TaxTMI 
TaxTMI 
2020 (7) TMI 493
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....has raised following grounds of appeal: Each of the grounds 1 sub-grounds of appeal is independent 'and without prejudice to the other. 1. The Ld. Commissioner of Income-tax (Appeals) -17 ['CIT(A)'] grossly erred in law in holding that the penalty order dated 23.03.2016 passed by the Ld. Assessing Officer ('AO') under section 271AA of the Income-tax Act, 1961 ('Act') is a valid order even when - a. The show cause notice dated 12.03.2013 issued by the Ld. AO under section 274 of the Act was issued in a standard printed format without pointing out reasons for invoking penalty proceedings under section 271AA in the present case of Appellant; and b. That even impugned penalty order....
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....Appellant was under a bonafide belief that the provisions of section 92 of the Act are not applicable to the transaction between the Appellant and KEPTL based on which the Appellant did not maintain documentation as per section 920 of the Act and hence Appellant's case falls within the ambit of section 273B of the Act. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) gross erred in upholding the impugned penalty under section 271AA of the Act without appreciating that the Appellant furnished required documents and evidences in the course of proceedings so as to demonstrate that the transactions with respect to yarn brokerage commission rate was at arm's length and as per market rate of yarn brokerage....
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....g the Ld. AO's impugned penalty order without appreciating the fact that the Appellants quantum appeal before the Hon'ble Income Tax Appellate Tribunal ('ITAT') for the subject assessment year is pending for adjudication. 4. (a) On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in upholding the impugned penalty under section 271 BA of the Act without appreciating the fact that whether Kaybee Exim Pte. Ltd., Singapore ('KEPTL') and the Appellant are AEs is a debatable issue and where the Appellant follows one of the bonafide views relying on CBDT Circular and Memorandum explaining the provisions of the Finance Act 2002, the Appellant has a "reasonable cause" under section 273....
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.... of Rs. 79,321/- being 2% of the alleged international transaction of Rs. 39,66,063/- between assessee and KEPL and penalty under section 271BA of Rs. 100,000/-, vide order dated 23.03.2016. On appeal before learned CIT(A), both the orders for levying of penalty under section 271AA and 271BA was confirmed. Thus, in the aforesaid background both the appeals are filed before this Tribunal. 4. We have heard the submissions of the learned authorised representative (ld AR) for the assessee and the learned departmental representative (DR) for the revenue and perused the record carefully. At the outset of hearing the learned AR of the assessee submitted in quantum appeals before the Tribunal in ITA No. 2165/Mumbai/2015 dated 28th of 2020, the T....
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....inate bench of Tribunal in ITA No. 2165/Mumbai/2015 dated 20th February 2020, wherein it was held that the assessee is not AE of KEPL. The coordinate bench of Tribunal passed following order " 2. When this appeal was called out for hearing, learned senior counsel for the assessee submitted that though this appeal involves several legal issues, including the question on validity of the reassessment proceedings, the fundamental issue in this appeal deals with the question as to whether the assessee can be said to be an 'associated enterprises', within meanings assigned under section 92A, of Kaybee Exim Pte Ltd, a Singapore based entity, and, in the event of this issue being held in favour of the assessee, all other issues will be ....
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....etween the assessee company and its KE-S cannot be said to be that of the associated enterprises. The case of the revenue must, therefore, fail on this test. 19. In view of the above discussions, as also bearing in mind entirety of the case, we have to hold that the relationship between the assessee and the KE-S was not of the AEs, and, accordingly, no arm's length price adjustments could be made on the transactions between these two entities. Ground no. 3 is thus allowed, and, as a corollary thereto, the impugned ALP adjustment must, therefore, be deleted for this short reason alone. Ordered, accordingly. 20. As we have decided the appeal on the short issue, as discussed above, we see no need to deal with the other legal ....