ROLTA INDIA LTD.,MUMBAI vs. DY CIT-CC-1(1), MUMBAI

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ITA 763/MUM/2021Status: DisposedITAT Mumbai29 June 2022AY 2016-174 pages
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What did the Tribunal hold?

The Tribunal held that the issue of corporate guarantee commission rate is covered by its own earlier decisions for preceding assessment years. The rate was restricted to 0.5% based on previous rulings.

What were the facts?

The assessee's appeal challenged a Transfer Pricing adjustment on account of corporate guarantee commission. The assessee did not press one ground of appeal concerning the classification of the commission as an international transaction.

What were the issues?

The primary issue was the adjustment made for corporate guarantee commission. The Tribunal also considered whether the commission constituted an international transaction, but this ground was not pressed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13)

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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI

Before: SHRI VIKAS AWASTHY & SHRI M. BALAGANESH

For Respondent: Ms. Vatsalla Jha
Hearing: 29/06/2022Pronounced: 29/06/2022

सुनवाई क� �त�थ/ Date of hearing : 29/06/2022 घोषणा क� �त�थ/ Date of pronouncement : 29/06/2022 आदेश/ ORDER

PER VIKAS AWASTHY, JM:

1.

This appeal by the assessee is directed against the assessment order dated 26/03/2021 passed under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 [in short 'the Act'].

2.

Shri Shekhar Gupta appearing on behalf of the assessee submitted at the outset that he is not pressing ground No.1 of the appeal.

2.1 In respect of ground No.2 assailing Transfer Pricing adjustment of Rs.93.33 crores on account of corporate guarantee commission, the Id.Authorized Representative of the assessee submitted that the issue is squarely covered by the order of Tribunal in assessee's own case in the preceding assessment years. The Id. Authorized Representative of the assessee furnished copy of the Tribunal order in for assessment year 2012-13 decided on 07/09/2018 and the order of Tribunal in ITA No. 5720/Mum/2017 for assessment year 2013-14 decided on 29/08/2019.

3.

Ms.Vatsalaa Jha representing the Department vehemently defended the findings of Assessing Officer on the issue of T.P adjustment en corporate guarantee commission. However, the Id. Departmental Representative fairly admitted that the Tribunal in assessee's own case in preceding assessment years has considered this issue.

4.

Both sides heard. The assessee in appeal has raised two grounds. In ground No.l of appeal, the assessee has assailed the findings of Assessing Officer in holding corporate guarantee commission as international transaction. The Id.Authorized Representative of the assessee made a statement at Bar that he is not pressing ground No.1. In view of the statement made by Id.Authorized Representative of the assessee, ground No.1 is dismissed as not pressed.

5.

In ground No.2, the assessee has assailed T.P adjustment of Rs.93,33,78,654/- in respect of corporate guarantee commission. We find that the TPO has made adjustment by charging corporate guarantee commission @1.418%, We find that this issue was in dispute in assessment year 2012-13 and 2013-14. In assessment year 2012-13 the CIT(A) following the decision rendered by Hon'ble Jurisdictional High Court in the case of CIT vs. Everest Kento Cylinders Ltd., 378 ITR 57 restricted the corporate guarantee commission rate to 0.5%. Against the findings of the CIT(A), the Revenue filed appeal before the Tribunal in ITA No.882/Mum/2017 (supra). The Co-ordinate Bench upheld the findings of CIT(A) and dismissed the appeal of Revenue. Similarly, in the assessment year 2013-14, the C1T(A) restricted the corporate guarantee commission rate to 0.5%. The Revenue agitated the issue before the Tribunal in ITA No.5720/Mum/2017(supra). The Tribunal following its earlier order in assessee's own case for assessment year 2012-13 dismissed this ground of appeal

6. In the impugned assessment year since, the facts are identical to assessment year 2012-13 and 2013-14, we see no reason to take a different view. Consequently, ground No.2 of the appeal is allowed for parity of reasons. In the result, appeal by assessee is partly allowed in the terms aforesaid. 7.

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