Full Text
Translation output
. .
'■$~2,'-- '- ' _;.f • '/. ■ ■ ;'■
HIGH COURT OF DELHI
•; ■■ , ITA 124/2017' -y., ■ y'-'} ■
. . THEPR. COMMISSIONBR OF INCOME TAX-4....; Appellant -
" , , Through :'SK. Puneeit Rai, Advocate! versus. ^- C ■
; ICON SATELLITE & TELECOMPVT.LTD. . : !Respondent -
: : ' . ■ - Through: None. - - . , . .
" CORAM: ■ "V:;' . - ■ "'.y
HpNVBLEMR, JUSTICE S.RAVINPRA BHAT ' HdN'BLEMR. JUSTICENAJMIWAZIRI -
' : : ' ORDER y. . ? ' '
■ % ^ _ ' -()3.03:2017 / ^ ^ ' t,i96i ;
(hereafter "the Aet"), the Revenue is.aggrieved by the order of the.
Income Tax Appellate Tribunal' (ITAT) for' AY 2009-10. The
- ' question' of laiw .urged is with.respect to the genuineness of.the
- discount'oL?l',07,87,411/-provided to a. related party, i.e. a sister., eoficem in respect of its sales denoting it to be of the volumerThe
: value, of the transactions with the:related.yarty, i.e. The said sister
, ' ' edncem was to the tune of ?232.67 crores; The total sales,turnover of "
.the assessee was 11,91,60,610/^. The Assessing oiffieef (AO) had added, back the said amount of ?1,07,87,411/-. under Section. .
. 40A(2)(b) of the Act. The GIT(A) jprpvided relief on the third,ground, . '
; -that the addition was- reyenue neutral. The.Reyenue appealed to. the -
ITAT which reliedupon the judgrhpnt of the Supreme Court in CITv.
. ; ExcelIndustries Limited(2013) .358 ITR 295 (SCj. It~also^.end6rsed
2017:DHC:9038-DB a the,view ofCIT(A)who had relied upon CIT y. Gautam Motors 2011
(334)ITR326(Del). , ,' ' - Learned counsel urges that a substantial question oflaw arises and that the ITAT fell into error because it ignored two salient aspects, i.e. that the discount was so arranged as to have the least tax impact on both the sister concerns, i.e. related parties ofthe assessee.
On this, if is urged that the discounts were given only in respect of transaction aggregating at ?1,07,87,411/- -out of a total amount of
?232.67 crores. The second aspect urged is that no explanatioft was
• * *' forthcoming about why a similar discount was not given to similar parties for previous years. These two aspects stood out'in the assessee's case,justifying the addition under Section 40A. , This Court has considered the submissions. The ITAT followed the reasoning of the Supreme Court in'Excel Industries (supra) and also thejudgment in CITv. Glaxo Smithkline Asia(P)iLtd. 2010(195)
Taxmann 35. The lack ofany scrutiny by the AO as to the nature of discounts provided to third parties, in our opinion, justified the
ITAT's conclusions that in the circumstances of the case, the disallowance made under Section 40A could not be sustained.
No substantial question oflaw arises. The appeal is accordingly dismissed. •
S.RAVINDRA BHAT,J NAJMI WAZIRI,J MARCH 03,2017/ajk -
2017:DHC:9038-DB
'■$~2,'-- '- ' _;.f • '/. ■ ■ ;'■
HIGH COURT OF DELHI
•; ■■ , ITA 124/2017' -y., ■ y'-'} ■
. . THEPR. COMMISSIONBR OF INCOME TAX-4....; Appellant -
" , , Through :'SK. Puneeit Rai, Advocate! versus. ^- C ■
; ICON SATELLITE & TELECOMPVT.LTD. . : !Respondent -
: : ' . ■ - Through: None. - - . , . .
" CORAM: ■ "V:;' . - ■ "'.y
HpNVBLEMR, JUSTICE S.RAVINPRA BHAT ' HdN'BLEMR. JUSTICENAJMIWAZIRI -
' : : ' ORDER y. . ? ' '
■ % ^ _ ' -()3.03:2017 / ^ ^ ' t,i96i ;
(hereafter "the Aet"), the Revenue is.aggrieved by the order of the.
Income Tax Appellate Tribunal' (ITAT) for' AY 2009-10. The
- ' question' of laiw .urged is with.respect to the genuineness of.the
- discount'oL?l',07,87,411/-provided to a. related party, i.e. a sister., eoficem in respect of its sales denoting it to be of the volumerThe
: value, of the transactions with the:related.yarty, i.e. The said sister
, ' ' edncem was to the tune of ?232.67 crores; The total sales,turnover of "
.the assessee was 11,91,60,610/^. The Assessing oiffieef (AO) had added, back the said amount of ?1,07,87,411/-. under Section. .
. 40A(2)(b) of the Act. The GIT(A) jprpvided relief on the third,ground, . '
; -that the addition was- reyenue neutral. The.Reyenue appealed to. the -
ITAT which reliedupon the judgrhpnt of the Supreme Court in CITv.
. ; ExcelIndustries Limited(2013) .358 ITR 295 (SCj. It~also^.end6rsed
2017:DHC:9038-DB a the,view ofCIT(A)who had relied upon CIT y. Gautam Motors 2011
(334)ITR326(Del). , ,' ' - Learned counsel urges that a substantial question oflaw arises and that the ITAT fell into error because it ignored two salient aspects, i.e. that the discount was so arranged as to have the least tax impact on both the sister concerns, i.e. related parties ofthe assessee.
On this, if is urged that the discounts were given only in respect of transaction aggregating at ?1,07,87,411/- -out of a total amount of
?232.67 crores. The second aspect urged is that no explanatioft was
• * *' forthcoming about why a similar discount was not given to similar parties for previous years. These two aspects stood out'in the assessee's case,justifying the addition under Section 40A. , This Court has considered the submissions. The ITAT followed the reasoning of the Supreme Court in'Excel Industries (supra) and also thejudgment in CITv. Glaxo Smithkline Asia(P)iLtd. 2010(195)
Taxmann 35. The lack ofany scrutiny by the AO as to the nature of discounts provided to third parties, in our opinion, justified the
ITAT's conclusions that in the circumstances of the case, the disallowance made under Section 40A could not be sustained.
No substantial question oflaw arises. The appeal is accordingly dismissed. •
S.RAVINDRA BHAT,J NAJMI WAZIRI,J MARCH 03,2017/ajk -
2017:DHC:9038-DB
JUDGMENT