TMI Blog2024 (1) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... it will be appropriate that these issues are also remitted to AO/TPO. The AO/TPO shall consider the issues afresh after giving assessee proper opportunity of being heard. Both the appeals filed by the assessee are allowed for statistical purposes. - Shri Shamim Yahya, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Shri Nageshwar Rao, Advocate, Ms. Viyushti Rawat, Advocate For the Revenue : Shri Rajesh Kumar, CIT DR, Shri Manu Chaurasia, Sr. DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : The aforesaid appeals filed by the assessee are directed against the respective orders of the Assessing Officer pursuant to the directions issued by the ld. DR for the respective assessment years. 2. Since the issues are common connected and the appeals were heard together, these are being consolidated and disposed off by this common order. 3. Grounds of appeal taken by the assessee read as under :- ASSESSMENT YEAR 2005-06 1. The order passed by the Learned Additional Director of Income Tax, Transfer Pricing Officer- 1 (1), New Delhi ( the Learned TPO ), final assessment order passed by the Deputy Commissioner of Income Tax, Circle 1(1), New Delhi ( the learned AO ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts and circumstances of the case and in law, the learned TPO/AO/CIT(A) have erred by selecting certain companies earning super normal profits as comparable to the Appellant for impugned transaction. 9. That on facts and circumstances of the case and in law, the learned TPO/AO/CIT(A) have erred in rejecting the economic analysis undertaken by the Appellant by conducting a fresh economic analysis for undertaking the impugned transaction to find new comparable companies. 10. That on facts and circumstances of the case and in law, the learned TPO/AO/CIT(A) have erred in not making appropriate adjustments to account for varying risk profiles of the Appellant vis-ell-vis the comparable companies and in the process also neglected the Indian transfer pricing regulations, OECD guidelines on transfer pricing and judicial precedence. 11. The learned CIT(A) has violated the principle of natural justice by: a) not giving due cognizance to the detailed analysis and technical arguments submitted by the Appellant in its submissions before the learned CIT(A); b) issuing an order without giving any detailed findings and merely upholding the order given by the Learned AO/TPO 12. That on facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till the date of completion of assessment u/s 143(3) of the Act. ASSESSMENT YEAR : 2006-07 1. The order passed by the Learned Additional Commissioner of Income Tax, Transfer Pricing Officer- 1 (1), New Delhi ( the Learned TPO ), draft and final assessment order passed by the Deputy Commissioner of Income Tax, Circle 1 (1), New Delhi ( the learned AO ), pursuant to the directions of the Dispute Resolution Panel - I ( the DRP ), are bad in law and void- ab-initio. 2. The learned AO following the order of the learned TPO and DRP has erred in law and on the facts of the case in determining the total income of the Appellant at INR 162,740,400/- as against the returned income of NIL therefore, to the extent of additions/disallowances made by the learned AO, the order of the learned AO is bad in law and needs to be annulled. Transfer pricing grounds of appeal 3.1 That on facts and circumstances of the case and in law, the learned AO/ TPO/ the DRP have erred in rejecting the economic analysis undertaken by the Appellant by conducting a fresh economic analysis for provision of marketing services ( impugned transaction ) to find new comparable companies. 3.2 That on facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the learned AO/TPO/ the DRP have erred by selecting certain companies earning super normal profits as comparable to the Appellant for impugned transactions. 3.10 That on facts and circumstances of the case and in law, the learned AO/TPO/the DRP have erred in confirming that TPO has discharged his statutory onus by establishing that the conditions specified in clause (a) to (d) of Section 92C (3) of the Act have been satisfied before disregarding the arm's length price determined by the Appellant and proceeding to determine the arm's length price. 3.11 That on facts and circumstances of the case and in law, the Learned AO has erred in not meeting the preconditions for making reference to the Additional Director of Income Tax, Transfer Pricing Office - 1 (1) under Section 92CA(1) of the Act and in not providing an opportunity of being heard before referring the transfer pricing issues to the Learned TPO. Corporate tax grounds of appeal Disregard of acquisition cost of business database 4.1 That on the facts and circumstances of the case and in law, the DRP has erred in confirming and accordingly, the learned AO has erred in restricting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on facts and circumstances of the case and in law, the learned AO has erred in charging excess interest under section 234B of the Act. Also, the learned AO has erred on facts and in law in charging interest u/s 234B of the Act till the date of the order u/s 254/143(3) instead till the date of completion of assessment u/s 143(3) of the Act. 10. That on facts and circumstances of the case and in law, the learned AO has erred in not allowing the credit of tax payments made by the appellant against the demand imposed vide assessment order dated July 26, 2010 passed u/s 143(3) of the Act. 11. That on facts and circumstances of the case and in law, the learned have grossly erred in initiating penalty proceedings under section 271 (1)(c) of the Act. The above grounds of appeal are mutually exclusive without prejudice to each other. The appellant prays for leave to add, alter, amend and 1 or modify any of the grounds of appeal at or before the hearing of the appeal. 4. Apropos transfer pricing issue : the assessee is incorporated on 31st August, 1999 under Companies Act, 1956 and is engaged in the business of buying and selling foreign currency and traveler cheques and is also involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to 'financial leasing services' segment was corrected by adopting correct segment of market support service with effect from Assessment year 2007-08 and all subsequent assessment years till assessment year 2019-2020 (Refer to Annexure 1-4 of Applications for admission of additional evidence filed in both years of AY 2005-06 and AY 2006-07). 5. During hearing of present appeals, Appellant requested for consideration of additional evidence, benchmarking the transactions in question with reference to correct segment of market support services CMSS'), as accepted by TPO in all subsequent years. In support of such request Appellant relied on order of this Hon'ble Tribunal relating to A Y 2004-05 (supra). Ld. CIT(DR) raised the very same objections as already considered by coordinate bench in said order of A Y 2004-05. As identical facts and contentions were already considered by coordinate bench of this Hon'ble Tribunal in relation to appeal for A Y 2004- 05 (Para 10 -13 011 page 15-16 of said order), Appellant prays that same may kindly be followed for present appeals as it would ensure that benchmarking is carried out in accordance with law and by conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight to not consider the same and allege that in present AY the comparables of right segment were taken. 8. Now coming to the question of admissibility of additional evidence we are of the considered view that Rule 29, bars the right of parties to the appeal to produce additional evidence either oral or documentary. However, if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders, the additional evidence can be called for. Further the Rule 29 provides that for any other substantial cause also the Tribunal can allow the additional evidences. The decision of the Delhi Bench F in the case of UOP LIC v Additional Director of Income tax, International taxation, Circle 2(2) New Delhi (2007) 108 ITD 186 is relevant where in para 30 it is observed; 30. It is a settled position that production of additional evidence at the appellate stage is not a matter of right to litigating public and allowing of production of additional evidence is in the discretion of the Tribunal. The said discretion, however, is to be exercised judicially and not arbitrarily. As held by Hon ble Madhya Pradesh High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee ex post facto. The nature of fresh set of comparables require a fresh look into all the issues, substantially and incidentally involved due to erroneously taking comparables of wrong segment by both the assessee and the TPO. 12. So the proposition of law as relied by Ld. DR are not applicable to the facts and circumstances before us as in none of the cases cited there was a question of fact involved that may be even the lower revenue authority had fallen in error to rely an incorrect set of evidences of the assessee. The question of delay in filing of additional evidence is not of any consequence unless a malafide is alleged and established, which is not the case here. 13. Thus, we are inclined to allow the application of the assessee. Accordingly, impugned final assessment order is set aside and the TPO is directed to accept the fresh evidence and report of the assessee for the purpose of Section 92C of the Act r.w. Rule 10B of the Income-tax Rules, 1962 and, after giving further opportunity of hearing to the assessee pass a fresh order. The assessee will be at liberty to raise further incidental issues afresh before the TPO/AO. 7. Respectfully following the precedent as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. For convenience following are placed in caselaw compendium: (a) Order passed by Mumbai Tribunal in ITA 4106/MUM12007 dated 29.10.2014 for AY 2002-03 is at pages 1 to 6; (b) ITAT order for A Y 2002-03(post MA) bearing ITA 4106/MUM/2017 dated 29.10.2014 can be found at pages 7 to 10; (c) ITAT order in cross objection 202/Mum/2009 arising out of ITA 4106/Mum/2007 is at pages 11 to 13 (d) ITAT order for A Y 2010-11 bearing ITA 1982/DELl20 15 dated 21.10.2020: is at pages 64 to 83 7. Issue relating to valuation and depreciation of goodwill in A Y 06-07 is identical to that of A Y 2005-06. Issue of valuation and depreciation relating to database arises only in A Y 06- 07. 8. At the hearing of present appeals Ld. CIT(DR) contended that as transfer pricing issue relating to MSS are being remanded to Ld. AO/Ld. TPO for de novo consideration the issues relating to goodwill and database also may be remanded as Hon'ble Tribunal relied on Ld. TPO's upholding value while allowing relief to Appellant. In response appellant's authorised representative submitted that transaction of acquisition relates to 2001 only unlike MSS transactions, which arise in each of the years and acquisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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