DYNAMIC TRANSMISSION LTD.,ROHTAK vs. ACIT, CIRCLE , ROHTAK
Income Tax Appellate Tribunal, DELHI BENCH “B”, NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL & Dynamic Transmission Ltd., vs. ACIT, CIRCLE, ROHTAK 151-IDC, Hissar Road,
PER MAHAVIR SINGH, VICE PRESIDENT :
These appeals have been filed by the Assessee against the separate orders passed by the Ld. CIT(A), Rohtak relating to assessment years
2013-14 & 2014-15 respectively. Since these appeals are inter-connected, hence, were heard together and disposed of by this common order for the sake of convenience, by dealing with the assessment year 2013-14, being the lead case wherein, the assessee has raised as many as 05 following grounds of appeal.
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That the CIT(A), Rohtak has erred in law and on facts in sustaining the disallowance made by the AO, ACIT, Rohtak on account of untenable and illegal grounds. Hence, the order, as such may be quashed. 2. That the CIT(A), Rohtak has erred in law and on facts in sustaining the disallowance of finance cost of Rs. 10,68,025/ made by the AO, ACIT, Rohtak on account untenable and illegal grounds. Hence, the order, as such, may be quashed. 3. That the CIT(A) Rohtak has erred in law and on facts in sustaining the disallowance of car running of Rs. 30,869/- made by the AO, ACIT, Rohtak on account of untenable and illegal grounds. Hence, the order, as such, may be quashed. 4. That the CIT(A), Rohtak has erred in law and on facts in sustaining the disallowance of Guest House Rent of Rs. 117600/- made by the AO, ACIT, Rohtak on account of untenable and illegal grounds. Hence, the order, as such, may be quashed. 5. That the appellant craves leave to add, substitute, delete or modify any of the above grounds of appeal on or before the date of hearing. 2. However, in these captioned appeals, the assessee has raised a following common Additional Ground and submitted that this legal ground goes to the root of matter hence, the same may be admitted first and then adjudicate it.
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“That the CIT(A), Rohtak has erred in law and on facts in sustaining the assessment as transfer pricing adjustment is done by AO instead of transfer pricing officer. Hence, the assessment order, as such, may be quashed.”
3. Heard rival contentions and perused the records. We find that the aforesaid additional ground raised by the assessee is purely a legal ground and goes to the root of the matter, thus, on the anvil of the Hon’ble
4. At the time of hearing Ld. Counsel for the assessee submitted that in the assessment year 2013-14, Ld. CIT(A) has erred in law and on facts in sustaining the assessment as assessment order is not in conformity with the section 92CA(4) of the Income Tax Act and against the Instruction No.
3/2016 dated 10.03.2016 for Implementation of Transfer Pricing
Provisions replacing the Instruction No. 15/2015 dated 16.10.2015, a copy of which has been placed before us in the Paper Book at pages 123-131. He further submitted that the aforesaid additional ground is squarely covered by the decision of the Coordinate Bench, ITAT Mumbai in the case of DAM Capital Advisors Ltd. vs. DCIT vide order dated 27.10.2023
passed in ITA No. 1991/Mum/2022 (AY 2012-13), a copy of which has been placed before us in the Paper Book at Pages 132 to 154. Therefore, he requested that the assessment order, as such, may be quashed. As regards assessment year 2014-15 is concerned, Ld. AR for the assessee submitted that since no reference is made to TPO, the assessment order has become bad in law and deserve to be quashed on this count.
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Ld. DR relied upon the orders of the authorities below. 6. We have heard both the parties and perused the records, especially the instructions of the CBDT and the Coordinate Bench decision, as referred by the Ld. AR during his arguments. We note that in the case of DAM Capital Advisors Ltd. vs. DCIT, the Coordinate Bench, ITAT Mumbai vide its order dated 27.10.2023 passed in ITA No. 1991/Mum/2022 (AY 2012-13) has held that where no reference is made to TPO, the AO has no power to determine the Arms Length Price. This view is supported by the CBDT Instructions no. 3/2016 dated 10.3.2016 for Implementation of Transfer Pricing Provisions replacing the Instruction No. 15/2015 dated 16.10.2015. In the present case though the AO has made a reference to TPO for determination of arms’ length price, however, the TPO has suggested NIL adjustment. Even otherwise, the AO proceeded to make an adjustment by allocation of expenses between the eligible and non-eligible units which is not permissible, in view of the aforesaid CBDT’s instructions No. 03/2016 and further by the Coordinate Bench decision in the case of DAM Capital Advisors Ltd. (Supra). Accordingly, the assessment order is bad in law and deserve to be quashed. We hold and direct accordingly. Resultantly, the ITA No. 327/Del/2019 (AY 2013-14) filed by the assessee is allowed. 6.1 As regards, assessee’s ITA No. 328/Del/2019 (AY 2014-15) is concerned, since no reference is made to TPO, the AO has no power to determine the Arms Length Price, hence, assessment is bad in law and deserve to be quashed. We hold and direct accordingly. Accordingly, the appeal of the assessee for assessment year 2014-15 is also allowed.
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In the result, both the captioned appeals stand allowed in the aforesaid manner.
Order pronounced in the Open Court on 25th March, 2025. (MANISH AGARWAL)
VICE PRESIDENT
SRBhatnagar