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Income Tax Appellate Tribunal, “K” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI M. BALAGANESH
IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER
ITA no.1848/Mum./2016 (Assessment Year : 2011–12)
Dy. Commissioner of Income Tax ……………. Appellant Circle–3(2)(1), Mumbai v/s Jabil Circuit India Pvt. Ltd. Arena House, Plot no.103 Road no.12, Opp. Tulip Telecom ……………. Respondent Marol MIDC, Andheri (E) Mumbai 400 093 PAN – AACCP7114K
C.O. no.165/Mum./2016 (Arising out of ITA no.1848/Mum./2016) (Assessment Year : 2011–12) Jabil Circuit India Pvt. Ltd. Arena House, Plot no.103 Road no.12, Opp. Tulip Telecom ……………. Cross Objector Marol MIDC, Andheri (E) (Original Respondent) Mumbai 400 093 PAN – AACCP7114K v/s Dy. Commissioner of Income Tax ……………. Respondent Circle–3(2)(1), Mumbai (Original Appellant)
2 Jabil Circuit India Pvt. Ltd.
ITA no.1963/Mum./2016 (Assessment Year : 2011–12) Jabil Circuit India Pvt. Ltd. Arena House, Plot no.103 Road no.12, Opp. Tulip Telecom ……………. Appellant Marol MIDC, Andheri (E) Mumbai 400 093 PAN – AACCP7114K v/s Dy. Commissioner of Income Tax ……………. Respondent Circle–3(2)(1), Mumbai ITA no.3627/Mum./2015 (Assessment Year : 2009–10) Dy. Commissioner of Income Tax ……………. Appellant Circle–3(2)(1), Mumbai v/s Jabil Circuit India Pvt. Ltd. Arena House, Plot no.103 Road no.12, Opp. Tulip Telecom ……………. Respondent Marol MIDC, Andheri (E) Mumbai 400 093 PAN – AACCP7114K Assessee by : Shri Nilu Jaggi Revenue by : Shri Nitesh Joshi
Date of Hearing – 20.02.2019 Date of Order – 20.03.2019
O R D E R PER SAKTIJIT DEY, J.M.
These are bunch of three appeals and a cross objection. While a set of cross appeals and cross objection by the assessee arise out of assessment order passed under section 143(3) r/w section 144C(13)
3 Jabil Circuit India Pvt. Ltd. of the Income Tax Act, 1961 (for short “the Act”) for assessment year 2011–12, the appeal filed by the Revenue for assessment year 2009– 10 arises out of order dated 16th March 2015, passed by the learned Commissioner (Appeals)–56, Mumbai.
Since the appeals relate to the same assessee and involve common issues, they have been clubbed together and are being disposed of by way of this consolidated order for the sake of convenience.
ITA no.3627/Mum./2015 Revenue’s Appeal – A.Y. 2009–10
The dispute in the present appeal by the Revenue is confined to deletion of addition of ` 1,07,28,467.
Brief facts are, in the course of proceedings before him, the Transfer Pricing Officer noticed that the assessee has reimbursed an amount of ` 9,27,27,628, to its Associated Enterprises (AE) towards reimbursement of third party cost incurred by the AE on behalf of the assessee. From the transfer pricing study report, the Transfer Pricing Officer found that out of the aforesaid amount, the assessee has offered an amount of ` 1,78,85,440, to tax by not claiming deduction. Whereas, the balance amount of ` 7,48,42,181, was claimed as deduction on the reasoning that they are mere reimbursement of cost without any mark–up. After calling for necessary details and examining
4 Jabil Circuit India Pvt. Ltd. them, the Transfer Pricing Officer observed that the assessee could provide sample details along with third party break–up in relation to reimbursement amounting to ` 3,27,36,914. Further, he observed, in respect of reimbursement of salary cost, though, the assessee had provided TDS certificates in Form no.16 relating to some of the expatriates, however, the assessee could not furnish complete supporting details to demonstrate that the transaction was at arm's length. Therefore, he suggested an adjustment of ` 5,99,91,047. The adjustment proposed by the Transfer Pricing Officer was added in the assessment order. The assessee challenged the aforesaid addition before the first appellate authority.
Learned Commissioner (Appeals) after considering the submissions of the assessee in the context of facts and material on record held that the Transfer Pricing Officer had neither pointed out any discrepancy in the documentary evidences filed before him nor had required the assessee to produce any other evidences. Thus, he held that disallowance of salary reimbursement, in total, is unjustified. Further, he observed, as per facts on record, the assessee could not furnish any supporting evidence with regard to salary reimbursement of ` 78,45,266, to the AE Jabil Circuit Ltd. Therefore, he held that the aforesaid amount of ` 78,45,266, should be considered for transfer pricing adjustment.
5 Jabil Circuit India Pvt. Ltd. 6. The learned Departmental Representative submitted, before the first appellate authority the assessee has furnished evidences to reconcile the differences pointed out by the Transfer Pricing Officer. He submitted, the differences pointed out by the Transfer Pricing Officer were never reconciled by the assessee before the Transfer Pricing Officer. Therefore, assessee’s claim should be verified by the Transfer Pricing Officer. Further, he submitted, the discrepancy in the name of one employee appearing in Form no.16, has not been taken note of by the first appellate authority. Therefore, the issue has to be restored back to the Assessing Officer for fresh adjudication.
The learned Authorised Representative submitted, though in form no.16, the PAN number of the concerned employee was correctly shown but the name of the employee was wrongly mentioned as “S. Kesavan” instead of “K. Swaminathan”. He submitted, the mistake in the name in Form no.16, issued to the concerned employee is further evident from the TDS certificate issued in Form no.16, for assessment year 2011–12. Further, learned Authorised Representative referring to the PAN verification of the concerned employee submitted that the PAN relates to the employee K Swaminathan. Thus, he submitted, since the mismatch/discrepancy was explained with supporting evidence, learned Commissioner (Appeals) has correctly deleted the adjustment made by the Transfer Pricing Officer.
6 Jabil Circuit India Pvt. Ltd. 8. We have considered rival submissions and perused material on record. As could be seen from the grounds raised before us, the dispute is in relation to salary reimbursement of ` 1,07,28,467, relating to one of the expatriate employee of the AE. It is noted, in Form no.16, issued to the concerned employee for the assessment year 2009–10, the name of the employee has been mentioned as “S. Kesavan”, Factory Director, whereas, the PAN is mentioned as “BBQPK3328F”. Whereas, in the other evidences submitted by the assessee, the Transfer Pricing Officer found that the salary of ` 1,07,28,467, was paid to Purshothuman K. Swaminathan, Factory Director. Therefore, due to mismatch of name in Form no.16, and the other documents, the Transfer Pricing Officer made the adjustment. However, from the documentary evidences submitted in the paper book, it is evident that though Form no.16, issued for the assessment year 2009–10, the name of the concerned Factory Director has been mentioned as “S. Kesavan”, however, it appears that such name has been wrongly mentioned in place of “Purshothuman K. Swaminathan”. This fact is evident from the Form no.16, issued for assessment year 2011–12, wherein the name of the employee has been correctly mentioned as “Purshothuman K. Swaminathan”. Further, the PAN of the employee mentioned in Form no.16, matches with the PAN of “Purshothuman K. Swaminathan”. Thus, the documentary evidences clearly demonstrate the mistake in mentioning the name of the
7 Jabil Circuit India Pvt. Ltd. employee in Form no.16, issued for the assessment year 2009–10. However, since the assessee has satisfactorily explained the aforesaid mistake through supporting evidences, we do not find any reason to interfere with the decision of learned Commissioner (Appeals) on this issue. Grounds are dismissed.
In the result, Revenue’s appeal is dismissed.
ITA no.1963/Mum./2016 Assessee’s Appeal – A.Y. 2011–12 10. Grounds no.1, being general in nature does not require adjudication.
On the instructions of the assessee, the learned Authorised Representative did not press ground no.3. Accordingly, ground no.3, is dismissed.
Ground no.4 challenging initiation of penalty proceedings under section 271(1)(c) of the Act being premature at this stage, does not require adjudication.
The only surviving ground is ground no.2, wherein the assessee has challenged addition made of ` 14,87,48,634, on account of transfer pricing adjustment on intra–group services
Brief facts are, the assessee, an Indian company, is engaged in the business of assembly and customization of all types, varieties and
8 Jabil Circuit India Pvt. Ltd. specifications of printed circuit boards and set–top boxes. For the assessment year under dispute, the assessee filed its return of income on 30th November 2011, declaring nil income under the normal provision. However, the assessee declared book profit of ` 73,72,52,231, under section 115JB of the Act. In the course of assessment proceedings, the Assessing Officer noticing that the assessee has entered into various international transactions with its Associated Enterprises (AE) made a reference to the Transfer Pricing Officer for determining the arm's length price of the international transaction. In the course of proceedings before him, the Transfer Pricing Officer while verifying the report in Form no.3CEB submitted by the assessee noticed that the assessee has paid corporate allocation fee amounting to ` 15,32,53,694, to the AE towards services utilized from them. The Transfer Pricing Officer observed, such payments were made for the first time in the impugned assessment year. On going through the transfer pricing study report he found that the assessee has benchmarked the aforesaid transactions at entity level. After verifying the details, he observed that the transaction relating to corporate service payment being a distinct international transaction needs to be benchmarked separately. Since, the assessee has not carried out separate benchmarking, the Transfer Pricing Officer rejected the benchmarking done by the assessee. Having done so, he called upon the assessee to furnish complete set of documentation to
9 Jabil Circuit India Pvt. Ltd. demonstrate fulfillment of benefit test and further to explain why the corporate allocation charges paid to the AE should not be disallowed and the arm's length price be determined as nil on failure to demonstrate the benefit received. In response to the query raised by the Transfer Pricing Officer, the assessee made detailed submissions explaining the nature of services received from AE. It was submitted, the payments made were for receiving business support services, information technology (IT) support services, operations and logistic services etc. After examining the submissions of the assessee and the documents filed before him, the Transfer Pricing Officer observed that except furnishing certain e–mail correspondences, print–out of screen shots regarding information services, the assessee could not demonstrate that services were availed by the assessee with regard to business support services and IT services. He further observed, the assessee also could not demonstrate through proper documentary evidences that it has received operation and logistic services and business development services. The Transfer Pricing Officer observed, the assessee was unable to furnish any evidence to demonstrate that either the services were availed or even if they were availed, whether they have benefitted the assessee. Having held so, he observed, the arm's length price of corporate support services availed from the AE has to be benchmarked by applying Comparable Uncontrolled Price (CUP) method. The Transfer Pricing Officer observed, in absence of
10 Jabil Circuit India Pvt. Ltd. any evidence to demonstrate that services were rendered by the AE, a reasonable estimate of the price payable for such services has to be made. Accordingly, by applying man–hour rate of ` 8,500 per hour, the Transfer Pricing Officer ultimately determined the arm's length price of the services rendered by the AE at ` 45,05,000. Accordingly, the balance amount of ` 14,87,48,694, paid towards cost allocation charges was proposed as the adjustment to be made to the arm's length price. On the basis of the order passed by the Transfer Pricing Officer, the Assessing Officer made the addition in the draft assessment order. Against such addition made in the draft assessment order, the assessee raised objections before the DRP.
In the course of proceedings before the DRP, the assessee furnished certain additional evidences to support the cost allocation charges paid to the AE. On the basis of the additional evidences filed by the assessee, the DRP called for a remand report from the Transfer Pricing Officer. After considering the remand report of the Transfer Pricing Officer as well as the submissions of the assessee, learned DRP ultimately endorsed the decision of the Transfer Pricing Officer and accordingly sustained the addition made in that behalf.
The learned Authorised Representative submitted, without properly verifying the evidences furnished by the assessee, the DRP has simply endorsed the view expressed by the Transfer Pricing
11 Jabil Circuit India Pvt. Ltd. Officer. He submitted, complete documentation maintained by the assessee with regard to cost allocation charges were furnished before the DRP, however, the DRP has not at all examined in detail such documents filed by the assessee. In this regard, he furnished before the Bench a list of documentary evidences submitted before the Transfer Pricing Officer and the DRP to justify the payment of cost allocation charges. He also furnished the details of cost allocation keys for intra–group services. The learned Authorised Representative submitted, relying upon the DRP’s order for the impugned assessment year, while deciding similar issue in assessment year 2012–13 and 2013-14, the DRP has upheld similar adjustment made by the Transfer Pricing Officer, though, the DRP allowed the cost allocation charges for IT support services. He submitted, while deciding assessee’s appeal on the adjustment made to the arm's length price of intra–group services/cost allocation charges in assessment year 2012–13 and 2013–14, the Tribunal has deleted the adjustment made by the Transfer Pricing Officer and sustained by the DRP. Thus, he submitted, the issue stands squarely covered in favour of the assessee by the aforesaid decision of the Tribunal.
The learned Departmental Representative strongly relying upon the observations of the Transfer Pricing Officer and the DRP submitted that since the assessee has failed to demonstrate that services were actually rendered by the AE and the assessee was benefitted from
12 Jabil Circuit India Pvt. Ltd. such services, the Transfer Pricing Officer was justified in making the adjustment.
We have considered rival submissions and perused material on record. We have also gone through the various documentary evidences submitted in the paper book and specifically referred to in the course of hearing. It is evident, the assessee has paid an amount of ` 15,32,53,694, towards various support services provided by its AE. It is also evident, the assessee has benchmarked the arm's length price of such services in the transfer pricing study report. However, the Transfer Pricing Officer has rejected the benchmarking of the assessee pointing out various discrepancies, such as, lack of supporting evidences to demonstrate availing of services, failure to demonstrate the benefit derived, etc. Having done so, the Transfer Pricing Officer has proceeded to apply CUP method to benchmark the price paid for such intra–group services. However, with complete disregard to rule 10B(1)(a) of the I.T. Rules, 1962, the Transfer Pricing Officer has not brought even a single instance of CUP to support his benchmarking. Rather, as per his own admission, the Transfer Pricing Officer has proceeded to benchmark the arm's length price of intra–group services on a reasonable estimation and in the process has determined the arm's length price of the international transaction at ` 45,05,000. Thus, it is very much clear, the benchmarking done by the Transfer Pricing Officer is not in consonance with the statutory provisions. Be
13 Jabil Circuit India Pvt. Ltd. that as it may, learned DRP has upheld the benchmarking done by the Transfer Pricing Officer broadly on the following grounds:–
From the agreement, it is not clear which group entity will provide which service to which recipient;
The period of validity of the agreement is not mentioned;
Though, cost has been charged by the AE by using different allocation keys for each service, however, the documents on the basis of which such cost has been allocated either to the assessee or different entities have not been furnished;
CPA certificate furnished towards allocation of IT cost does not provide the details for such allocation;
Cost allocation for non–IT services are not supported by proper documentary evidences;
Though, the assessee has shown incurring of cost by the AE as well as its allocation amongst various group entities by furnishing the CPA certificate, but, it has not provided the financials of the AE to show that costs have been incurred and that it has been charged by the AE for the same services; and
The assessee, through proper documentation has failed to prove that the services have actually been availed and it has benefitted the assessee.
Thus, on the basis of the aforesaid reasoning, learned DRP has upheld the adjustment proposed by the Transfer Pricing Officer. Notably, similar adjustment was made to the arm's length price of
14 Jabil Circuit India Pvt. Ltd. intra–group services by the Transfer Pricing Officer in assessee’s own case for assessment years 2012–13 and 2013–14 on identical reasoning. Learned DRP while dealing with the issue in the aforesaid assessment years, in substance, has adopted the reasoning of learned DRP in the impugned assessment year, except, in case of payment made towards IT support services. Be that as it may, while dealing with the issue relating to the aforesaid adjustment in assessment years 2012–13 and 2013–14, the Tribunal deleted the addition made with the following observations:–
“26. Upon careful consideration, we note that the issue in dispute is the allocation of intra group services to be borne by the assessee from its AE in 16 worldwide localities. The assessee’s allocation is based upon a global agreement between the AEs in this regard. Various allocation keys, i.e., asset, revenue, number of employee, depending upon the nature has been used. The allocation is supported by a CPA certificate. The Revenue’s grouse is that necessary evidence in this regard for the veracity of allocation and incurring of expenditure has not been submitted. That the CPA certificate is not credible in absence of supporting documents on the basis of which the said certificate was issued. That there are several errors in the global agreement. That the use of allocation keys is not permissible. The solution found by the TPO to the above shortcoming is the rejection of the assessee’s allocation to be substituted by an absolutely whimsical and bizarre estimation that total 1500 man hours @ 8,500/- would only be permissible and that would be allocated as under: IT support service - 300 hours Finance service - 400 hours Other intra group services for sales, marketing, etc .- 300 hours 27. We find that the ld. Counsel of the assessee has referred to the voluminous paper book and the documents submitted before the authorities below. The summary of the same has also been reproduced in the above part containing the summary of the ld. Counsel of the assessee’s submission. We have reviewed
15 Jabil Circuit India Pvt. Ltd. the co-relation between the item of expenditure allocated and the supporting document mentioned in the paper book. In our considered opinion, the supporting evidence submitted by the assessee are reasonable and cogent. The adverse inference drawn by the authorities below that the submissions of the assessee has no evidentially value is totally misplaced and it is a result of non examination of evidences by the authorities below. In this regard, we draw support from the decision of the Hon'ble jurisdictional High Court in the case of Maersk Global Service Centre (in ITA No. 692 of 2012 vide order dated 22.08.2014). In this case, the Hon'ble jurisdictional High Court has expounded that in a situation where the details were very much before the TPO, the Hon’ble High Court held that the tribunal therefore, did not and rightly permitted the DR to argue the appeal contrary to the record. That the appeal therefore did not raise any substantive question of law and deserves to be dismissed. The ratio from the above said decision is applicable on the present case also. The necessary evidence has also been brought on record by the assessee. The authorities below have totally disregarded the same and made the allocation on the basis of a total bizarre and whimsical method. The bizarreness and whimsical nature of the allocation done by the TPO which has been supported by the DRP is not lost upon the ld. DR who has argued for a remand for proper appreciation by the TPO. In view of the aforesaid Hon'ble jurisdictional High Court decisions we are of the considered opinion that such an act of TPO and DRP cannot be set right by remitting the issue on this account. 28. We note that it is the claim of the assessee that the assessee has intra group AEs spread around the length and breadth of the globe. It has been claimed that the intra group services have been allocated on the basis of global agreement among the AEs. Proper allocation keys have been used and that the methodology adopted has the mandate of guiding of the OECD. In this regard, we note that in the OECD guidelines in the Chapter VII relating to special consideration for intra group services has observed that mainly two issues were to be considered, one was whether intra group service have in fact been provided. The other issue is whether the intra group charge for such services for tax purpose should be in accordance with the arms length principle. The OECD guidelines interalia also provide that the allocation of the group cost might be based upon the turnover or staff employed or some other basis. It mentioned that whether the allocation method is appropriate may depend upon the nature and use of the services. A reading of this OECD guidelines makes it abundantly clear that contrary to the Revenue’s argument, the using of allocation keys for allocation of intra group services is not alien to international tax jurisprudence. Further, the allocation of
16 Jabil Circuit India Pvt. Ltd. concerned group expenses to different accounting units is a duly accepted accounting procedure. Furthermore, the assessee has used a CPA certificate for the allocation of intra group services from the AE. The authorities below have rejected the CPA certificate on the ground that underlying documents on the basis of which the CPA certificate has been issued has not been produced before them. In this regard, we note that the CPA certificate is quite specific and has been duly authenticated. We find that in Rule 10D, containing information and documents to be kept and maintained u/s.92D it has been duly mentioned that the information’s required under Rule 10D(2)(A) shall be supported by authentic documents which may include inter alia public accounts and the financial statements relating to the business of the associated enterprises. Hence, the evidence for international transaction can be duly supported by public accounts and financial statements relating to business affairs of the AE. With such mandate of law, in our considered opinion, the action of the authorities below in rejecting the CPA certificate is not sustainable. The various other proposition mentioned by the ld. Counsel of the assessee and case laws in support thereof as noted in para 22 hereinabove are germane and duly support the case of the assessee. 29. We further note that as regards the estimation and allocation of IT cost is concerned, the same has been duly accepted for the Dispute Resolution Panel for A.Y. 2013-14 and the Revenue has accepted the same. In the background of the aforesaid discussion and precedent, we set aside the order of the authorities below and decide the issue in favour of the assessee. Hence, the transfer pricing adjustment stands deleted.”
On careful perusal of the order of the Tribunal, it is noticed that the relevant facts involved in the impugned assessment year and assessment years 2012–13 and 2013–14 are almost identical. Moreover, while deleting similar additions made in Assessment Years 2012–13 and 2013–14 the Tribunal has dealt with all the reasoning of learned DRP on the basis of which addition was sustained in the impugned assessment year. In fact, like the documentation maintained and furnished before the departmental authorities in assessment years
17 Jabil Circuit India Pvt. Ltd. 2012–13 and 2013–14, as reproduced in Para–21 of the aforesaid order of the Tribunal, the assessee has maintained and produced similar documents before the departmental authorities, which is evident from the details and factual paper book filed before us. 21. Thus, it is noticed that under identical facts and circumstances, the Tribunal while considering the issue in Assessment Years 2012-13 and 2013-14 has deleted the addition made on account of adjustment made to the arm's length price of intra–group services. No material difference in facts between the impugned assessment year and assessment years 2012–13 and 2013–14, have been brought to our notice by the learned Departmental Representative. Therefore, respectfully following the aforesaid decision of the Co–ordinate Bench in assessee’s own case, we delete the addition made of ` 14,87,48,637. Ground is allowed.
In the result, assessee’s appeal is partly allowed.
ITA no.1848/Mum./2016 Revenue’s Appeal – A.Y. 2011–12
Though, the Revenue has raised three effective grounds, however, the only common issue arising therein relates to deletion of addition made of ` 11,66,18,461, under section 41(1) of the Act.
Brief facts are, during the assessment proceedings, the Assessing Officer called upon the assessee to furnish the details of sundry
18 Jabil Circuit India Pvt. Ltd. creditors appearing in the Balance Sheet. More specifically, the Assessing Officer called upon the assessee to furnish the list of sundry creditors which are outstanding for more than three years and further, to explain why such outstanding sundry creditors should not be added back to the income of the assessee under section 41(1) of the Act. Though, the assessee objected to the proposed addition, however, the Assessing Officer added back sundry creditors amounting to ` 11,66,18,461, which has remained outstanding for more than three years to the income of the assessee under section 41(1) of the Act. The assessee challenged the aforesaid addition before the DRP.
After considering the submissions of the assessee in the context of facts and material on record, learned DRP found that out of the total sundry creditors appearing in the books of account an amount of ` 6,65,11,456, has either been paid back to the creditors or written back as income by December 2014. Further, learned DRP found that the assessee has also acknowledged the debt in its books of account. They also found that the assessee has furnished not only details of outstanding sundry creditors but the reason for non–payment of dues before the Assessing Officer. They also found that the outstanding sundry creditors largely belong to Jabil Group of companies and the assessee could not pay the creditors because it was not in a good financial position. On the basis of aforesaid facts, learned DRP observed that when the assessee has accepted its liability and the
19 Jabil Circuit India Pvt. Ltd. creditors have not written–off / remitted the outstanding amount in their books, provisions of section 41(1) of the Act cannot be invoked. Thereafter, relying upon certain judicial precedents learned DRP, ultimately deleted the addition made by the Assessing Officer.
The learned Departmental Representative relied upon the observations of the Assessing Officer, whereas, learned Authorised Representative strongly relying upon the observations of learned DRP submitted that the Assessing Officer has added back the outstanding sundry creditors under section 41(1) of the Act merely because they have remained outstanding for more than three years. He submitted, the assessee has either squared off or written back the entire outstanding sundry creditors by end of December 2018. Thus, he submitted, the addition made by the Assessing Officer is merely on presumption and surmises, hence, not sustainable. Further, he submitted, similar addition made by the Assessing Officer in assessee’s own case for assessment year 2010–11 was deleted by the Tribunal since the only reason on the basis of which the Assessing Officer had made the addition is, the sundry creditors have remained outstanding.
We have considered rival submissions and perused material on record. A reading of the assessment order makes it clear that the only reason on which the Assessing Officer has made the impugned addition is, the sundry creditors have remained outstanding for more
20 Jabil Circuit India Pvt. Ltd. than three years. However, before invoking the provisions of section 41(1) of the Act, three conditions have to be satisfied. Firstly, the credit amount must have arisen in the ordinary course of business, secondly, the assessee must have received the benefit either in cash or in kind as a result of remission or cessation of liability and thirdly, such benefit has accrued to the assessee in that particular assessment year. On a careful reading of the assessment order, we do not find any factual basis upon which the Assessing Officer has demonstrated that the conditions of section 41(1) are satisfied. Merely because the sundry creditors are outstanding for more than three years, it cannot be said that there is remission/cessation of liability. Moreover, the facts on record clearly reveal that in subsequent period the liability on account of outstanding sundry creditor has either been paid or written back in the books of account. The aforesaid factual finding of learned DRP remains uncontroverted before us. That being the case, we do not find any reason to interfere with the decision of the DRP on the issue. Grounds are dismissed. 28. In the result, Revenue’s appeal is dismissed.
C.O. no.165/Mum./2016 By Assessee
In view of our decision in ITA no.1848/Mum./2016, this cross objection has become infructuous, hence, dismissed.
21 Jabil Circuit India Pvt. Ltd. 30. In the result, cross objection is dismissed.
To sum up, ITA no.3627/Mum./2015 is dismissed; ITA no.1963/Mum./2016 is partly allowed; ITA no.1848/Mum./2016 and C.O. no.165/Mum./2016, are dismissed. Order pronounced in the open Court on 20.03.2019
Sd/- Sd/- M. BALAGANESH SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED: 20.03.2019 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary
(Sr. Private Secretary) ITAT, Mumbai