THE COMMISSIONER OF INCOME TAX vs. M/S LM WINDPWOER (INDIA)

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ITA/139/2014HC KarnatakaKAHC01014211201417 April 2015Bench: S.SUJATHA,VINEET SARAN5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial questions of law arose for determination. The Court found that the ITAT had remanded the matters for AY 2006-07 and 2008-09 to the Assessing Officer for fresh consideration on identical issues, consistent with its decision for AY 2007-08. The Court agreed with the ITAT's reasoning that maintaining consistency in the assessee's own cases across different assessment years was appropriate. Therefore, the Court did not interfere with the ITAT's order. The appeals were dismissed without a decision on the merits of the disallowances or transfer pricing adjustments.

What were the facts?

The appeals were filed by the Revenue against the orders of the Income Tax Appellate Tribunal (ITAT) for Assessment Years (AY) 2006-07 and 2008-09. The ITAT, by its order dated 25.10.2013, had restored two issues to the Assessing Officer (AO) for de novo consideration: Transfer Pricing Adjustment under Section 92CA and disallowance of technical assistance and training fees as capital expenditure. The ITAT's decision was based on its earlier order for AY 2007-08, where identical issues were also remanded to the AO for fresh consideration. The Revenue contended that the ITAT erred in restoring the issues for AY 2006-07 and 2008-09 without appreciating that no additional evidence was furnished for these years, unlike in AY 2007-08, and that an appeal was pending against the decision for AY 2007-08.

What were the issues?

1. Whether, on the facts and circumstances, the Tribunal was correct in restoring the issue of disallowance on account of technical assistance and training fees for AY 2006-07 and 2008-09, by relying on its decision to restore the same issue for AY 2007-08, without considering that no additional evidence was furnished by the assessee for AY 2007-08 and 2008-09 before the Tribunal, whereas such evidence was the basis for remand in AY 2007-08? (Question of law and fact, relating to Section 254 of the Income Tax Act, 1961). 2. Whether, on the facts and circumstances, the Tribunal was correct in restoring the issue of disallowance of expenditure on account of technical assistance and training fees for AY 2006-07 and 2008-09, by relying on its decision for AY 2007-08, without appreciating that the decision for AY 2007-08 was under challenge in a pending appeal under Section 260A and a Miscellaneous Petition was also preferred before the Tribunal? (Question of law and fact, relating to Section 254 of the Income Tax Act, 1961). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Tribunal erred in restoring the issues for AY 2006-07 and 2008-09 by following its order for AY 2007-08, as no additional evidence was furnished for AY 2006-07 and 2008-09, unlike in AY 2007-08. Furthermore, the decision for AY 2007-08 was not accepted, and an appeal under Section 260A was preferred, along with a Miscellaneous Petition before the Tribunal.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 92CA,Section 254

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 17TH DAY OF APRIL 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MRS. JUSTICE S.SUJATHA

ITA NO.138/2014

C/W ITA NO.139/2014

BETWEEN

1.

THE COMMISSIONER OF INCOME TAX C R BUILDING, QUEENS ROAD BANGALORE

2.

THE DY COMMISSIONER OF INCOME TAX CIRCLE-11 (5), RASHTROTHANA BHAVAN NRUPATHUNGA ROAD, BANGALORE ...APPELLANTS (COMMON) (BY SRI. ARAVIND K.V. ADV.,)

AND

M/S LM WINDPOWER (INDIA) PRIVATE LIMITED (EARLIER KNOWN AS LM GLASFIBER (INDIA) PVT LTD, PLOT NO. 61 & 62, KASABA INDUSTRIAL AREA, KIADB HOSKOTE, BANGALORE-562114 . ..RESPONDENT

(COMMON)

ITA NO.138/14 IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 25/10/2013 PASSED IN ITA NO. 1165/BANG/2010, FOR THE ASSESSMENT YEAR 2006-2007 PRAYING TO: 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. 2. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO. 1165/BANG/2010 DATED: 25/10/2013 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(5), BANGALORE.

ITA NO.139/14 IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 25/10/2013 PASSED IN ITA NO. 1681/BANG/2012, FOR THE ASSESSMENT YEAR 2008-2009 PRAYING TO: 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. 2. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.1681/BANG/2012 DATED: 25/10/2013 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(5), BANGALORE.

THESE ITAs. COMING ON FOR ADMISSION THIS DAY, VINEET SARAN J. DELIVERED THE FOLLOWING:

JUDGMENT

These appeals are filed by the revenue raising the following substantial questions of law:

“i. Whether on the facts and circumstances of the case, the Tribunal is right in law in restoring the issue of disallowance on account of technical assistance and training fees for A.Y.2006-07 and 2008-09 respectively on the ground that it had restored the issue to the assessing authority for denovo consideration for A.Y.2007-08 without appreciating that it had restored the issue to the assessing authority for A.Y.2007-08 on the ground that the assessee had furnished additional evidences before it, no such additional evidences are furnished by the assessee before the Tribunal for A.Y.2007-08 and 2008-09?

ii. Whether on the facts and circumstances of the case, the Tribunal is right in law in restoring the issue of disallowance of expenditure on account of technical assistance and training fees for A.Y.2006-07 and 2008-09 respectively on the ground that it had restored the issue to the assessing authority for denovo consideration for A.Y.2007-08 without appreciating that the decision of the Tribunal in M.P.No.50/2013 in ITA No.1091 of 2011 has not been accepted and an appeal under Section 260A is preferred and also that a MP is preferred before Tribunal on 31.10.2013”?

2.

The brief facts of the case are that for the Assessment Years 2006-07 and 2008-09, the appeals filed by the assessee had been decided by the Tribunal vide its order dated

25.10.2013 and considering the fact that in the assessee’s own case for the Assessment Year 2007-08 had identical issues were involved, the matter was remanded to the Assessing Officer. The Tribunal was of the opinion that for the Assessment Years 2006-07 and 2008-09 also, the matter should be considered afresh by the Assessing Officer with regard to two issues namely Transfer Pricing Adjustment under Section 92CA of the Income Tax Act, 1961 and the disallowance of technical assistance and training fee as capital expenditure. In paragraph 3.4 of the order of the Tribunal it has been noted as under:

“We have heard the rival submissions and perused the relevant material on record. The Tribunal in assessee’s own case for A.Y.2007-08 (Supra) have considered identical issues and have restored the same to AO/TPO for de nova consideration. Since issues are already pending consideration before the Assessing Officer/TPO for the earlier AY, to take a uniform stand in the matter, the T.P. adjustment made u/s 92CA and the disallowance of expenditure on account of technical assistance and training fees for the current AY are

also restored to the Assessing Officer/TPO for fresh consideration. It is ordered accordingly.”

3.

We are of the view that to maintain consistency in the matter in the own case of the assessee for the Assessment Year 2007-08, the matter has been remanded to the Assessing Officer for fresh consideration on the same issues which are listed in these appeals. The matter is relating to Assessment Years 2006-07 and 2008-09 and is also to be decided afresh by the Assessing Officer in the light of the observations made by the Tribunal in its order dated 25.10.2013.

4.

As such, we are of the opinion that no substantial questions of law arises for determination of this Court. The Appeals are accordingly dismissed.

Sd/-

JUDGE

Sd/-

JUDGE TL

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