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TMI Blog2020 (7) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... Each of the grounds 1 sub-grounds of appeal is independent 'and without prejudice to the other. 1. The Ld. Commissioner of Income-tax (Appeals) -17 ['CIT(A)'] grossly erred in law in holding that the penalty order dated 23.03.2016 passed by the Ld. Assessing Officer ('AO') under section 271AA of the Income-tax Act, 1961 ('Act') is a valid order even when - a. The show cause notice dated 12.03.2013 issued by the Ld. AO under section 274 of the Act was issued in a standard printed format without pointing out reasons for invoking penalty proceedings under section 271AA in the present case of Appellant; and b. That even impugned penalty order does not point out the specific information and document which are ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction between the Appellant and KEPTL based on which the Appellant did not maintain documentation as per section 920 of the Act and hence Appellant's case falls within the ambit of section 273B of the Act. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) gross erred in upholding the impugned penalty under section 271AA of the Act without appreciating that the Appellant furnished required documents and evidences in the course of proceedings so as to demonstrate that the transactions with respect to yarn brokerage commission rate was at arm's length and as per market rate of yarn brokerage and hence the Appellant has made sufficient compliance under the law. 6. On the facts and circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal ('ITAT') for the subject assessment year is pending for adjudication. 4. (a) On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in upholding the impugned penalty under section 271 BA of the Act without appreciating the fact that whether Kaybee Exim Pte. Ltd., Singapore ('KEPTL') and the Appellant are AEs is a debatable issue and where the Appellant follows one of the bonafide views relying on CBDT Circular and Memorandum explaining the provisions of the Finance Act 2002, the Appellant has a "reasonable cause" under section 273B of the Act for non obtaining audit report in Form 3CEB as per section 92E of the Act. (b) On the facts and circumstances of the case and in law, the Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23.03.2016. On appeal before learned CIT(A), both the orders for levying of penalty under section 271AA and 271BA was confirmed. Thus, in the aforesaid background both the appeals are filed before this Tribunal. 4. We have heard the submissions of the learned authorised representative (ld AR) for the assessee and the learned departmental representative (DR) for the revenue and perused the record carefully. At the outset of hearing the learned AR of the assessee submitted in quantum appeals before the Tribunal in ITA No. 2165/Mumbai/2015 dated 28th of 2020, the Tribunal held that the assessee and KEPL Singapore is not associated enterprises (AE). It was held that no arms length price adjustment could be made on the transaction betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing order " 2. When this appeal was called out for hearing, learned senior counsel for the assessee submitted that though this appeal involves several legal issues, including the question on validity of the reassessment proceedings, the fundamental issue in this appeal deals with the question as to whether the assessee can be said to be an 'associated enterprises', within meanings assigned under section 92A, of Kaybee Exim Pte Ltd, a Singapore based entity, and, in the event of this issue being held in favour of the assessee, all other issues will be rendered academic and infructuous. He, however, hastens to add that while this issue is now required to be decided in favour of the assessee in the light of binding judicial precedents from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tirety of the case, we have to hold that the relationship between the assessee and the KE-S was not of the AEs, and, accordingly, no arm's length price adjustments could be made on the transactions between these two entities. Ground no. 3 is thus allowed, and, as a corollary thereto, the impugned ALP adjustment must, therefore, be deleted for this short reason alone. Ordered, accordingly. 20. As we have decided the appeal on the short issue, as discussed above, we see no need to deal with the other legal and factual issues raised in this appeal. These grievances are academic at this stage. 21. In the result, the appeal is allowed in the terms indicated above." 7. Considering the finding of coordinate bench of Tribunal that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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