Case Number: ITA 961/DEL/2021
Appellant: Beam Global Spirits & Wine (India) Private Limited, New Delhi
Respondent: DCIT, Circle-4(2), New Delhi
Assessment Year: 2016-17
Result: 2016-17
Case Filed on: 2021-08-12
Order Type: Final Tribunal Order
Date of Order: 2021-09-28
Pronounced on: 2021-09-28
Tribunal: IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘I-1’ BENCH, NEW DELHI (THROUGH VIDEO CONFERENCING)
Before: Shri N.K. Billaiya, Accountant Member & Shri Laliet Kumar, Judicial Member
Introduction
This appeal was filed by Beam Global Spirits & Wine (India) Private Limited against the order dated 31.03.2011, framed under Section 143(3) read with Sections 144C(13), 143(3A), and 143(3B) of the Income Tax Act, 1961, for the assessment year 2016-17. The primary issue in this case was the final assessment order issued despite the disputed tax demand being settled under the Direct Tax Vivad se Vishwas Act, 2020 (VSV Act).
Background
For the assessment year 2016-17, the appellant filed its return of income on 29.11.2016, declaring a loss of Rs. 23.29 crores. The return was processed under Section 143(1) of the Income Tax Act. Subsequently, the return was selected for scrutiny assessment, and statutory notices were issued and served upon the appellant.
The Transfer Pricing Officer (TPO) passed an order under Section 92CA(3) of the Act on 31.10.2019, proposing an adjustment of Rs. 31.59 crores by treating the Advertisement, Marketing, and Promotion expenses as an international transaction. Following the TPO’s order, the Assessing Officer (AO) issued a draft assessment order on 11.12.2019, proposing disallowances/additions amounting to Rs. 42.16 crores, including the TP adjustments.
The appellant raised objections before the Dispute Resolution Panel (DRP) on 09.01.2020. Meanwhile, the appellant sought to settle the issues arising out of the draft assessment order under the VSV Act and filed the necessary forms before the designated authority.
Key Issues and Arguments
The grievances of the appellant were as follows:
Tribunal’s Analysis and Findings
The tribunal noted the following key points:
The tribunal observed that once Form No. 5 was issued by the designated authority, the AO should not have proceeded to frame the final assessment order dated 31.03.2021. The tribunal found the AO’s action of framing the final assessment order and raising the demand despite the settlement under the VSV Act to be inappropriate.
Judgment
The tribunal quashed the final assessment order and directed the AO to decide the issue in light of the relevant provisions of the VSV Act.
Conclusion
The appeal filed by Beam Global Spirits & Wine (India) Private Limited was allowed. The tribunal quashed the final assessment order and directed the AO to consider the settlement under the VSV Act.
Final Judgment
Order pronounced in the open court on 28.09.2021.
Signed:
Shri Laliet Kumar, Judicial Member
Shri N.K. Billaiya, Accountant Member
Dated: 28.09.2021
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
Relevant Legal Provisions and Precedents
This case centered around the procedural aspects of the VSV Act and the final assessment order issued by the AO. The appellant’s compliance with the VSV Act and the issuance of Form 5 were crucial in obtaining a favorable judgment.
Impact of the Judgment
This judgment highlights the importance of adhering to the provisions of the VSV Act and respecting the finality of proceedings concluded under the Act. It underscores the need for procedural fairness and timely communication by the tax authorities.
Key Takeaways
The case emphasizes the significance of the VSV Act in resolving tax disputes and the necessity for tax authorities to adhere to the Act’s provisions. It serves as a precedent for similar cases, reinforcing the finality of settlements under the VSV Act.
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