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These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.

07-01-2020, Imperial Mark Trade, Section 144C(13), 92CA, Tribunal Mumbai

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3 weeks 4 hours ago #11958 by amit
Section - 144C(13), 92CA, 263
Order Date - 07-01-2020
Favouring - Revenue
Court - Tribunal Mumbai
Appellant - Imperial Mark Trade (I) Pvt. Ltd
Respondent - DCIT
Justice - SHAMIM YAHYA AM & PAWAN SINGH JM
Citation - 120Taxpundit63
Appeal No. - ITA no.1453/Mum./2017
Asstt. Year - 2013-14

Order

PER : SHAMIM YAHYA

This is an appeal by the assessee against the order of the Assessing Officer dated 29/03/2016 u/s.143(3) r.w.s. 144C(1) of the Income Tax Act, 1961 pursuant to the direction of the Dispute Resolution Panel dated 23/12/2016.

2. The grounds of appeal read as under:-

“Being aggrieved by the order of DCIT, Central Circle - 7(2), Mumbai ('learned Assessing Officer') issued under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 ('Act'), this appeal petition is submitted on the following grounds which it is prayed may be considered independently without prejudice to one another;

1.0) Jurisdiction exercised by the learned Transfer Pricing Officer is bad in law

On the facts and circumstances of the case and in law the Hon'ble DRP-1, Mumbai ('DRP') erred in confirming the determination of the Arm's Length Price ('ALP') at NIL by the learned Transfer Pricing Officer ('TPO'J in his order under section 92CA by treating the specified domestic transactions ('SDT'J as bogus and sham transactions. The reference made to the learned TPO by the learned Assessing Officer under section 92CA is merely for the purpose of verification and determinat on of the ALP of the SDT and therefore, the learned TPO exceeded his jurisdiction by characterizing the SDT as bogus transactions without undertaking any benchmarking / functional analysis of the same. Therefore, the transfer pricing adjustments aggregating to Rs.245,45,18,050 confirmed by Hon'ble DRP is bad in law and needs to be deleted.

2.0) Disallowance / t ansfer pricing adjustment of high seas purchases of Crude Palm Oil amounting to Rs. 1,22,70,68,280

2.1) On the facts and circumstances of the case and in law, the Hon'ble DRP er ed in rejecting the objection raised by the Appellant that the date of entering into contract for purchase of crude palm oil and the actual date of import mentioned in the tax invoice were interchanged by the learned TPO based on which the purchases were held to be non-genuine and sham transactions.

2.2) Hon'ble DRP erred in confirming that the purchase of crude palm oil was in the nature of bogus purchase merely based on the observation of learned TPO in relation to the dates of purchases, ignoring the submission and following documentary evidences produced by the Appellant before the learned TPO in support of the genuineness of the SDT:

a) Copies of contract of purchases
b) Copies of tax invoices
c) Copies of bill of lading
d) Confirmations from the parties to whom the goods so imported were subsequently sold on high seas basis
e) Quantitative analysis and reconciliation of purchase and sales
f) One-to-one nexus of purchases vis-a-vis sales

Therefore, the transfer pricing adjustment on purchase of crude palm oil amounting to Rs.1,22,70,68,280 confirmed by Hon'ble DRP is bad in law and needs to be deleted.

3.0) Disallowance / transfer pricing adjustment of purchase of quar gum (split) amounting to Rs. 1,00,82,50,230

3.1) On the facts and circumstances of the case and in law, the Hon'ble DRP erred in dismissing the objection raised by the Appellant that the learned TPO has treated the date of entering into contract for purchase of guar gum i.e. 1 March 2013 as the actual date of purchase instead of the date of deliveryand purchase as mentioned in the tax invoice i.e 31 March 2013 based on which the purchases were held to be non- genuine and sham transactions.

3.2) Hon'ble DRP erred in confirming that the purchase of guar gum was in the nature of bogus purchase merely based on the observation of learned TPO in relation to the dates of purchases, ignoring the submissions and following documentary evidences produced by he Appellant in support of the genuineness of the SDT;

a) Copies of tax invoices of buyer (appellant) as well as the seller i.e. Stride Multitrade Pvt Ltd

b) Copy of acknowledged intimations to the Godown in relation to transfer of goods by the buyer (Appellant) as well as the seller (Stride Multitrade Pvt Ltd)

c) Quantitative analysis and reconciliation of purchase and sales Therefore, the transfer pricing adjustment on purchase of guar split (gum) amounting to Rs. 1,00,82,50,230 confirmed by Hon'ble DRP is bad in law and needs to be deleted.

4.0) Disallowance / transfer pricing adjustment of sales return of quar seeds amounting to Rs. 21,91,99,540

On the facts and circumstances of the case and in law, the learned Assessing Officer erred in making protective addition of the sales returns amounting to Rs. 21,91,99,540 by stating that the learned TPO has not verified the details of sales return upon reference made to him even after specific direction issued by the Hon'ble DRP. Accordingly, the transfer pricing adjustment of sales return

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