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TMI Blog2021 (2) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... id to Nike International Limited. Subsequently, notice u/s 148 of the I.T.Act was issued and draft assessment order dated 16.12.2016 was passed by making transfer pricing adjustment of Rs. 6,62,47,745 relating to reimbursement of expenses paid by the assessee to its AE, namely, Nike Inc. USA. The assessee filed objections before the Dispute Resolution Panel (DRP) against the draft assessment order dated 16.12.2016. The DRP rejected the objections raised by the assessee. Accordingly, the final assessment order was passed on 27.10.2017. 3. The assessee being aggrieved, has filed this appeal before the Tribunal. Two issues are raised in this appeal, viz., (i) reassessment is bad in law. (ii) Whether the authorities were justified in making TP adjustment pertaining to reimbursement of expenses. 5. We shall first adjudicate the issue of validity of reopening of assessment. The learned AR submitted that the A.O. has reopened the assessment after expiry of 4 years from the end of the assessment year without mentioning that there is failure on the part of the assessee to disclose truly and correctly all material facts necessary for assessment. The learned AR stated that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be at arm's length. The Ld. A.R. submitted that the TPO/AO had taken a conscious view on the matter of reimbursement of expenses during the course of original assessment proceedings. However, the AO has reopened the assessment for considering the very same issue, in view of the subsequent decision rendered by the Tribunal against the assessee in assessment year 2005-06 and 2006-07. Hence, it is a clear case of change of opinion and reopening is not permissible as held by Hon'ble Supreme Court in the case of Kelvinator India Ltd. (2010) 320 ITR 561. Accordingly, the Ld. A.R. submitted that the reopening is bad in law and accordingly, the impugned assessment order is liable to be quashed. 6. The learned Departmental Representative relied on the finding of the DRP. Further, the learned DR submitted that the reopening was done by the A.O. on account of fresh facts coming to his notice as a result of order passed by the Tribunal against the assessee in assessment year 2005-06 & 2006-07. The learned DR submitted that the TPO has held the reimbursement of expenses to be at arm's length in the original assessment proceedings based on the explanations given by the assessee that these expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPO in the course of original assessment proceedings, vide notice dated 25.02.2011, had directed the assessee to furnish the details with regards to the payments towards recharge of expenses amounting to Rs. 6,62,47,745. In reply to the notice of the A.O., the assessee vide letter dated 13.04.2011 had disclosed all the relevant materials with regard to the payments towards recharge of expenses. The assessee's submissions dated 13.04.2011 is placed on record (Refer page 1 to 24 of assessee's paper book dated 04.04.2018). The AO/TPO after applying his mind and considering the submissions of the assessee, had accepted the arms length price on reimbursement of expenses amounting to Rs. 6,62,47,745 without making any TP adjustment towards the same. Thus, it is clear that the assessee had disclosed all the material facts during the regular assessment proceedings. The reopening of assessment proceedings has been initiated on the basis of ITAT's order pertaining to assessee's own case for assessment years 2005-2006 and 2006-2007. The reasons recorded for reopening the assessment for the relevant assessment year is placed at page 52 to 53 of the paper book filed by the assessee. On perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not. In the event of arriving at such a belief that it was because of the petitioner's failure, he should have recorded the same in the order. That is the legal requirement. Only if the twin conditions, as laid down by the Supreme Court, are satisfied by way of recording reasons for both the conditions in the order, the Assessing Officer will get jurisdiction to issue notice under section 148 after the expiry of four years from the end of the relevant assessment year. Since the same had not been done the impugned notices were wholly without jurisdiction." 7.6 The Tribunal in assessee's own case for assessment year 2008-2009, on identical facts, had quashed the reassessment proceedings. The relevant finding of the Tribunal in assessee's own case (supra) reads as follow:- "9. We heard the rival contentions and perused the record. A perusal of reasons for reopening recorded by the A.O., which is extracted above, would show that the A.O. has reopened the assessment as a result of order passed by the Tribunal in the assessee's own case for assessment years 2005-06 & 2006- 07, wherein the Tribunal has upheld the transfer pricing adjustment made in respect of reimbursement of expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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