GOCL Corporation Limited, Hyderabad v. Dy. Commissioner of Income Tax, Circle-2(2), Hyderabad

ITA 2012/Hyd/2017 | 2013-2014
Pronouncement Date: 11-05-2021 | Result: Partly Allowed

Appeal Details

RSA Number 201222514 RSA 2017
Assessee PAN AABCG8433B
Bench Hyderabad
Appeal Number ITA 2012/Hyd/2017
Duration Of Justice 3 year(s) 5 month(s) 6 day(s)
Appellant GOCL Corporation Limited, Hyderabad
Respondent Dy. Commissioner of Income Tax, Circle-2(2), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-05-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB-B
Tribunal Order Date 11-05-2021
Date Of Final Hearing 16-03-2021
Next Hearing Date 16-03-2021
Last Hearing Date 06-02-2019
First Hearing Date 18-11-2020
Assessment Year 2013-2014
Appeal Filed On 05-12-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 579/HYD/17 2012-13 GOCL CORPORATION LTD. HYDERABAD [PAN: AABCG8433B] DY.COMMISSIONER OF INCOME TAX CIRCLE-2(2) HYDERABAD 2012/HYD/17 2013-14 FOR ASSESSEE : SHRI Y. RA TNAKAR AR FOR REVENUE : S HRI Y.V.S.T.SAI CIT - DR DATE OF HEARING : 16 - 0 3 - 20 2 1 DATE OF PRONOUNCEMENT : 11 - 0 5 - 2021 O R D E R PER S.S.GODARA J.M. : THESE TWO ASSESSEES APPEALS FOR AYS.2012-13 & 2013 -14 ARISE AGAINST THE DCIT CIRCLE-2(2) HYDERABADS ASS ESSMENT DATED 30-01-2017 AND 28-09-2017 FRAMED IN FURTHERANCE TO THE DISPUTE RESOLUTION PANEL (DRP)-1 BENGALURUS D IRECTIONS DT.01-12-2016 AND 31-08-2017 IN F.NO.132 & 280/DRP-1 / BNG/2016-17 INVOLVING PROCEEDINGS U/S.143(3) R.W.S .92CA(4) R.W.S.144C AND 143(3) R.W.S.144C(5) R.W.S.144C(13) OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]; RESPECTIVELY . HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. WE NOW ADVERT TO THE ASSESSEES PLEADINGS IN BOTH TH ESE ASSESSMENT YEARS. ITS IDENTICAL FIRST GRIEVANCE IN A YS.2012-13 GROUND NOS.2 AND 3 AND 2 4 AND 5 TH SUBSTANTIVE GROUNDS IN AY.2013-14; CHALLENGES CORRECTNESS OF THE LEARNED LO WER ITA NOS.579/HYD/2017 & 2012/HYD/2017 :- 2 -: AUTHORITIES ACTION MAKING ARMS LENGTH PRICE (ALP) ADJUSTMENTS OF RS.11 64 240/- AND RS.31 85 162/- PER TAINING TO CORPORATE GUARANTEES; ASSESSMENT YEAR-WISE; RESPECTIV ELY. 3. LEARNED COUNSELS FIRST AND FOREMOST ARGUMENT IS THA T A CORPORATE GUARANTEE IS A SHAREHOLDERS ACTIVITY WHICH HAS BEEN WRONGLY TREATED AS AN INTERNATIONAL TRANSACTION U/S.92B READ WITH EXPLANATION INSERTED BY THE FINANCE ACT 2012 WITH RETROSPECTIVE EFFECT FROM 01-04-2002. HE NEXT SOUGHT T O DRAW A DISTINCTION BETWEEN THE TWIN IMPUGNED ASSESSMENT Y EARS THAT SUCH A CORPORATE GUARANTEE FURNISHED IN AY.2012-13 COULD NOT FALL U/S.92B OF THE ACT SINCE THE FOREGOING EXPLANATION CAME TO BE INSERTED VIDE FINANCE ACT 2012 AS AGAINST FINANCIAL YEAR INVOLVED HEREIN 2011-12 ONLY. HE HAS ALSO QUOTED (2015) 63 TAXMANN.COM 353 (AHD-TRIB) MICR O INK LIMITED VS. ACIT ADDL.CIT VS. BHARTI AIRTEL LTD. VS. A CIT (2014) 63 SOT 113 (DELHI) AND DCIT VS. M/S.MANKASIA LTD. ITA NOS.208-209/KOL/2018 DT.30-11-2018. WE FIND NO MERIT IN ASSESSEES INSTANT LEGAL ARGUMENT IN PRINCIPLE SINC E HON'BLE MADRAS HIGH COURTS LATEST DECISION IN REDINGTON INDIA PVT. LTD. VS. DCIT TAX APPEAL NO.590 AND 591 OF 2019 D T.10-12- 2020 HAS SETTLED THE LAW THAT A CORPORATE GUARANTEE INDEE D FORMS AN INTERNATIONAL TRANSACTION AND COVERED BY THE EXPLANATION TO SECTION 92B WITH RETROSPECTIVE EFFECT AS WE LL. THE ASSESSEES FIRST AND FOREMOST LEGAL ARGUMENT FAIL S THEREFORE. 4. NEXT COMES QUANTIFICATION OF THE IMPUGNED CORPORATE GUARANTEE COMMISSION. THE ASSESSEE ADMITTEDLY ADOPTED 0.5% COMMISSION RATE AS AGAINST THAT ADOPTED @1.8% IN THE ITA NOS.579/HYD/2017 & 2012/HYD/2017 :- 3 -: TRANSFER PRICING OFFICERS (TPO) ORDER. THE FACT AL SO REMAINS THAT THE DRPS ORDER IN AY.2013-14 HAS ADOPTED SIMILAR CORPORATE GUARANTEE COMMISSION @1.3% ONLY. 4.1. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT TPOS ORDER HAS GONE BY THE MINISTRY OF FINANCE GOVE RNMENT OF INDIAS GOVERNMENT GUARANTEE POLICY IN SEPTEMBER 2 010 AND STATE BANK OF INDIAS RATES THAN FINING ANY INDEPE NDENT COMPARABLE IN THE VERY SEGMENT. THE FACT ALSO REMAIN S THAT WE DO NOT SEE ANY COMPARABLE COMING FROM THE ASSESSEE S SIDE AS WELL AS ITS THRUST ALL ALONE HAS BEEN TO CONTEST THE L EARNED LOWER AUTHORITIES ACTION TREATING SUCH A CORPORATE GUAR ANTEE AS AN INTERNATIONAL TRANSACTION IN ABOVE TERMS ONLY. 4.2. FACED WITH THIS SITUATION WE DEEM IT APPROPRIATE THAT A LUMPSUM CORPORATE GUARANTEE COMMISSION OF 0.9% IN THE GIVEN FACTS AND CIRCUMSTANCES WOULD BE JUST AND PROPE R IN BOTH THE IMPUGNED ASSESSMENT YEARS I.E. AYS.2012-13 A ND 2013-14. WE ORDER ACCORDINGLY. NECESSARY COMPUTATI ON SHALL FOLLOW. IT IS FURTHER MADE CLEAR THAT OUR IMPUGNED ESTI MATION SHALL NOT BE TAKEN AS A PRECEDENT IN ANY OTHER CASE. 5. WE STAY BACK IN AY.2012-13 AND NOTICE THAT THE ASSESSEES SECOND SUBSTANTIVE GROUND SEEKS TO REVERSE BOTH THE LOWER AUTHORITIES ALLEGED ACTION DENYING CARRY F ORWARD SET- OFF LOSSES UNDER THE HEAD CAPITAL GAINS PERTAINING TO AY.2010-11. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THIS TRIBUNALS ORDER IN ASSESSEES APPEAL ITA NO.401/HYD/2016 (AY.2011-12) HAS RESTORED THE ISSUE O F CARRIED FORWARD OF SHORT TERM LOSSES PERTAINING TO EARL IER ASSESSMENT YEARS BACK TO THE ASSESSING OFFICER. THE SA ID ORDER ITA NOS.579/HYD/2017 & 2012/HYD/2017 :- 4 -: HAS INDEED NOT BEEN CONSIDERED IN ANY OF THE LOWER AP PELLATE AUTHORITIES ADJUDICATION(S). WE THEREFORE PROCEED ON THE VERY LINE OF ACTION IN THE IMPUGNED ASSESSMENT YEAR AS WEL L BY ADOPTING JUDICIAL CONSISTENCY AND DIRECT THE ASSESSING OFFICER TO VERIFY ALL THE NECESSARY FACTS IN THE LIGHT OF THE CON SEQUENTIAL ADJUDICATION IN THE EARLIER ASSESSMENT YEAR(S). ORDER ED ACCORDINGLY. THIS SECOND SUBSTANTIVE GROUND IS TAKEN AS ALLOWED FOR STATISTICAL PURPOSES. 6. THE ASSESSEES THIRD AND LAST SUBSTANTIVE GROUND IN AY.2012-13 IS THAT THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN UPHOLDING CAPITAL GAINS ADDITION OF RS.21 02 947/-. THIS REVENUES CASE ON THE OTHER HA ND IN LIGHT OF THE DRPS DIRECTIONS IN PARA 2.3 IS THAT THE P ANEL HAS ALREADY DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRESPONDING CLAIM. THE ASSESSING OFFICERS CONSEQ UENTIAL ASSESSMENT DT.30-01-2017 HOLDS THAT SUCH AN ADDITIONAL CLAIM COULD NOT BE ENTERTAINED IN ABSENCE OF A REVISED RETURN AS PER HON'BLE APEX COURTS DECISION IN GOETZE (INDIA) LTD. V S. CIT (2006) 284 ITR 323 (SC). WE FIND NO MERIT IN THE REV ENUES FOREGOING ARGUMENT. THEIR LORDSHIPS HAVE MADE IT CLEA R IN PARA 4 THAT THE SAME ONLY APPLIES ON THE ASSESSING OFFICERS JURISDICTION TO ENTERTAIN A NEW CLAIM THAN IMPINGING UPO N THE APPELLATE AUTHORITIES SIMILAR JURISDICTION TO ALLOW THE CONCERNED PARTIES TO PLEAD NEW GROUNDS. WE THEREFORE DIRECT THE ASSESSING OFFICER TO ADJUDICATE THE ASSESSEES IMPU GNED CAPITAL GAINS ADDITION GRIEVANCE ON MERITS AS PER LAW WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING. THE ASSESS EES FORMER APPEAL ITA NO.579/HYD/2017 IS PARTLY ALLOWED IN ABOV E TERMS. ITA NOS.579/HYD/2017 & 2012/HYD/2017 :- 5 -: 7. WE ARE NOW LEFT WITH AY.2013-14 APPEAL IN ITA NO.2012/HYD/2017S LATTER SUBSTANTIVE GROUND THAT THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FA CTS IN NOT GIVING TAX PAIDS CREDIT TO THE TUNE OF RS.3 53 84 355/ - ON DISTRIBUTED PROFITS U/S.115-O OF THE ACT. 7.1. LEARNED COUNSEL STATED VERY FAIRLY THAT THE ASSESS EE NO MORE WISHES TO PRESS FOR THE INSTANT LATTER GROUNDS AS TH E DUE CREDIT IN ISSUE ALREADY STANDS GIVEN IN LATTER ASSESSME NT YEARS. THIS LATTER APPEAL ITA NO.2012/HYD/2017 IS ALSO ACCEP TED IN PART IN FOREGOING TERMS. NECESSARY COMPUTATION SHALL FOLLOW AS PER LAW. 8. THESE TWO ASSESSEES APPEALS ARE PARTLY ALLOWED I N ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE R ESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD DATED: 11-05-2021 TNMM ITA NOS.579/HYD/2017 & 2012/HYD/2017 :- 6 -: COPY TO : 1.GOCL CORPORATION LIMITED KUKATPALLI PB NO.01 S ANATH NAGAR (IE)(PO) HYDERABAD. 2.THE DY.COMMISSIONER OF INCOME TAX CIRCLE-2(2) HYDERABAD. 3.DISPUTE RESOLUTION PANEL (DRP) BENGALURU. 4.DIRECTOR OF INCOME TAX (IT & TP) HYDERABAD. 5.ADDL. COMMISSIONER OF INCOME TAX (TRANSFER PRICIN G) HYDERABAD. 6.D.R. ITAT HYDERABAD. 7.GUARD FILE.