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Income Tax Appellate Tribunal, PUNE BENCH, ‘C’ PUNE – VIRTUAL COURT
Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI
PER R.S.SYAL, VP :
This appeal by the assessee is directed against the final
assessment order dated 28-11-2019 passed by the Assessing Officer
(AO) u/s.143(3) r.w.s.147 r.w.s.144C(13) of the Income-tax Act,
1961 (hereinafter called ‘the Act’) in relation to the assessment year
2015-16.
The first issue raised in this appeal is against the transfer
pricing addition of Rs.10,22,00,000/-. Shorn off unnecessary
details, it is seen that the Transfer Pricing Officer (TPO) proposed
transfer pricing addition of Rs.10.22 crore vide his order dated
2 ITA No.128/PUN/2020 M/s. Vishay Components India Private Limited
31-10-2018. The draft order was notified on 21-12-2018
incorporating the said adjustment. Thereafter, the assessee moved
rectification application u/s.154 of the Act before the TPO, who
vide his order dated 30-07-2019 concluded that : “As a result of this
order, the adjustment proposed vide order u/s.92CA(3) 31.10.2018
stands reduced to Rs. NIL.” During the course of the proceedings
before the Dispute Resolution Panel (DPO), the assessee placed on
record a copy of the rectification order. The DRP took cognizance
of the rectification order and concluded at page 27 of its direction
dated 28-08-2019 that : “The result of the above order made by the
TPO, the adjustment now stands NIL and therefore other grounds
become academic in nature.” While passing the final assessment
order, the AO noted this fact at the table drawn on page 3 of his
order, but while computing the total income, inadvertently, again
added Rs.10.22 crore by relying on the original order passed by the
TPO. It is thus manifest that the direction given by the DRP has not
been properly given effect to by the AO in the final assessment
order. Section 144C(13) of the Act categorically provides that:
`Upon receipt of the directions issued under sub-section (5), the
Assessing Officer shall, in conformity with the directions, complete,
notwithstanding anything to the contrary contained in section
3 ITA No.128/PUN/2020 M/s. Vishay Components India Private Limited
153 or section 153B, the assessment …’. Under such
circumstances, we set aside the impugned order and direct him to
pass the final order in conformity with the direction of the DRP as
extracted hereinabove.
The only other ground which survives in this appeal is against
the disallowance made u/s.40(a)(i) of the Act. Succinctly, the facts
of the ground are that the assessee paid a sum of Rs.7,11,14,060/- to
its associated enterprise, viz., Vishay Intertechnology Asia Pte Ltd.,
Singapore, without deduction of tax at source. On being called
upon to explain as to why disallowance u/s.40(a)(i) be not made for
non-deduction of tax at source, the assessee submitted that the
payment was in the nature of reimbursement and neither Royalty
nor Fees for technical services requiring any tax deduction. Not
convinced, the AO, made the disallowance, consistent with the view
taken by him on this score for the assessment years 2012-13, 2013-
14 and 2014-15.
Having heard the rival submissions and gone through the
relevant material on record, it is seen that identical issue came up
for consideration before the Tribunal for the earlier years.
Discussing it at para 9 onwards of its order dated 19-01-2021 in ITA
No. 1969/PUN/2018 for the assessment year 2014-15, the Tribunal
4 ITA No.128/PUN/2020 M/s. Vishay Components India Private Limited
has finally decided it in the assessee’s favour. Similar disallowance
made u/s.40(a)(i) came to be considered by the Tribunal for the
assessment year 2012-13, which also got deleted. The ld. DR fairly
conceded the position. Respectfully following the orders passed by
the Tribunal in the assessee’s own case for the earlier years, we
overturn the impugned order and delete the disallowance u/s.40(a)(i)
of the Act.
In the result, the appeal is partly allowed. Order pronounced in the Open Court on 25th May, 2021.
Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 25th May, 2021 सतीश आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent; 2. 3. The CIT(A)-13, Pune 4. The PCIT-5, Pune 5. DR, ITAT, ‘C’ Bench, Pune गाड� फाईल / Guard file. 6.
आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.128/PUN/2020 M/s. Vishay Components India Private Limited
Date 1. Draft dictated on 25-05-2021 Sr.PS 2. Draft placed before author 25-05-2021 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.
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