TaxTMI 
TaxTMI 
2014 (12) TMI 47
X X X X Extracts X X X X
X X X X Extracts X X X X
....een concealed or inaccurate particulars have been furnished. (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessee had not proved to the satisfaction of the Assessing Officer that the price charged or paid for the international transaction was computed in accordance with the provisions contained in section 92C and in the manner prescribed under that section in good faith and with due diligence as no appeal has been preferred against the adjustments made by the Transfer Pricing Officer. 2. The appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of appeal. 3. The appellant prays for appropriate relief based on the said grounds of appeal and the facts and circumstance of the case. Grounds of Cross Objection No.162/Mum/2011: "1. The Ld. CIT(A) erred in not deciding the additional ground filed by the assessee stating that the Assessment Order passed u/s. 143(3) is beyond the statutory time limit prescribed under second proviso to sec. 153(1) and hence Penalty Order u/s. 271(1) (c) cannot be passed even though he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat it is undated and other party has not confirmed regarding the validity of agreement for assessment year 2006-07. The assessee did not adduce any evidence about the services rendered by Mr. Manfred Giloy for entitle him for receipt of commission. It is in these circumstances the impugned addition was made. The AO framed the draft order which was served on the assessee. The assessee did not challenge the draft order and stated before the AO that assessee did not file objection and has accepted the draft assessment order. Thus, the addition was made which was not agitated in further appeal. 2.2 On the above addition impugned penalty has been levied. Apart from supporting the submission made by the assessee before AO and TPO the assessee submitted that assessee did not file objection before DRP on the ground that company was not doing well and incurring losses. It was decided to suspend the business activities in view of losses and there was no tax liability and commission was genuinely paid to Mr. Manfred Giloy. It was submitted that assessee neither concealed particulars of income nor filed inaccurate particulars as all the details of commission payment were filed with the ret....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1998. The assessee has paid commission only at the approved rate even though for post year 2000, the RBI approval is not required but is automatically granted under the liberalized FEMA (f) Since commission payment is within the limits approved by RBI. In any case, the commission ought to be provided as arm's length and not excessive. (g) Finally, the assessment order passed u/s. 143 (3) is beyond the statutory time limit prescribed under second proviso to Sec. 153 (1). The duty for completion of the assessment under that provision was December 31, 2009 whereas the assessment order is passed on February 2, 2010. It is submitted that when the assessment order itself is time barred arid, therefore, ab-inito void, no penalty can be levied based on such an order. This aspect has been taken up in the additional ground of appeal. The appellant relies on the decision of the Supreme Court in the case of National Thermal Power Co Ltd vs. CIT (229 ITR 383) (SC) for the proposition that a legal issue can be taken up for the first time before the Appellate authorities when all the facts are very much on records of the assessment. (h) The Appellant relies, inter alia, on the decision ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....penalty. In view of these findings recorded by Ld. CIT(A), he has declined to consider the additional grounds and has cancelled the penalty. The Department is aggrieved and has raised aforementioned grounds of appeal. 4. Assessee in its cross objection has contended that the assessment was framed beyond statutory time limit, therefore, penalty could not be levied and despite having admitted the additional ground Ld. CIT(A) has erred in not deciding the additional grounds is legal one. 5. Ld. DR relying upon the grounds of appeal submitted that the impugned penalty is levied in respect of TP adjustment and has to be examined in the light of Explanation - 7 to section 271(1)(c) and Ld. CIT(A) having not examined that explanation has committed an error in deleting the penalty. 6. On the other hand, on the deletion of concealment penalty Ld. AR has relied upon the order passed by Ld. CIT(A) and the evidences furnished by the assessee during the course of assessment proceedings and explanation furnished by the assessee in the penalty proceedings. On the issue regarding nonadjudication of additional ground by the Ld. CIT(A) it was submitted by Ld. AR that assessment was framed b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....substantiate that the said transaction was at arm's length. Thus, it was pleaded by Ld. DR that the case of the assessee clearly falls within the ambit of Explanation - 7 and penalty has wrongly been deleted by Ld. CIT(A). Ld. DR further submitted that the decision in the case of VIP Industries Ltd. vs. IAC (supra) also could not be applied to the facts of the present case as in the present case assessee did not submit any evidence of services having been rendered by Mr. Manfred Giloy. 8. We have heard both the parties and their contentions have carefully been considered. First, we will take up the issue raised by the assessee in its cross objection. It is the case of the assessee that Ld. CIT(A) has erred in not adjudicating the additional ground raised by the assessee though the same was recorded by him in his order. Ld. CIT(A) has not adjudicated the additional ground as he has granted relief to the assessee on merits. Since it is a legal issue, we do not consider it necessary to restore these appeals to the file of Ld. CIT(A) to adjudicate this issue as it will unnecessarily prolong the proceedings. Both the parties have submitted their arguments and we proceed to decide thi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e reported as international transactions under the TP provisions but were also examined by the TPO and in the order passed under section 92CA(3) the transactions were considered to be at arm's length. In none of these years it has been shown that the assessee was required to submit proof regarding rendering of services by Mr. Manfred Giloy. The very basis of the payment made was an agreement on the basis of which the payment of commission has been made in the impugned assessment year. If in earlier years, similar commission was found to be at arm's length then the same could not be considered as not being at arm's length in the year under consideration unless it was shown by the Department that the facts in the year under consideration have undergone a change. No material has been brought on record to show that facts of the present year are in any manner different from the earlier years in which similar transaction was considered at arm's length. 8.3 Ld. CIT(A) has also recorded a finding of fact that similar transaction in earlier years has been considered to be at arm's length by the TPO and for this year a different stand has been taken without bringing any material on record....