TaxTMI 
TaxTMI 
2017 (9) TMI 515
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....Treating transactions with General Woods and Veneers Ltd., Canada as "international transaction" within the meaning of section 92B(1) of the Act. 1. On the facts and circumstances of the case and in law, the learned Commissioner Of Income Tax (Appeals)-10, Mumbai ["the CIT(A)"] erred in upholding the action of the Dy. Commissioner Of Income Tax, Central Circle 12 ("the A.O.") in not holding M/s. General Woods and Veneers Ltd., Canada ("GWVL") is not an Associated Enterprise ("AE") as defined u/s 92A of the Act and consequently transactions by the Appellant with GWVL do not fall within the meaning of international Transaction as defined in section 92B(1)of the Act. 2. The Appellant prays that it be held that GWVL is not an AE of the Appellant u/s 92A of the Act and consequently, the transactions between the Appellant and GWVL do not fall within the meaning of "International Transaction" under section 92B(1) of the Act. GROUND II: Treating transactions with Durian Industries Limited as "international transaction" within the meaning of section 92B(1) of the Act 1. On the facts and circumstances of the case and in law, the Id. CIT(A) erred in upholding the action of the A.O....
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....ng the actions of the AO in levying interest u/s. 234B, 234C and 234DoftheAct. 2. The Appellant denies its liability to such interest and prays that the AO be directed to delete the levy of aforesaid interest." 3. As a perusal of the aforesaid Grounds of appeal reveal, the substantive dispute arises from the action of the income-tax authorities in making an addition of Rs. 1,44,70,074/- to the returned income on account of transfer pricing adjustment. 4. Briefly put, the relevant facts are that assessee is a company engaged in the business of manufacturing of spliced decorative veneer in flitch form. In the impugned assessment finalized by the Assessing Officer under section 143(3) r.w.s. 153C of the Act dated 31/1/2011, it was noticed that assessee had entered into transaction of purchase/import of raw-materials and also sale of its finished products with two concerns namely M/s. General Woods and Veneers Limited, Canada (in short 'General Woods') and Durian Industries Ltd. USA ( in short 'Durian'). For the reasons narrated in the assessment order the Assessing Officer treated the transactions with two concerns as 'international transactions' within the meaning of section 92....
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.... was assessed in India on its worldwide income, being an Indian resident. It is sought to be canvassed that the 'international transactions' covered in the scope of section 92B envisage the transactions between two or more associated enterprises, where either or both of whom are non-residents. In the instant case, neither assessee nor the other concern i.e, Durian is a non-resident. 7. The Ld. Representative for the assessee also pointed out that the said factual position was highlighted before the Assessing Officer as well as before the CIT(A); and, for that matter he has referred to pages 62-67 of the Paper Book containing the written submission dated 27/12/2010 furnished to the Assessing Officer. It was contended that before the CIT(A) additional submissions were also filed dated 18/02/2014, which, inter-alia, included a copy of the return of income filed by the said concern with the Indian taxauthorities, copies of which have been placed at pages 120 to 133 of the Paper Book. 8. On this aspect, we have heard the rival submissions and find that the case put up by the assessee has been unjustly brushed aside by the lower authorities. In fact, at the time of hearing, the ld. DR ....
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....luded that General Woods was an associated enterprise having regard to clause (h), (i) and (j) of Sec. 92A(2) of the Act. The said stand of the Assessing Officer has since been approved by CIT(A) also, and in this background assessee is in appeal before us. 10. At the time of hearing, the first plea set-up by the assessee was that the lower authorities have wrongly concluded that S/Shri Satish Chawla and Stevan Elefant are Directors of General Woods. In this context, the learned representative pointed out that S/Shri Satish Chawla and Stevan Elefant are neither the shareholders and nor the Directors in General Woods and in this context, referred to a Certificate obtained from the external Accountant of General Woods, a copy of which has been placed in the Paper Book at page 69. Furthermore, the learned representative pointed out to a rectification application dated 15.10.2011 moved before the Assessing Officer in this regard, which is also placed in the Paper Book. The learned representative pointed out that though the application of the assessee has been rejected by the Assessing Officer vide order dated 5.8.2014, a copy of which is on record, but no reasons have been assigned to....
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....der :- "92A(2) For the purposes of sub-section (1), two enterprises shall be deemed to be associated enterprises if, at any time during the previous year,- ............. (i) the goods or articles manufactured or processed by one enterprise, are sold to the other enterprise or to persons specified by the other enterprise, and the prices and other conditions relating thereto are influenced by such other enterprise" A perusal of the aforesaid reveals that the clause is attracted only if "the prices and other conditions relating thereto are influenced by such other enterprise". As per the Assessing Officer, it is Shri Satish Chawla and Shri Stevan Elefant who determine the prices for sale and purchase for assessee as well as on behalf of General Woods. In this context, the learned representative explained that the aforesaid individuals are the Directors of the assessee-company, but are based in Canada. They determined the purchase and selling prices for and on behalf of the assessee only and not for General Woods. In this context, we have already concluded that neither Shri Satish Chawla nor Shri Stevan Elefant are the Directors of General Woods. Apart from the aforesaid, the....