M/S LINDE INDIA LTD.,KOLKATA vs. DCIT, CIR-12, KOLKATA, KOLKATA

The instant batch comprises of four cases. First assessment year 2010- 11involves assessee’s appeal arising against the DCIT Circle – 12, Kolkata in assessment order dated 24.02.2015. Next assessment year 2011-12 comprises of Revenue’s and Assessee’s cross appeals ITA No. 105/K/2016 and 224/K/2016 directed against assessment order dated 27.11.2015 passed by JCIT Range – 12, Kolkata. Last assessment year 2012-13 involves assessee’s appeal being ITA No. 381/K/2017 directed against the DCIT, Circle 12(1), Kolkata assessment order dated 19.12.2016. Relevant proceedings in all cases are u/s 143(3) read with section 144C(13) of the Act.

Learned counsel representing states at the outset that all assessee’s appeals challenge correctness of various additions including transfer pricing adjustments in the three assessment years. He inform us that the instant tax payer had filed its application for advance pricing agreement “APA” dated 30.03.2015 for a period of 5 years commencing from 15th April, 2015 ending on 31.03.2020 for the F.Y. 2015-16 105 & 224/K/2016 & 381/K/2017 M/s. Linde India Ltd. . Page 3 to F.Y. 2019-20. It had also application form “Roll back of APA” of the same international transactions for a period of 4 years from 01.04.2011 to 31.03.2015 for F.Y. 2011-12 to F.Y. 2014-15. He places on record the relevant unilateral “APA” certified / issued dated 26.12.2018 on record. His case therefore is that the above “APA” covers the sole issue in A.Y. 2010-11 pertaining to TP adjustment of Rs. 1,70,78,213/- regarding payment of intra-group services (IS Support Services) along with corresponding adjustments of Rs. 2,69,61,898/- in A.Y. 2011-12 and that of Rs. 7,66,62,259/- in last assessment year coupled with latter issue(s) of TP adjustment relating to payment of Technical Assistance Fees (TAF) of Rs. 2,15,78,466/- and third substantive ground raising the same grievance of containing adjustment arrear of Rs. 3,77,95,932/-. He then invites out attention to Revenue’s appeal being ITA No. 105/K/2016 seeking to include two comparables M/s. SRF and National Peroxides pertaining to issue of Technical Assistance Fees (TAF) hereinabove. Last assessment year’s secondary substantive ground of transfer pricing adjustment of Rs. 1,27,38,549/- relevant to “Accounting Centre for Excellent Services” is also stated to be covered in the above “APA”.

We afforded sufficient opportunity to learned departmental representative. He strongly supports all the impugned adjustments. Coming to unilateral advance present agreement date 26th April, 2018, it is pleaded that the same requires factual verification at the Transfer Pricing Officer’s end. We therefore restore all the above stated issues back to the Transfer Pricing Officer for his factual verification after affording adequate opportunity of hearing to the tax-payer.

We now come to the remaining issues in assessee’s appeals relating to purchase of raw material of Rs.4,98,44,615/- sale of finished goods of Rs. 15,10,218/-, payment of cylinder rental charges of Rs. 9,62,891/- and export of capital assets of Rs. 1,15,70,189/-, totaling to Rs. 6,38,87,913/- in A.Y. 2011-12 in appeal ITA 224/K/2016. No argument was raised before us during the course of hearing in order to challenge correctness of the lower authorities’ action on all these 105 & 224/K/2016 & 381/K/2017 M/s. Linde India Ltd. . Page 4 counts. Assessment Year 2012-13 also involves other issues of payment of cylinder rental charges and export capital assets involving sums of Rs. 56,00,556/- and Rs. 6,86,42,156/- aggregating to Rs. 7,42,42,712/-. No argument has come from assessee side in the impugned assessment year as well. All these remaining adjustments and additions are confirmed therefore. We make it clear that our proceedings are recorded as per hon’ble apex court’s order dated 14.08.2017 in Writ Petition No. 99/2015 in Pradyuman Bisht vs Union of India and Ors. The assessee may apply for necessary rectification in case our instant findings are not correct at the earliest. We partly accept assessee’s latter two appeals ITA No. 224/K/2016 and 381/K/2017 for statistical purposes.

This leaves us with Revenue’s second ground in its appeal in AY. 2011-12. It seeks to revive the Assessing Officer’s action making 36(1)(va) r.w. 2(24)x_ disallowance / addition of employees’ contribution towards ESI/PF on account of its belated payment beyond the grace period but before the due date of filing return. Suffice to say, hon'ble jurisdictional high court’s decision in M/s Akzo Nobel India Ltd. vs. CIT ITA No.110 of 2011 decided on 14.06.2016 has already held such claim of ESI/PF dues paid before the due date of filing return in assessee’s favour as per CIT(A)’s detailed discussion under challenge. The Revenue fails to indicate any distinction on facts or law. We find no merit in the instant substantive ground raised at Revenue’s behest. The same is therefore rejected.

The Revenue’s former substantive ground seeking to include two comparables (supra) admittedly pertains to transfer pricing adjustment with respect to technical assistance fees which we have already restored back to the TPO (supra). This former substantive ground also follows the suit therefore. Its appeal 105/K/2016 is partly allowed for statistical purposes.

To sum up, assessee’s first appeal is accepted for statistical purposes. Its second and third appeals ITA 224/K/2016 and ITA ITA No.543/Kol/2015, 105 & 224/K/2016 & 381/K/2017 M/s. Linde India Ltd. . Page 5 381/K/2017 are partly allowed for statistical purposes and Revenue’s appeal ITA No. 105/K/2016 is partly allowed for statistical purposes.