TRUETZSCHLER INIDA LTD ( FORMELRY KNOWN AS M.S, TRUMAC ENGINEERING CO. P.LTD), MUMBAI v. DCIT RG 2(3), MUMBAI

ITA 7980/MUM/2010 | 2006-2007
Pronouncement Date: 23-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 798019914 RSA 2010
Assessee PAN AAACT2153N
Bench Mumbai
Appeal Number ITA 7980/MUM/2010
Duration Of Justice 2 year(s) 8 month(s) 4 day(s)
Appellant TRUETZSCHLER INIDA LTD ( FORMELRY KNOWN AS M.S, TRUMAC ENGINEERING CO. P.LTD), MUMBAI
Respondent DCIT RG 2(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted K
Tribunal Order Date 23-07-2013
Date Of Final Hearing 22-07-2013
Next Hearing Date 22-07-2013
Assessment Year 2006-2007
Appeal Filed On 19-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K MUMBAI . . . . . '# ' $ % BEFORE SHRI I.P. BANSAL JM AND SHRI P.M.JAGTAP AM . / ITA NO.7980/MUM/2010 & & & & ' ' ' ' / ASSESSMENT YEAR 2006-07 M/S. TRUETZSCHLER INDIA PVT. LTD. (FORMERLY KNOWN AS M/S. TRUMAC ENGINEERING CO. PVT. LTD.) 43 DR. V.B.GANDHI MARG FORT MUMBAI - 400001 & & & & / VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(3) MUMBAI. ( '# ./ ) ./ PAN/GIR NO. : PAN: AAACT 2153N ( (* / APPELLANT ) .. ( + (* / RESPONDENT ) (* - ' / APPELLANT BY: SHRI NITESH JOSHI + (* . - ' / RESPONDENT BY : SHRI AJEET KUMAR JAIN & . # / DATE OF HEARING : 23/07/2013 /0' . # / DATE OF PRONOUNCEMENT : 23/07/2013 '1 / O R D E R PER I.P.BANSAL J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER PASSED BY THE A.O UNDER SECTION 143(3) OF THE INCO ME TAX ACT 1961(THE ACT) DATED 22/9/2010 IN PURSUANCE TO DIRECTIONS ISSUED B Y DRP VIDE THEIR ORDER DATED 1/9/2010. THE GROUNDS OF APPEAL READ AS UNDE R: 1. LEARNED ASSESSING OFFICER (AO) HAS ERRED IN PASS ING ORDER UNDER SECTION 143(3) READ WITH SECTION 144C OF THE ACT. APPELLANT HAVING WITHDRAWN APPLICATION BEFORE THE DISPUTE RESOLUTION PANEL TH E ASSESSMENT ORDER OUGHT TO HAVE BEEN PASSED U/S 143(3) OF THE ACT. . / ITA NO.7980/MUM/2010 & & & & ' ' ' ' / ASSESSMENT YEAR 2006-07 2 2. WHILE GIVING DIRECTION U/S 144C(5) OF THE ACT T HE HONOURABLE DISPUTE RESOLUTION PANEL (DRP) HAS ERRED IN DIRECTING THE A O TO PASS THE ASSESSMENT ORDER IN CONSONANCE WITH THE DRAFT ASSESSMENT ORDER ALREADY FRAMED. DRP OUGHT TO HAVE PERMITTED THE ASSESSEE TO WITHDRAW TH E OBJECTIONS FILED AND DIRECTED THE AO TO PASS THE ORDER U/S 143(3) OF THE ACT. 3. WITHOUT PREJUDICE TO 1 ABOVE THE HONOURABLE DRP HAS ERRED IN NOT DEALING WITH THE OBJECTIONS FILED BY THE APPELLANT ON THE M ERITS OF VARIOUS OBJECTIONS RAISED. IN THE EVENT DRP NOT PERMITTING THE APPELL ANT TO WITHDRAW THE OBJECTIONS IT OUGHT TO HAVE PASSED DIRECTIONS ON V ARIOUS OBJECTIONS FILED BY THE APPELLANT ON MERITS AND DIRECTED THE AO TO DELETE T HE ADDITIONS MADE. 4. WITHOUT PREJUDICE TO THE ABOVE THE AO/DRP HAS E RRED IN - I) MAKING ADJUSTMENT OF RS. 3 84 640/- TO ARMS LEN GTH PRICE DETERMINED BY THE APPELLANT IN RESPECT OF SALE OF HP CARD MACHINE TO TRUETZSCHELER TEXTILE MACHINERY (SHANGHAI) CO. LTD. AN ASSOCIATE ENTERPR ISE (AE). ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE PRICE CHARGED TO AE BEING ARMS LENGTH PRICE ADDITION OF RS. 3 84 640 MADE OUGHT TO BE DELETED. II) DISALLOWING A SUM OF RS.18 02 161/- U/S.14A AS AGAINST RS.3 37 293/- DISALLOWED BY THE APPELLANT. ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE THE ADDITIONAL DISALLOWANCE OF RS.14 64 868/- OUGHT TO BE DELETED. III) DISALLOWING DISCOUNT OF RS. 8 00 975/- ON THE GROUND THAT IT IS NOT RELATED TO THE BUSINESS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION MADE OUGHT TO BE DELETED. IV) NOT DEALING WITH THE CLAIM OF ASSESSEE ON ALLOW ING SALES DISCOUNT OF RS. 6 15 516/. THE SAID CLAIM MADE BY THE APPELLANT DUR ING THE COURSE OF ASSESSMENT BEING ALLOWABLE AS EXPENSES OUGHT TO B E ALLOWED. 2. AT THE OUTSET ADDRESSING TO GROUND NO.1 2 & 3 I T WAS SUBMITTED BY LD. A.R THAT BEFORE DRP THE ASSESSEE HAS FILED AN APPLI CATION TO WITHDRAW THE OBJECTION. HOWEVER DRP REFERRING TO THE LETTER ISSUED BY CBDT HAS OBSERVED THAT THE WITHDRAWAL OF OBJECTION AFTER FIL ING THE OBJECTIONS BEFORE DRP IS NOT PERMISSIBLE. WITH THESE OBSERVATIONS DRP HAS DIRECTED THE AO TO PASS ASSESSMENT ORDER IN CONSONANCE WITH THE DRAFT ASSESSMENT ORDER WHICH WAS SUBJECT MATTER OF OBJECTION BEFORE DRP 3. IT WAS SUBMITTED BY LD. AR THAT AS DRP DID NOT PASS ANY ORDER ON MERITS ON THE OBJECTIONS FILED BY THE ASSESSEE THE MATTER MAY BE SENT BACK TO DRP WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUPPORT ITS OBJECTIONS AND THEN PASS A SPEAKING ORDER ON THE OB JECTIONS RAISED BY THE . / ITA NO.7980/MUM/2010 & & & & ' ' ' ' / ASSESSMENT YEAR 2006-07 3 ASSESSEE. HE SUBMITTED THAT THE MANNER IN WHICH DRP HAS PASSED THE ORDER HAS PREVENTED THE ASSESSEE FROM CONTESTING TH E ADDITIONS ON MERITS EVEN BEFORE TRIBUNAL AS NONE OF THE ISSUE HAS BEEN DECID ED BY WAY OF SPEAKING ORDER. THE AO IS UNDER AN OBLIGATION TO PASS ORDER AS PER DIRECTIONS OF DRP THEREFORE IN THE INTEREST OF JUSTICE THE MATTER MA Y BE RESTORED BACK TO THE FILE OF DRP. 4. ON THE OTHER HAND LD. DR RELIED UPON THE ORDERS PASSED BY A.O AND LD. DRP. 5. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. THE ASSESSEE HAD FILED A LETTER BEFORE DRP FOR WITHDRAWING THE OBJECTIONS. IF DRP WAS OF THE VI EW THAT ASSESSEE DID NOT HAVE OPTION TO WITHDRAW THE OBJECTIONS ONCE THEY HAVE BEEN FILED THEN AS PER RULES OF NATURAL JUSTICE IT WAS REQUIRED TO ADJUDIC ATE OBJECTIONS FILED BY THE ASSESSEE. INSTEAD LD. DRP HAS DIRECTED THE AO TO PA SS ASSESSMENT ORDER IN CONSONANCE WITH THE DRAFT ASSESSMENT ORDER. THIS A CTION OF DRP HAS PREVENTED THE ASSESSEE FROM AVAILING THE OTHER ALTE RNATIVE OF FILING THE APPEAL BEFORE LD. CIT(A). IF THAT DOOR IS CLOSED THEN MAT TER HAS TO BE FIRST ADJUDICATED EITHER BY DRP OR BY LD. CIT(A) AND THEN APPEAL CA N BE FILED BEFORE THE TRIBUNAL. NOW WHAT IS AVAILABLE BEFORE THE TRIBUNA L IS THE ORDER OF DRP WHICH HAS NOT ADJUDICATED THE ISSUES ON MERITS. TH E DIRECTION OF DRP TO AO IS BINDING ON AO SO ASSESSEE ALSO COULD NOT REPRESE NT BEFORE AO AGAINST THE ADDITIONS MADE IN THE DRAFT ORDER.. CONSIDERING AL L THESE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THA T THE REQUEST OF THE ASSESSEE HAS TO BE ACCEPTED IN THE INTEREST OF JUS TICE. THEREFORE WE RESTORE THE ISSUE RAISED IN THE PRESENT APPEAL ON THE MERIT S OF ADDITIONS TO THE FILE OF DRP WITH A DIRECTION TO ADJUDICATE ALL THE ISSUES O N THE OBJECTIONS FILED BY THE ASSESSEE AS PER LAW BY WAY OF SPEAKING ORDER AFTER GIVING THE ASSESSEE A . / ITA NO.7980/MUM/2010 & & & & ' ' ' ' / ASSESSMENT YEAR 2006-07 4 REASONABLE OPPORTUNITY OF HEARING. WITH THESE DIR ECTIONS THE MATTER IS RESTORED BACK TO THE FILE OF DRP. 6. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/07/201 3 '1 . /0' #' 2 3&4 23 /07/2013 0 . % SD/- SD/- ( . . P.M.JAGTAP ) ( . . / I.P. BANSAL ) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 3& DATED 23/07/2013 '1 '1 '1 '1 . .. . + ;< + ;< + ;< + ;< ='<' ='<' ='<' ='<' / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. + (* / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5.