Dy. Commissioner of Income Tax , Circle-16(1), Hyderabad v. Nagarjuna Fertilizers and Chemicals Limited , Hyderabad

ITA 1268/Hyd/2019 | 2014-2015
Pronouncement Date: 05-05-2021 | Result: Dismissed

Appeal Details

RSA Number 126822514 RSA 2019
Assessee PAN ITANO1268O
Bench Hyderabad
Appeal Number ITA 1268/Hyd/2019
Duration Of Justice 1 year(s) 8 month(s) 22 day(s)
Appellant Dy. Commissioner of Income Tax , Circle-16(1), Hyderabad
Respondent Nagarjuna Fertilizers and Chemicals Limited , Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 05-05-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB-B
Tribunal Order Date 05-05-2021
Date Of Final Hearing 28-04-2021
Next Hearing Date 28-04-2021
Last Hearing Date 03-03-2021
First Hearing Date 23-02-2021
Assessment Year 2014-2015
Appeal Filed On 13-08-2019
Judgment Text
ITA NO 1268 OF 2019 NAGARJUNA FERTILIZERS AND CHE MICALS LTD HYDERABAD PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO.1268/HYD/2019 ASSESSMENT YEAR: 2014-15 DY. COMMISSIONER OF INCOME TAX CIRCLE 16(1) HYDERABAD VS. M/S. NAGARJUNA FERTILIZERS AND CHEMICALS LTD HYDERABAD PAN:AADCK1533E (APPELLANT) (RESPONDENT) REVENUE BY: SRI ROHIT MUJUMDAR DR ASSESSEE BY : SRI C.S. SUBRAMANYAM DATE OF HEARING: 28/04/2021 DATE OF PRONOUNCEMENT: 05/05/2021 ORDER PER SMT. P. MADHAVI DEVI J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2014-15 AGAIN ST THE ORDER OF THE CIT (A)-4 HYDERABAD DATED 29.05. 2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY FILED ITS RETURN OF INCOME FOR THE A.Y 2014-15 ON 2 9.11.2014 ADMITTING LOSS INCOME OF RS.200 95 68 402/-. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT THE A SSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS AE AND THEREFORE DETERMINATI ON OF THE ALP OF THE SAID TRANSACTIONS WAS REFERRED TO THE TPO. T HE TPO OBSERVED THAT THE ASSESSEE HAS GIVEN AN ADVANCE OF RS.20 64 413/- TO ITS SUBSIDIARY DURING THE YEAR AN D THERE WAS ALSO A CLOSING BALANCE OF ADVANCE TO SUBSIDIARY OF ITA NO 1268 OF 2019 NAGARJUNA FERTILIZERS AND CHE MICALS LTD HYDERABAD PAGE 2 OF 3 RS.34 88 85 713/-. THE TPO PROPOSED AN INTEREST @ 1 4.75% ON THE ADVANCES GIVEN BY THE ASSESSEE TO ITS SUBSIDIAR Y AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO DIRECTED THE ASSESSING OFFICER TO ADOPT THE AVERAGE LIBOR PERCENTAGE OF INTEREST ON THE ADVANCE GIVEN TO ITS SUBSIDIARIES. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT (A) IS JUSTIFIED IN DETERMINING THE I NTEREST ON LOANS GIVEN BY THE TAXPAYER TO ITS FOREIGN ASSOCIAT E ENTERPRISES AT AVERAGE LIBOR RATE EVEN THOUGH THE TAXPAYER PAID INTEREST TO BANKS AT THE AVERAGE RATE OF 12.15%. 2. ANY OTHER GROUND THAT MAY BE RAISED AT THE TIME OF HEARING. 3. THE LEARNED DR RELIED UPON THE ORDERS OF THE ASS ESSING OFFICER WHILE THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDERS OF THE CIT (A) AND ALSO PLACED RELIANCE UPON THE FOLLOWING CASELAW: I ) ITA NO.93 & 2031/HYD/2017 IN ASSESSEES OWN CASE FOR A.Y 2012-13 & 2013-14. II) HEAD NOTE OF CASE BS LTD (2019) 102 TAXMANN.COM 458 (HYD.TRIB) III) HEAD NOTE OF CASE HINDUJA GLOBAL SOLUTIONS LTD (2013) 35 TAXMANN.COM 348 (MUMBAI TRIB.) IV) HEAD NOTE OF CASE COTTON NATURALS (I) (P) LTD ( 2013) 40 TAXMANN.COM 226 (DEL.TRIB.) V) ORDER IN CASE OF GEODESIC LTD (2015) 62 TAXMANN. COM 383 (MUMBAI TRIB.) VI) HEAD NOTE OF CASE SIVA INDUSTRIES & HOLDINGS LT D (2012) 26 TAXMANN.COM 96 (CHENNAI TRIB.) VII) HEAD NOTE OF CASE TATA AUTOCOMP SYSTEMS LTD (2 015) 56 TAXMANN.COM 206 (BOMBAY HIGH COURT) ITA NO 1268 OF 2019 NAGARJUNA FERTILIZERS AND CHE MICALS LTD HYDERABAD PAGE 3 OF 3 VIII) ORDER IN CASE OF VAIBHAV GEMS LTD (2018) 99 T AXMANN.COM 2 (S.C) 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE FIND THAT IN A NUMBER OF CASES INCLUD ING THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR TH E ASSESSEE IT HAS BEEN HELD THAT WHERE AN ASSESSEE ADVANCES LOANS TO ITS AES OUTSIDE INDIA RATE OF INTEREST WAS TO BE DETERMINE D ON THE BASIS OF RATE PREVAILING IN THE COUNTRY WHEREIN THE LOAN HAS BEEN CONSUMED AND IT IS NOT TO BE DETERMINED AT A RATE P REVAILING IN INDIA. WE FIND THAT THE CIT (A) HAS FOLLOWED THE PR ECEDENTS ON THE ISSUE AND HAS HELD THAT THE LIBOR+ BASIS POINTS IN THE RATE OF INTEREST APPLICABLE IN THIS CASE. THEREFORE WE FIN D NO REASON TO INTERFERE WITH THE ORDERS OF THE CIT (A). 5. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH MAY 2021. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 5 TH MAY 2021. VINODAN/SPS COPY TO: S.NO ADDRESS ES 1 DY. CIT CIR CLE 16(1) 1 ST FLOO R B BLOCK IT TOWERS AC GAURDS MASAB TANK HYDERABAD 2 M/S. NAGARJUNA FERTILIZERS & CHEMICALS LTD 8-2-2 48 PUNJAGUTTA NAGARJUNA HILLS HYDERABAD 500082 3 CIT (A) - 4 HYDERABAD 4 PR. CIT - 4 HYDERABAD 5 DR ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER