TaxTMI 
TaxTMI 
2016 (8) TMI 1002
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....has prayed for condonation of this delay. He submits that, as the condonation petition clearly establishes, the delay is bonafide due to the relevant papers being misplaced and that it is a fit case for condonation of delay. He justifies and supports the condonation petition. 3. As for the contents of the condonation petition, the relevant material facts are as follows. By way of a petition dated 15th January 2016, the Principal Commissioner of Income Tax, Delhi IX, New Delhi, has prayed for condonation of delay. It has been submitted that it was only on 12th January 2016 that the CIT(DR) informed the petitioner that while the revenue has not contested the issue regarding disallowance of technical fees for the assessment year 2003-04, the same issue is being contested for the assessment year 2004-05. The petitioner was informed that not contesting the same disallowance in an earlier year may prejudice the case of the petitioner for the subsequent years. It was in this backdrop that the petitioner attempted to locate the judicial folders for the assessment years 2003-04 and 2004- 05 but could not locate the same. The petitioner, however, submits that "now it is inconceivable that....
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....f limitation will cease to have any relevance. We are urged to reject the condonation petition and dismiss the appeal in limine. 5. Having perused the petition and having heard the rival contentions on the same, we are not inclined to yield to the prayer of the petitioner. There is nothing on record to show, or even indicate, that a decision was taken to file the appeal but it was due to some other factors that the appeal was never filed. What has been stated by the petitioner is only an inference but there is nothing to substantiate the facts embedded in the inference. There is at best an indication that the appeal is filed now because of the possibility of damage to the revenue's cause in the other assessment years, but then such a factor, in our considered view, cannot be reason enough to condone the delay. The condonation of delay can only be granted when there is a sufficient cause for delay in filing of appeal, but then in the present case, there is nothing to demonstrate the cause of delay; if at all, the facts set out in the petition show anything, these facts show the cause of filing the appeal now, rather than the cause of delay in filing of the appeal. There is a diff....
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....olding Asia Pte Ltd during the year under reference as under: Sl No. Particulars Amount 1. AFTP 22,55,270 2. Sales support on fasteners 14,93,297 3. Sales Support on Tapes and Plastics 13,24,702 4. Administrative H R (cost) 5,17,195 5. Consultancy fees 4,99,135 Total 60,89,599 2. That the learned CIT(A) has erred in upholding the disallowance of technical fees of Rs. 60,89,599 paid to a related party, i.e. YKK Holding Asia Pte Ltd, without considering the order passed under section 92CA(3) of the Income Tax Act for AY 2003-04 wherein entire amount of technical fees has been considered and allowed. 8. So far as this grievance of the assesse is concerned, a few material facts and the development leading to this appeal will have to be taken note of. The assessee before us is engaged in the business of manufacturing zippers ad fasteners. During the course of the scrutiny assessment proceedings, the Assessing Officer noted that the assessee has made payments, aggregating to Rs. 92,72,214, to it associated enterprises YKK Holdings Asia Pte Ltd. The Assessing Officer also observed that in in the related ....
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....uch services for which he was already paid as royalty charges", and that, "therefore, technical fees at Rs. 92,72,214 to its own associate enterprises is nothing but a diversion of income and hence is required to be disallowed". Aggrieved, assessee carried the matter in appeal before the CIT(A). Learned CIT(A) noted that so far as payment of Rs. 4,99,135 made by the assessee, the same is for threat and vulnerability assessment of the assessee but since expenses for information technology support is also paid under a separate bill, the claim "does not advance the cause of the assesse". As regards the payments of Rs. 22,55,270 under the head technical research and development fees, the documents furnished by the assessee relate to training report, training schedule, quality management system and environmental management system, various charts, photographs and factory layouts but "these documents do not support actual rendition of services by YHA". As regards the payment of Rs. 14,93,297 for "sales support to the fasteners division", the CIT(A) noted that the TP report categorically states that "YKK India's marketing strategy is essentially driven through relationship marketing whereb....
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....gth- something which the Assessing Officer is not entitled to deal with once he has referred the matter, regarding determination of arm's length price, to the TPO. It is also elementary that what the Assessing Officer cannot do directly, he cannot do indirectly either. What has been termed as a disallowance under section 37(1), given the facts of the case in which a reference was made to the TPO which has held that the payments to AE for technical services fees are at arm's length price, are de facto ALP adjustments mace directly by the Assessing Officer. However, once a reference is made by the Assessing Officer under section 92CA(3), the Assessing Officer is bound to accept the same. Section 92CA(4), as it stood at the material point of time, provides that "On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under sub-section (4) of section 92C having regard to the arm's length price determined under subsection (3) by the Transfer Pricing Officer." It cannot thus be open to the Assessing Officer to disregard the arm's length price determined by the TPO. When an Assessing Officer holds that no services are ....