M/S. MONDELEZ I. FOODS P. LTD ( FORMERLY KNOWN AS CADBURY INDIA LTD ), MUMBAI v. ADDL CIT RG 5(1), MUMBAI

MA 92/MUM/2021 | 2009-2010
Pronouncement Date: 31-08-2021 | Result: Allowed

Appeal Details

RSA Number 9219924 RSA 2021
Assessee PAN AAACC0460H
Bench Mumbai
Appeal Number MA 92/MUM/2021
Duration Of Justice 5 month(s) 4 day(s)
Appellant M/S. MONDELEZ I. FOODS P. LTD ( FORMERLY KNOWN AS CADBURY INDIA LTD ), MUMBAI
Respondent ADDL CIT RG 5(1), MUMBAI
Appeal Type Miscellaneous Application
Pronouncement Date 31-08-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 31-08-2021
Last Hearing Date 04-06-2021
First Hearing Date 04-06-2021
Assessment Year 2009-2010
Appeal Filed On 26-03-2021
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH MUMBAI BEFORE SHRI VIKAS AWASTHY JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN ACCOUNTANT MEMBER M.A. NO. 9 2 /MUM./2021 ( ARISING OUT OF ITA NO. 2214 / MUM . / 20 1 4 ) ( ASSESSMENT YEAR : 20 09 10 ) M/S. MONDELEZ INDIA FOODS PVT. LTD. (FORMERLY KNOWN AS CADBURY INDIA LTD.) CADBURY HOUSE 19 BHULABHAI DESAI RD. MUMBAI 400 026 PAN AAACC0460H . APPLICANT (ORIGINAL RESPONDENT) V/S A DDL . COMMISSIONER OF INCOME TAX RANGE 5(1) MUMBAI . RESPONDEN T (ORIGINAL APPELLANT) ASSESSEE BY : SHRI JEHANGIR MISTRI REVENUE BY : SHRI SUSHIL KUMAR MISHRA DATE OF HEARING 25 . 0 6 .20 21 DATE OF ORDER 31.08.2021 O R D E R PER S. RIFAUR RAHMAN A.M. B Y THIS MISC. APPLICATION THE ASSESSEE SEEKS RECTIFICATION IN THE ORDER DATED 17 TH FEBRUARY 2021 PASSED IN ITA NO. 2214/MUM./2014 FOR THE ASSESSMENT YEAR 20 09 10. 2. THE ASSESSEE HAS FILED THE PRESENT APPLICATION BY MAKING FOLLOWING PRAYERS: OUR PRAYER IN SUMMARY THE ASSESSEE PRAYS AS UNDER: 2 M/S. MONDELEZ INDIA FOODS PVT. LTD. (A) INSOFAR AS GROUND NO.11 AND 13 ARE CONCERNED THE FINDING GIVEN BY THE TRIBUNAL IN PARA 14 TO 16 FOR GROUND NO.8 TO 10 MAY BE ADOPTED FOR GROUND NO.11 AND 13 AS THE FACTS AND ISSUES RAISED ARE SIMILAR. (B) INSOFAR AS GROUND NO.28 IS CONCERNED THE INA DVERTENT ERROR OF REMANDING THE MATTER BACK TO THE ASSESSING OFFICER FOR VERIFICATION OF THE OTHER OVERHEADS MAY BE RECTIFIED AND THE DISALLOWANCE MADE UNDER SECTION 80 IC OF THE ACT BE DELETED. 3. THE CONTENTS OF MISC. APPLICATION INSOFAR AS ASSESSEES P RAYER (A) IS CONCERNED THE SAME IS REPRODUCED BELOW: GROUND 11 TO 13 - TRANSFER PRICING ADJUSTMENT ON - ACCOUNT OF PAYMENT OF SERVICE FEES TO CADBURY HOLDING LIMITED 7 . DURING THE YEAR UNDER CONSIDERATION MIFPL HAS AVAILED SERVICES FROM CADBURY SCHWEPPES ASIA PACIFIC PTE LIMITED ('CSAPL') (COVERED BY GROUND NO. 8 TO 10) AND CADBURY HOLDING LIMITED ('CHL') (COVERED BY GROUND 11 TO 13). THE HON'BLE IT AT WHILE PASSING THE ORDER FOR AY 2009 - 10 ALLOWED PAYMENT OF SERVICE FEES BY MIFPL TO CSAPL (COVERED BY GROUND NO. 8 TO 10) STATING THAT; A. THE METHOD FOLLOWED BY TPO FOR MAKING ADJUSTMENT WAS NOT A METHOD PRESCRIBED UNDER THE ACT. B. FURTHER RELYING ON THE DECISION OF TH E COORDINATE BENCH IN CASE OF KODAK INDIA PVT. BARCLAYS BANK PLC AND VEDANTA LTD. IT WAS HELD THAT MATTER CANNOT BE REMANDED BACK WHEN THE TPO HAS FAILED TO FOLLOW THE PRESCRIBED METHOD UNDER SECTION 920. (REFER PARA 14 ON PAGE 13 OF THE ITA T ORDER FOR AY 2009 - 10) SINCE FACTS AND ISSUES IN RELATION TO SERVICES AVAILED FROM CSAPL (I.E. GROUND NO. 8 TO 10) AND FACTS AND ISSUES IN RELATION TO SERVICES AVAILED FROM CHL (I.E. GROUND 11 TO 13) ARE IDENTICAL AND AS BOTH THE TRANSACTIONS HAVE BEEN BENCHMARKED BY MIFPL USING TNMM FINDINGS OF ITAT FOR GROUND NO. 8 TO 10 ARE TO BE APPLIED FOR GROUND NO. 11 TO 13 AS WELL. THE TRIBUNAL HAS ERRONEOUSLY RELIED ON THE ORDER FOR A.Y. 2008 - 09 THIS BEING A MISTAKE APPARENT FROM RECORD MAY BE RECTIFIED AND THE FINDINGS G IVEN IN PARA 14 TO 16 MAY BE ADOPTED FOR GROUND NO. 11 TO 13 ALSO. 3 M/S. MONDELEZ INDIA FOODS PVT. LTD. 4. IN VIEW OF THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND SINCE THE MISTAKE BEING APPARENT ON THE FACE OF RECORD WE PROCEED TO RECTIFY THE MISTAKES. 5. THE CONCLUDING PART VIDE PARA 19 AND 20 OF GROUNDS NO.11 TO 13 OF THE IMPUGNED ORDER DATED 17 TH FEBRUARY 2021 PASSED IN ASSESSEES APPEAL BEING ITA NO. 2214/MUM./2014 FOR THE ASSESSMENT YEAR 2009 10 ARE HEREBY SUBSTITUTED AND BE READ AS UNDER: 19. HAVIN G CONSIDERED THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD WE FIND THAT T HE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE ASSESSEE IN TH E GROUNDS NO.11 TO 13 OF THE PRESENT APPEAL IS MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.8 TO 11 IN PARA 14 15 AND 16 WHEREIN WE HAVE ALLOWED THE ISSUE WHILE FOLLOWING THE DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL RENDERED IN KODAK INDIA PVT. LTD. V/S ACIT [2013] 37 TAXMANN.COM 233 (MUM.). SINCE THE ISSUE RAISED IN THESE GROUNDS NO.11 TO 13 ARE IDENTICAL TO THE ISSUE DECIDED BY US IN GROUNDS NO.8 TO 11 VIDE PARA 14 15 AND 16 AS AFORESAID CONSISTENT WITH THE VIEW TAKEN THEREIN WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND ALLOW THESE GROUNDS. THUS GROUNDS NO.11 TO 13 ARE ALLOWED. 6. WITH REGARD TO SECOND P RAYER (B) MADE BY THE ASSESSEE THE LEARNED SR. COUNSEL IN ITS MISC. APPLICATION STATED AS UNDER: GROUND 28 - CORPORATE TAX ADJUSTMENT ON ACCOUNT OF ALLEGED EXCESS DEDUCTION UNDER SECTION 80 - IC OF THE ACT 8. IN AY 2009 - 10 THE HON'BLE ITAT WAS CONCERNED WITH THE REDUCTION OF RS 10 01 28 000 IN THE DEDUCTION UNDER SECTION 80 - IC OF THE ACT IN RESPECT OF MIFPL'S UNIT AT BADDI HIMACHAL PRADESH. 9. THE LEARNED ASSESSING OFFICER ('AO') HAD REDUCED SUCH 4 M/S. MONDELEZ INDIA FOODS PVT. LTD. DEDUCTION BY ALTERING THE ALLOCATION OF FOLLOWING 3 ITEMS TO THE UNIT IN BADDI (SEE PAGE 1722 OF THE COMPILATION): FINANCE COST; OPERATION AND ESTABLISHMENT EXPENSES; AND NET INCREASE IN STOCK 10. A SIMILAR REDUCTION IN SECTION 80 - IC OF THE ACT WAS MADE BY THE LEARNED AO IN AY 2007 - 08 WHICH WAS REJECTED BY THE HON'BLE ITAT IN ITS ORDER FOR AY 2007 - 08 DATED 4 JULY 2019 (SEE PARA 26 TO 33 OF THE ORDER ENCLOSED AT PAGE 1394 - 1414 OF THE COMPILATION) E XCEPT THAT THE HON'BLE ITAT HAD REMITTED THE MATTER FOR VERIFICATION A PART OF THE OPERATIONAL AND ESTABLISHMENT EXPENSES CALLED 'OTHER OVERHEADS'. IN ITS ORDER FOR AY 2009 - 10 THE HON'BLE ITAT HAS NOTED THE ORDER FOR EARLIER YEARS AND FOLLOWED THE SAME ( SEE PARA 38 PAGE 43) AND HELD THAT 'ACCORDINGLY WE DEEM IT FIT TO REMIT ONLY THE VERIFICATION OF ALLOCATION OF OTHER OVERHEAD TO THE FILE OF THE AO' 11. THE ASSESSEE SAYS THAT IN THE CURRENT YEAR ALL OPERATIONAL AND ESTABLISHMENT EXPENSES HAVE BEEN UNIFORM LY ALLOCATED AND THEREFORE THERE IS NO SEPARATE CATEGORY OF 'OTHER OVERHEADS' WHICH WOULD REQUIRE VERIFICATION. THEREFORE THE ASSESSEE SUBMITS THAT IN THE CURRENT YEAR NOTHING IS REQUIRED TO BE REMITTED FOR VERIFICATION SINCE THERE IS NO SEPARATE ALLOC ATION METHOD FOR 'OTHER OVERHEADS'. IT IS HUMBLY SUBMITTED THAT THE INADVERTENT MISTAKE APPARENT FROM RECORD BE CORRECTED AND GROUND 28 BE ALLOWED. 7. IN VIEW OF THE ABOVE THE CONCLUDING PARA 38 (PARA WHICH IS ABOVE GROUND NO.29 AT PAGE 47) IS HEREBY SUBSTITUTED AND BE READ AS UNDER: 38. THEREFORE RESPECTFULLY FOLLOWING THE ABOVE DECISION OF CO ORDINATE BENCH WHEREIN IDENTICAL ISSUE IS SETTLED IN FAVOUR OF THE ASSESSEE. WE NOTICE THAT THE CO ORDINATE BENCH HAS ACCEPTED THE METHOD OF ALLOCATION WITH REGARD TO INTEREST VRS DECREASE IN STOCK DIRECT EXPENSES DIRECT MARKETING COST AND SELLING & DISTRIBUTION EXPENSES 5 M/S. MONDELEZ INDIA FOODS PVT. LTD. ROYALTY AND TECHNICAL FEES. THE BENCH HAS REMITTED BACK TO AO ONLY THE OTHER OVERHEAD FOR VERIFICATION . NOW B EFORE US IT IS BROUGH T TO OUR NOTICE THAT ALL OPERATIONAL AND ESTABLISHMENT E XPENSES WERE UNIFORMLY ALLOCATED AND THERE IS NO SEPARATE CATEGORY OF OTHER OVERHEADS. ACCORDINGLY WE ALSO DEEM IT FIT TO REMIT ONLY FOR LIMITED PURPOSE OF VERIFICATION OF ASPECT OF ALLOCATION METH OD ADOPTED TO THE FILE OF THE ASSESSING OFFICER . IN CASE IT IS FOUND THAT THERE IS NO OTHER OVERHEAD ALLOCATION THEN THE ISSUE MAY BE DECIDED IN FAVOUR OF THE ASSESSEE. THEREFORE WE ARE INCLINED TO ACCEPT THE SUBMISSION OF LD. AR. ACCORDINGLY TH E GROUN D RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 8. THE ORDER DATED 17 TH FEBRUARY 2021 PASSED IN ITA NO.2214/ MUM./2014 FOR THE ASSESSMENT YEAR 2009 10 IS MODIFIED TO THE ABOVE EXTENT ONLY. WITH THE ABOVE CORRECTIONS IN THE ORDER THERE WOULD BE NO CHANGE IN THE FINAL OUTCOME OF THE APPEAL. 9. IN THE RESULT MISC. APPLICATION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.2021 SD/ - VIKAS AWASTHY JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMB AI DATED: 31.08.2021 6 M/S. MONDELEZ INDIA FOODS PVT. LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR ITAT MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT MUMBAI