DSV AIR & SEA PVT. LTD,MUMBAI vs. AADL/JT/ACIT/ITO/NFAC ASSESSMENT CENTRE, DELHI

This appeal by the assessee is directed against the assessment order dated 17/03/2022 passed u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 [in short 'the Act']. The assessee in appeal has assailed Transfer Pricing(TP) adjustments as well as addition on Corporate Tax issues.

Shri Nikhil Tiwari appearing on behalf of the assessee stated at the outset that ground No.1 to 9 of the appeal relating to T.P adjustment has become academic as the T.P issues have already been settled in Transfer Pricing Agreement(TPA). Thus, the ld. Authorized Representative for the assessee confined his submissions in respect of corporate tax issues in ground No.10 to 17 of appeal.

The ld. Authorized Representative for the assessee submits that the single issue assailed in ground No.10 to 16 of the appeal is with respect to addition of Rs.374,41,07,380/- pertaining to foreign remittances made by assessee / appellant. The ld. Authorized Representative for the assessee submits that while passing the draft assessment order dated 01/05/2021 the Assessing Officer made addition of Rs.374,41,07,380/- on account of foreign remittances allegedly made by the assessee. The assessee filed objections before the Dispute Resolution Panel (DRP). Along with objections the assessee furnished details and the documents including party wise list of foreign remittances made during the relevant period. The assessee categorically stated that during the period relevant to the assessment year under appeal the assessee had foreign remittances amounting to Rs.174,79,17,354/- only. The DRP after taking cognizance of the documents furnished by the assessee during DRP proceedings directed the Assessing Officer to verify the foreign remittances made by the assessee and thereafter, decided the issue as per the provisions of the Act. Before the Assessing Officer the assessee again furnished various documents including:

Per contra, Dr. Yogesh Kamat representing the Department vehemently defended the impugned assessment order. The ld. Departmental Representative submits that during the draft assessment proceedings, the assessee failed to furnish any document whatsoever in respect of foreign remittance. Repeated notices were given to the assessee to make submissions on the issue, however, the assessee failed to submit single document in this regard. Therefore, the nature of remittance made by assessee could not be established. The Assessing Officer had no other option but to make the addition. At the time of passing final assessment order, the Assessing Officer had examined the documents filed by the assessee and thereafter, made the addition. The ld. Departmental Representative prayed for confirming the assessment order and dismissing the grounds raised by the assessee assailing the addition.

We have heard the submissions made by rival sides and have examined the orders of authorities below. The solitary issue for adjudication before us is with respect to addition on account of foreign remittance. A bare perusal of the draft assessment order dated 01/05/2021 shows that no submissions or documents whatsoever were filed by the assessee before the Assessing Officer in respect of foreign remittance. In proceedings before the DRP, the assessee filed various documents which inter-alia includes details of foreign remittance amounting to Rs.147,79,17,354/-, copy of financial statement for the year ended 31/03/2017. On the basis of the documents and submissions furnished by the assessee, the DRP directed the Assessing Officer to re-examine foreign remittance.

The primary contentions of the assessee is that during the period relevant to the assessment year under appeal the assessee had made foreign remittance only to the tune of Rs.147,79,17,354/- and not Rs.386,40,53,228/- as mentioned by the Assessing Officer. We find that while passing assessment order consequent to the direction of the DRP, the Assessing Officer has failed to examine the documentary evidences filed by the assessee. The Assessing Officer merely on the basis of Form 15CA made the addition of Rs.374,41,07,380/-. No effort was made by the Assessing Officer to verify and examine documents furnished by the assessee in support of its claim. The Assessing Officer was duty bound to carry out the verifications and examine the documents furnished by the assessee in compliance with the directions of the DRP. In our considered opinion, it was incumbent upon the Assessing Officer to examine and verify the documents furnished by the assessee. The Assessing Officer failed in his duty to give effect to the directions of the DRP.

In the result, appeal by the assessee is partly allowed in the aforesaid terms.