NIMBUS COMMUNICATIONS LTD,MUMBAI vs. ASST CIT RG 16(1), MUMBAI

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ITA 2218/MUM/2017Status: DisposedITAT Mumbai28 October 2022AY 2012-135 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The tribunal held that the appeal was not maintainable as it was filed by directors after the company was ordered for winding up. The appeal could only be prosecuted by the official liquidator.

What were the facts?

The assessee, Nimbus Communication Ltd, filed an appeal against an assessment order. The Departmental Representative pointed out that the company was ordered for winding up by the Bombay High Court, making the appeal filed by directors not maintainable.

What were the issues?

The primary issue was the maintainability of the appeal due to the company being under winding up proceedings. The tribunal also considered grounds related to transfer pricing adjustments and disallowance under Section 14A.

Which sections of the Income-tax Act were involved?

Section 143,Section 144C,Section 92CA,Section 92A,Section 92,Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J” BENCH, MUMBAI

For Respondent: Shri. Shyam Prasad. (CIT DR)
Hearing: 11.10.2022
1.

This appeal is filed by Nimbus Communication Limited against the assessment order dated 31stMarch, 2011 passed under section 143 read with 144C (3) of the Income Tax Act, 1961 (the Act) by the Deputy Commissioner of Income Tax, Range-16(1) Mumbai, in pursuance of direction issued under section 144C (5) of the Act by the learned Dispute Resolution Panel 2, Mumbai. The assessee has raised following grounds of appeals :- “The appellant objects to the order dated 31st January, 2017 passed under Section 143(3) r.w.s. 144C (13) of the Income Tax Act, 1961 (Act) by the

1. The transfer Pricing proceedings initiated by the Assessing Officer under Section 92CA (1) of the Act are without any jurisdiction and ought to be quashed.

2.

On the basis of the facts and in the circumstances of the case and in law, the learned Assessing Officer in pursuance of the direction given by the learned DRP erred in assessing income of the Appellant at ₹ 41,42,51,970/-.

3. The learned DRP erred in not directing the Assessing Officer to delete the transfer pricing adjustments proposed by the Transfer Pricing Officer(TPO), as he failed to follow the provisions of section 92A (3) of the Act, hence, the Transfer Pricing Adjustments are bad in law and the appellant’s international transactions should be accepted at arm’s length as per Section 92 of the Act.

3.1 International License Revenue received from AE

The learned Dispute Resolution Panel (DRP) has erred in law and facts upholding TPO for making addition of ₹ 20,49,81,541/- on 3.2 Cost of Media Rights and Signage Fees

The learned DRP has erred in law and facts upholding TPO for making adjustment of ₹ 98,23,199/- on account of Cost of media rights and signage fees.

3.3 Interest on Loan and Advances

The learned DRP and erred in law and facts upholding TPO for transfer Pricing adjustment on account of notional interest charged for the loans and advances given to the associated enterprise.

3.4 Commission in Corporate Guarantee

The learned DRP has erred in law and facts holding and directing to Assessing Officer that corporate guarantee commission should be charged at 1.5% thought the Hon’ble ITAT in assessee own case for A.Y. 2005-06, 2006-07 and 2007-08 has settled that issued at 0.5%.

3.5 Interest on Receivable

The learned DRP has erred in law and facts upholding TPO for transfer pricing adjustments made on receivables.

6.

The appellant reserves the right to add, alter or amend the above grounds of appeal

.”

02. However, at the time of hearing of the appeal, the learned Departmental Representative submitted that this assessee has been ordered for winding up by the Hon’ble Bombay High Court and therefore, now only official liquidator can file this appeal. At present, the appeal is filed by some Director of Nimbus Communication Limited (Assessee). Hence it deserves to be dismissed.

3.

Despite notice none appeared on behalf of the assessee. It is also found that this appeal was filed in 2017. However, after that the appeals are listed for hearing on more than 10 occasions. None appeared on behalf of the assessee. The notices are also not responded by the assessee by filing any communication. The learned DR has also filed a newspaper report in Mint dated 12th March, 2018 wherein it is reported that Hon’ble Bombay High Court has ordered winding up against the company for the reason that the company is unable to pay its debts. As the appeal presently is filed by the Directors of the company, same is

4.

However, we give liberty to the official liquidator that if, this appeal is required to be pursued he may file necessary application for the recall of this order.

5.

In the result, appeal is dismissed for above reasons.

Order pronounced in the open court on 28.10.2022.

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