67,68,134/- w.r.t. international transactions entered into by the assessee with its AE , vide its directions dated 09-09-2016 u/s 144C(5) of the Act of 1961 . It was submitted that finally assessment was completed by the AO determining assessed income of the assessee at Rs. 11,28,65,620/- , vide assessment order dated 30-11-2016 passed by the 3 SA No. 81/Mum/2017 (Arising out of ITA No. 689/Mum/2017) AO u/s 143(3) r.w.s. 144C(13) of the Act. It was submitted by learned counsel for the assessee that vide notice of demand dated 30-11-2016 total demand of tax and interest to the tune of Rs. 3,06,66,020/- is determined to be payable by the assessee which is still outstanding to be payable by the assessee as of date. The ld. Counsel for the assessee submitted that major addition has been made by Revenue wherein there was disallowance of Rs.4,88,96,708/- w.r.t. payment by the assessee to its AE towards corporate fee paid for availing intra group services from its AE, wherein ALP has been detrmined by Revenue to be Nil. It is the say of learned counsel for the assessee that these services are technical support, product strategy and optimization services product training, sharing of global reporting software. It was submitted by learned counsel for the assessee that TPO has arrived at ALP of Nil on the allegation, inter-alia , that no services were rendered to the assessee by its AE . It was the say of learned counsel for the assessee that mandate of TPO is only to determine ALP of international transaction with AE in accordance with chapter X of the Act of 1961 read with Rule 10A to 10E of Income- tax Rules,1962, while the TPO could not determine that no services were rendered by AE to the assessee and the issue is squarely covered by decision of Hon'ble Bombay High Court judgment in the case of CIT v. Lever India Exports Limited in ITA no. 1306 of 2014 vide judgment dated 23-01-2017. The copy of the said judgment is placed in the file by learned counsel for the assessee.It was submitted by learned counsel for the assessee that gross injustice has been done by Revenue to the assessee while computing ALP to be Nil w.r.t. international transactions of the assessee with its AE w.r.t. corporate fees paid by the assessee to its AE w.r.t. intra group services availed by the assessee from its AE. The assessee has tried to justify that prima-facie balance of convenience is in favour of the assessee and justification was sought to be made to grant 4 SA No. 81/Mum/2017 (Arising out of ITA No. 689/Mum/2017) stay of entire outstanding demand of tax and interest payable by the assessee for the assessment year 2012-13.
3. The ld. D.R. while opposing the stay application filed by the assessee submitted that the assessee be directed to deposit the outstanding demand of tax and interest payable by the assessee.
4. We have considered submissions of both parties and perused the material available on record. We have observed that the additions have been made to the tune of Rs. 5,67,68,134/- to the returned income which has been made by the AO in pursuance of directions of DRP-2. The details of the orders passed by the authorities below are enumerated in preceding para's which are not repeated for sake of brevity. Total outstanding demand of tax and interest payable against assessee for the assessment year 2012-13 is determined by the AO at Rs. 3,06,66,020/- which was raised by the AO vide notice of demand dated 30-11-2016 u/s 156 of the Act . Without commenting on merits of the case and keeping in view factual matrix of the instant stay petition , we are of the considered view that interest of justice will be best served in the instant petition if the assessee be directed to deposit Rs. 25 lacs (Rupees Twenty Five Lacs only) with the Revenue latest by 20-03-2017 towards the outstanding demand of tax and interest for assessment year 2012-13. The assessee is directed to produce paid challan evidencing deposit of Rs. 25 lacs to the credit of Central Government latest by 20-03-2017 with the AO. The balance outstanding demand payable by the assessee towards tax and interest which is raised by the AO vide notice of demand dated 30-11-2016 u/s 156 of the Act for assessment year 2012-13 stood stayed on payment of Rs. 25 lacs as ordered by us as above. The stay of balance remaining outstanding demand of tax and interest payable by the assessee for assessment year 2012-13 shall be valid for a period of one hundred and eighty days from the date of this order or disposal of 5 SA No. 81/Mum/2017 (Arising out of ITA No. 689/Mum/2017) the assessee's appeal in ITA No. 689/Mum/2017 by the tribunal, which ever is earlier. The out of turn hearing of appeal in ITA No. 689/Mum/2017 is hereby fixed on 24th May, 2017 and the date is announced in the open court which has been noted by both the parties and no further notice will be issued to the concerned parties. Needless to say that the assessee shall not seek any adjournment except on genuine and bonafide reasons in exceptional circumstances. This order is pronounced in the open court in the presence of both the parties. At the cost of repetition we would like to clarify that we have not commented on the merits of the issues in appeal in ITA no. 689/Mum/2017. We order accordingly.
5. In the result, the Stay Application No. 81/Mum/2017 arising out of ITA No. 689/Mum/2017 filed by the assessee for assessment year 2012-13 is allowed in accordance with the terms as indicated above.
Order pronounced in the open court on 24th February, 2017.
Sd/- sd/-
(MAHAVIR SINGH) (RAMIT KOCHAR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, .
RK
6 SA No. 81/Mum/2017
(Arising out of ITA No. 689/Mum/2017)
copy to...
1. The appellant
2. The Respondent
3. The CIT(A) - Concerned, Mumbai
4. The CIT- Concerned, Mumbai
5. The DR Bench, K
6. Master File
// Tue copy//
BY ORDER
DY/ASSTT. REGISTRAR
ITAT, MUMBAI