The Deputy Commissioner of Income Tax Circle-3(1)(1), Bangalore V. Nagravision India Private Limited, Bangalore

MA 138/BANG/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6648 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 25-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Related party transaction
• Section: 254(2); 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE-PRESIDENT AND SHRI B. R. BASKARAN, ACCOUNTANT MEMBER MP No.138/Bang/2021 (in IT(TP)A No.1536/Bang/2017) Assessment Year : 2013-14 The Deputy Commissioner of Income Tax, Circle – 3(1)(1), Bengaluru. Vs. Nagra Vision India Pvt. Ltd., No.301 and 302, 3 rd Floor, Campus C, RMZ Centennial EPIP, ITPL Road, Mahadevapura Post, Bengaluru – 560 048. PAN : AABCE 9614 Q APPLICANT RESPONDENT Applicant by:Shri. Sankar Ganesh K, JCIT Respondent by :None Date of hearing:10.12.2021 Date of Pronouncement:10.12.2021 O R D E R Per N.V. Vasudevan, Vice-President: This is a Miscellaneous Petition (MP) filed by the Revenue under section 254(2) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) praying for rectification of certain apparent errors in the order of the Tribunal. In the above appeal, the question for consideration was the determination of ALP in respect of international transaction of rendering software development services. One of the comparable companies included by the TPO in the order passed under section 92CA of the Act was Tech Mahindra Ltd., and its inclusion was upheld by the DRP. Before the Tribunal, the assessee sought exclusion of this company on the ground that the Related Party Transaction (RPT) was more than 25%. The Tribunal decided the issue as follows: MP No.138/Bang/2021 (in IT(TP)A No.1536/Bang/2017) Page 2 of 3 “13. As far as Tech Mahindra Ltd. is concerned. the learned counsel made a prayer that the related party transaction (RPT) of this company was more than 25%. Related Party Transaction Transaction / Net Sales 25,739,000,000 / 60,019,000,000 (42.88%). Hence, the company fails the RPT filter applied by the TPO and hence should be rejected. 14. We are of the view that it would be just and proper to set aside the order of DRP on this issue and remand the issue to AO/TPO for consideration of the contention of the assessee with regard to the exclusion of this company by application of RPT filter.” 2. In this MP, the Revenue has submitted as follows: “In this regard, it is submitted that the tax payer was provided an opportunity to submit the evidence for the claim. The AR appeared and discussed the RPT issue with the help of annual report. The TPO clarified that the RPT transactions pertaining only to SWD segment has to be taken and the ratio should be computed as RPT sales to total sales or RPT expenses to total expenses. In this case where there are both RPT revenue and expenses then the ratio should be RPT revenue + RPT expenses to Total revenue + total expenses. As per this argument, the company Tech Mahindra passes RPT filter and it has been accepted by the taxpayer to include in the final set of comparables. Therefore it is respectfully prayed that order of the Hon'ble Tribunal in IT(TP)A No. 1536/Bang/2017 dated 03.07.2020 for AY 2013-14 may be suitably modified considering the above.” 3. We have heard the submission of the learned DR who reiterated the stand of the Revenue as contained in the MP. The argument which is sought to be put forth in this MP was never raised in the course of hearing of the appeal by the learned DR. The Tribunal, on consideration of the issue, has remanded the issue to the AO/TPO for considering the application of RPT filter. It is not open to the Revenue in MP to put forth the arguments which was never raised at the time of hearing of the appeal. In the given circumstances of the case, we are of the view that there is no mistake which is apparent on the face of the record calling for interference under section 254(2) of the Act. We may also mention that under section 254(2) of the Act, the Tribunal can rectify only a mistake which is apparent on the face of the MP No.138/Bang/2021 (in IT(TP)A No.1536/Bang/2017) Page 3 of 3 record. The parties cannot seek review of the order in the garb of an application under section 254(2) of the Act. The Tribunal does not have the power to review its own order. For the reasons given above, we dismiss the MP. 4. In the result, the miscellaneous petition is dismissed. Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- Bangalore, Dated: 10.12.2021. /NS/* Copy to: 1.Appellants2.Respondent 3.CIT 4. CIT(A) 5.DR6.Guard file By order Assistant Registrar, ITAT, Bangalore. (B. R. BASKARAN) (N. V. VASUDEVAN) Accountant Member Vice President