Leighton Welspun Contractors Pvt. ... vs Assessee

2 Leighton India Contractors Private Limited.

1961 (hereinafter the Act) without informing the assessee about the reason for disregarding the Arm's Length Price and without granting due opportunity of being heard to the assessee while making the reference alongwith other grounds as raised in the grounds of appeal.

2. During hearing, the ld. counsel for the assessee, Shri Ajit Tolani, advanced his arguments which are identical to the ground raised challenging upholding the entire adjustment made to the total income of the assessee which was based upon the order of the TPO and further upheld by the ld. Commissioner of Income tax (Appeals). The ld. Counsel took us to the various pages of the voluminous paper book filed by the assessee claiming that the necessary details were filed by the assessee right from assessment stage itself which were not considered in proper perspective by the ld. Assessing Officer/TPO. It was also pleaded that even the ld. Commissioner of Income tax (Appeals) ignored the additional evidences submitted by the assessee vide submission dated 5th and 13th July, 2012 as supporting documents. The crux of arguments advanced on behalf of the assessee is that the documents/details filed by the assessee were not considered and proper opportunity was not provided to the assessee.

2.1. On the other hand, Shri S.D. Srivastava, ld. DR, defended the conclusion arrived at in the impugned order but fairly agreed that the necessary details, though filed by the assessee, before the Assessing Officer/TPO but a detailed and speaking order was not passed but added that the ld.

3 Leighton India Contractors Private Limited.

Commissioner of Income tax (Appeals) has duly considered the submissions of the assessee.

2.2. We have considered the rival submissions and perused the material available on record. The fact, in brief, are that the assessee, a private limited company, is engaged in the business of Offshore and Onshore Construction including erection and installation, offshore oil and gas operation and telecommunication projects across India, declared total taxable income of Rs.5,64,28,960/- in its return electronically filed on 30th October, 2007, which was processed u/s 143(1) of the Act on 27th February, 2009, accepting the returned income. Thereafter, the case of the assessee was selected for scrutiny, therefore, notice u/s 143(2) of the Act was issued to the assessee. The assessee filed revised return at Rs.8,51,81,900/- on 3rd March, 2009. The assessee vide letter dated 4th August, 2010, also filed revised computation of income, adding back entire expenses relating to technical service fees, having regard to the provisions of section 40(a)(i) of the Act revising its total income to Rs.26,03,03,593/- and paid taxes along with interest on the revised income. During the year under consideration, the assessee entered into international transactions with its Associated Enterprises (AE) within the meaning of section 92 of the Act. The TPO carried out transfer pricing assessment and passed order u/s 92CA(3) of the Act making addition of Rs.20,18,57,196/- on account of payment for management and technical services availed and payment of technical and consulting services. On appeal, the 4 Leighton India Contractors Private Limited.

stand of the TPO/Assessing Officer was affirmed against which the assessee is in further appeal before this Tribunal. 2.3. If the observation made by the Assessing Officer/TPO, impugned order, the assertions made by the ld. respective counsel and the material available on record, if kept in juxtaposition and analyzed, we find merit in the assertion of the ld. counsel for the assessee that voluminous paper book was filed by the assessee right from assessment stage. Thus, the observation made by the ld. Assessing Officer/TPO that necessary details were not filed by the assessee is factually incorrect. The observation made by the ld. Assessing Officer/TPO is as under:-

"During the assessment proceedings, the assessee was asked to submit documentary/supporting evidence to substantiate its claim that management, technical and support services were availed during the financial year from its AE. The assessee submitted photograph of various stages of installation of civil work carried out. However, sufficient documentary evidence to prove the receipts of services has not been substantiated by the assessee. Despite giving various opportunities, the assessee has failed to justify the management, technical and support services received from its AE. In view of the same, the above transaction of Rs.2,67,35,498/- cannot be considered to be at Arm's Length as per the Transfer Pricing Regulations. Hence, an adjustment of Rs.2,67,35,498/- is made."

2.4. We find that the necessary details with supporting evidences were filed by the assessee, whereas, the ld. TPO passed the order just in three pages in hurried manner. Without going into much deliberation and keeping in view, the principle of natural justice and to safeguard the interest of 5 Leighton India Contractors Private Limited.

both sides, we deem it appropriate to remand this appeal to the file of the ld. Assessing Officer/TPO, with a direction to examine the claim of the assessee afresh, uninfluenced by the observation made in the impugned order and decide afresh in accordance with law by passing a speaking order. Needless to mention here that due/sufficient opportunity of being heard with further liberty to furnish evidence, if any, in support of its claim, be provided to the assessee. Thus, the appeal of the assessee is allowed for statistical purposes only.

Finally, the appeal of the assessee is allowed for statistical purposes only.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 19/02/2015.

Sd/- Sd/- (B.R. Baskaran) (Joginder Singh) लेखा सदःय / ACCOUNTANT MEMBER याियक सदःय / JUDICIAL MEMBER

मुंबई Mumbai; -दनांक Dated : 19/02/2015 f{x~{tÜ? P.S/.िन.स.

आदे श क) ूितिल/प अमे/षत/Copy षत of the Order forwarded to :

1. अपीलाथ3 / The Appellant

2. ू4यथ3 / The Respondent.

3. आयकर आयु5(अपील) / The CIT, Mumbai.

4. आयकर आयु5 / CIT(A)- , Mumbai

5. /वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड% फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स4या/पत ूित //True Copy//

उप/ उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण, मुब ं ई / ITAT, Mumbai