TaxTMI 
TaxTMI 
TaxTMI 
2020 (6) TMI 53
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....ng the total income of the Appellant under section 143(3) of the Act, for the subject assessment year at INR 123,92,03,240 as against the returned income of INR 5,42,98,030. 2. That on the facts and circumstances of the case and in law, the initial order dated December 18, 2018, and the consequential orders passed in pursuance thereto are bad in law and void ab-initio as the same have been passed in violation of the statutory provisions of section 144C of the Act. 2.1. That on the facts and circumstances of the case and in law, the AO by issuing notice of demand under section 156 and penalty notice under section 274 read with section 271 (1 )(c) of the Act, along with the order dated December 18, 2018 (titled as 'Draft Assessment Order') has in a way passed a final assessment order as against the draft assessment order contemplated under section 144C(1) of the Act in the case of an eligible assessee. 3. That on the facts and circumstances of the case and in law, the orders passed by the AO / TPO were bad in law as the pre-requisite for applying Chapter - X, ie, existence of international transaction between two Associated Enterprises ("AE") under section 92B of the Act, was n....
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....tective methods, disregarding the decision of the Hon'ble Tribunal in Appellant's own case for the subject assessment year. 7. That on the facts and circumstances of the case and in law, the AO / DRP / TPO have erred in enhancing the Transfer Pricing adjustment to INR 118,49,05,211 in the remand proceedings as against adjustment of INR 51,89,69,687 made in first round, without appreciating that the Assessee could not be in a worse-off position in remand proceedings. 8. That on the facts and circumstances of the case and in law, the AO / DRP / TPO erred in applying Bright Line Test ('BLT') and Cost Plus Method ('CPM') for making transfer pricing adjustment of INR 118,49,05,211 under both the methods on protective basis. The lower authorities have further grossly erred in not adhering to the binding order of the Hon'ble Tribunal in Appellant's own case, wherein the Hon'ble Tribunal expressly directed to compute the adjustment on an aggregate basis in the first round of proceedings. 9. That on the facts and circumstances of the case and in law, the AO / DRP / TPO have grossly erred in arbitrarily applying CPM for making transfer pricing adjustment amounting to INR 1,18,4....
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....bove grounds are independent and without prejudice to the other grounds of appeal preferred by the Appellant." ITA No. 8753/DEL/2019 "Appeal under section 253(1) of the Income Tax Act, 1961 (the "Act") against the order dated October 18, 2019 (received on October 23, 2019) passed under section 143(3) read with section 144C of the Act by the Deputy Commissioner of Income Tax, Circle 3(1), Gurgaon (the "AO") for the aforesaid assessment year ("AY") 1. That on the facts and circumstances of the case and in law, the AO has erred in assessing the total income of the Appellant under section 143(3) of the Act, for the subject assessment year at INR 163,25,39,320 as against the returned income of INR 64,39,34.320/-. 2. That on the facts and circumstances of the case and in law, the initial order dated December 18, 2018, and the consequential orders passed in pursuance thereto are bad in law and void ab-initio as the same have been passed in violation of the statutory provisions of section 144C of the Act. 2.1 That on the facts and circumstances of the case and in law, the AO by issuing notice of demand under section 156 and penalty notice under section 274 read with section 271 (1 ....
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....the Hon'ble Tribunal in Appellant's own case and various decisions of the High Court. 6. That on the facts and circumstances of the case and in law, the AO / DRP / TPO grossly erred in applying Bright Line Test ('BLT') for making transfer pricing adjustment amounting to INR 98,86,05,077, on protective basis, without appreciating that BLT has been expressly rejected by the Hon'ble Tribunal in Appellant's own case for earlier AYs. 6.1. Notwithstanding and without prejudice to the ground that BLT is not a statutory method, AO / TPO have erred in arbitrarily selecting the improper company namely, Bharat IT Services Limited for the purposes of BLT without appreciating that the same is functionally not comparable. Further, DRP erred in summarily upholding the order of AO / TPO. 6.2. Notwithstanding and without prejudice to the ground that BLT is not a statutory method, AO / TPO have incorrectly computed the AMP/Sales ratio of companies, namely, (i) Idea Telesystems Limited, (ii) Savex Computers Limited, and (iii) Bharat IT Services Limited. 7. That on facts and circumstances of the case and in law, the AO / DRP / TPO have erred in making an adjustment in respect of alleged intern....
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....rchased and cleared during the subject year. 12. That on the facts and circumstances of the case and in law, the AO have erred in levying / charging interest under sections 234B and 234C of the Act. Each of the above grounds are independent and without prejudice to the other grounds of appeal preferred by the Appellant. The Appellant prays for leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before, or at, the time of hearing of the appeal. 3. Both the appeals are having identical grounds in respect of challenging the Assessment Order on the ground that the same is bad in law and void-abinitio. Therefore, we are firstly taking up facts for A.Y. 2012-13. During the relevant assessment year Nikon India Private Limited, i.e., the assessee company was a wholly owned subsidiary of Nikon Corporation, Japan. The assessee company is inter-alia engaged in import, sales and distribution for Nikon Imaging products in India through network of local distributors. The assessee filed its return of income declaring income of Rs. 5,42,98,030. The case of the assessee was selected for scrutiny under Section 143(3) of the Act. The assessee had dis....
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....n the Transfer Pricing order dated 28.01.2016. Thereafter, the Assessing Officer passed the final assessment order dated 17.01.2017 confirming the additions made by the TPO and assessed the income of the assessee at Rs. 57,32,67,720/- as against the returned income of Rs. 5,42,98,030/-, thereby making a TP adjustment of Rs. 51,89,69,687/-. 4. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 31.03.2017 remanded the matter back to the files of the TPO with following directions: * The Tribunal restored the legal question on 'determination whether alleged excessive AMP expenditure incurred is an international transactions or not' in light of the ratio of judgments of the Hon'ble Delhi High Court in various cases; * In case the international transaction is proved to be in existence, the Tribunal directed the TPO to determine the ALP of such international transaction following the judgments of jurisdictional High Court; * The Tribunal further directed the Assessing Officer to follow directions of the DRP regarding AMP intensity adjustment. Also, the Tribunal in para 20 of the order categorically direct....
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....e basis using Intensity approach was made by TPO at Rs. 1,59,39,195/-. Pursuant to the above, the Assessing Officer passed the final assessment order dated 18.10.2019, wherein, the Assessing Officer did not make any addition on substantive basis, but straight away made an addition on protective basis. The Assessing Officer assessed the income as under:- Particulars Amount (in INR) Returned income 5,42,98,030 Additions: TP adjustment on account of AMP expenditure (on protective basis) 1,18,49,05,211 Assessed Income 1,23,92,03,241 Rounded off 1,23,92,03,240 6. Being aggrieved by the assessment order, the assessee filed the present appeal. 7. As regards to Ground No. 1, the Ld. AR submitted that the same is general in nature. As regards to Ground Nos. 2 and 2.1, the Ld. AR submitted that the assessment order passed by the Assessing Officer in remand proceedings is bad in law and liable to be quashed. The Ld. AR submitted that the assessment order dated 18.12.2018 was passed by the Assessing Officer along with notices under Section 156 and 274 read with Section 271(1)(c) of the Act. The assessment order, thus was passed in violation of Section 144C of the Act in as much as....
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.... in No. 16694/2013, vide order dated 27th September 27, 2013 * International Air Transport Association vs DCIT: [2016] 290 CTR 46 (Bombay) * PCIT vs Andrew Telecommunications (P.) Ltd: ITA No. 144 of 2017 (Bombay) * Turner International India (P.) Ltd. v. Dy. CIT [2017] 398 ITR 177 (Delhi) * CIT v. C-Sam (India) (P.) Ltd: [2017] 398 ITR 182 (Gujarat) * ACIT vs Vijay Television (P) Ltd.: [2018] 407 ITR 642 (Madras) In view of the above, the Ld. AR submits that the order dated 18.12.2018, passed by the Assessing Officer ignoring the statutory provisions of section 144C of the Act, deserves to be quashed. 8. The Ld. DR relied upon the Assessment Order and submitted that the order passed by the Assessing Officer is just and valid as per Section 144C of the Income Tax Act, 1961. 9. We have heard both the parties and perused all the relevant material available on record. As regards to Ground No. 1, the same is general in nature hence does not require any adjudication. As regards to Ground Nos. 2 and 2.1, it is pertinent to note that the Tribunal vide order dated 31.03.2017 remanded the matter back to the TPO/AO for fresh determination. Thus, as per Section 144C of the Act, i....