The ACIT, 15(1)(1), Mumbai V. Emersons Process Management (India) Pvt. Ltd.. (Formerly known as Tyco Valves & Controls (India) Pvt. Ltd.), Baroda

MA 150/AHD/2021

AI Insights

The case involves the Income Tax Appellate Tribunal (ITAT) in Ahmedabad, which addressed two Miscellaneous Applications (MAs) filed by the Revenue seeking modification or recall of previous orders concerning the assessment years 2006-07 and 2007-08. The Revenue contended that there were apparent mistakes in the ITAT's earlier decisions regarding the selection and exclusion of comparable companies for determining the Arm's Length Price (ALP) of engineering services provided by the assessee. The ITAT, after considering the arguments and the legal provisions under section 254(2) of the Income Tax Act, concluded that the issues raised did not constitute apparent mistakes from the record but were rather substantive issues that had been previously adjudicated upon.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135844 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-06-2023
• Assessment Year: misc
• Appeal Filed On: 23-12-2021
• Other Referred Cases: Babasaheb Raosaheb Kobarne & ANR Vs. Pyrotek India Private Limited
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIMUKESHJAIN; WAYOFTHISMISCELLANEOUSAPPLICATIONISSEEKINGTHE

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’D”BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And MsMADHUMITAROY,JUDICIALMEMBER, 1.MANo.151/Ahd/2021 in आयकरअपीलसं ./ITANo.2779/Ahd/2012 धििाधरणवरध / Asstt.Years:2006-2007 & 2.MANo.150/Ahd/2021 in आयकरअपीलसं./ITANo.2293/Ahd/2011 धििाधरणवरध / Asstt.Year:2007-2008 A.C.I.T, 15(1)(1), Mumbai. Vs. EmersonsProcessManagement (India)Pvt.Ltd.(FormerlyKnown asM/s.TycoValves&Controls IndiaPvt.Ltd.), 302-A,IvoryTerraaceRCDutt Road,Alkapuri, Baroda-390007. PAN:AAACK8809L Revenueby:ShriMukeshJain,Sr.D.R Assesseeby:ShriS.NSoparkar,Sr.Advocate सुिवाईकीतारीख /DateofHearing:09/06/2023 घोरणाकीतारीख/DateofPronouncement:30/08/2023 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: TheRevenuebywayofthisMiscellaneousApplicationisseekingthe modification/recallingoftheorderpassedbytheITATdated22/01/2020onthe M.ANo.151/Ahd/2021withother InITANo.2279/Ahd/2012 A.Y.2006-07 2 reasoningthatthereisamistakeapparentfromtherecordundertheprovisionof section254(2)oftheAct. First,wetakeuptheMANo.151/Ahd/2021in(ITANo.2779/Ahd/2012) forA.Y.2006-07 2.Attheoutset,wenotethattherewasadelayinfilingtheMAbythe Revenuefor510days.Admittedly,thedelayinfilingtheappealsfallsduringthe covid-19periodwhereintheHon’bleHon’bleSupremeCourtvideorderdated 09/05/2022intheSLPbearingNo.2522/2022inthecaseofBabasahebRaosaheb Kobarne&ANRVs.PyrotekIndiaPrivateLimitedhasdirectedtoexcludethe periodfrom15-03-2020till31-05-2022forthepurposeoflimitation.Accordingly, afterconsideringtheoutbreakofcovid-19,weherebycondonethedelayand proceedtoadjudicatetheissueonmerit. 2.1TherevenueinthisMiscellaneousApplicationsubmittedthattheITATinits orderdated22/01/2020,hasdirectedtoexcludeandincludethecomparable beingPowersoftGlobalSolutionsLtdandAceSoftwareExportsLimited whiledeterminingtheALPofEngineeringServicesrenderedbytheassesseetoits AEafterreferringtotheAY2007-08.Aspertherevenue,theselection/rejectionof thecompanyascomparableisbasedonfacts/FARanalysiswhichmayvaryyear toyear.Therefore,itisnotnecessarytoexclude/includethecomparisonbasing onthefactthattheinclusion/exclusionofthecomparablewasdoneintheearlier/ lateryear.Thus,theLd.DRinviewoftheabovesubmittedthatthereisamistake intheorderoftheITATwhichneedstoberectifiedwithinthemeaningof provisionofsection254(2)oftheAct. 3.Ontheotherhand,theLd.ARcontendedthattheITAThaspassedits orderdated22/01/2020,afterconsideringtherelevantfactsandafterhearingthe M.ANo.151/Ahd/2021withother InITANo.2279/Ahd/2012 A.Y.2006-07 3 parties.Assuch,theorderwaspassedbytheITATafterdueapplicationofmind. Accordingly,itwascontendedbytheLd.ARthatpointingouttheapparent mistakeintheMiscellaneousApplicationintheorderoftheITATwillamountto reviewofitsownorderwhichisnotpermissibleundertheprovisionsoflaw. 4.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Theprovisionsofsection254(2)oftheAct empowerstheITATtorectifyanytypeofmistakeinitsorderprovideditshould beapparentfromtherecord.Themistakeapparentfromtherecordhasbeen subjecttocontinuouslitigation.TheHon’bleCourtstimeandagainhasdefinedthe apparentmistakesthroughjudicialpronouncementsdependingupondifferent factsandcircumstances.Assuch,theapparentmistakereferstothoseerrorsor inconsistencythatisevidentfromthefaceofthedocuments/orderoftheauthority inrespectofwhichtwoviewsarenotpossible.Theapparentmistakecanbein theformofcalculation,data,wrongassumptionoffacts,misinterpretationofthe provisionsoflaw,misreportingofincome,deduction,oranyotherrelevant information.However,themistakeswhichrequirearguments,debate,evaluation oflaw/factsinitsdetermination,thesamecannotbereferredasmistakeapparent fromtherecord.Likewise,intheeventofanyordergivenbytheITATwhichis allegedtobebasedonthegroundofwrongassumptionoffactsorlaw,butafter dueapplicationofmind,thenthesamecannotbesaidamistakeapparentfrom therecord.ItisbecausetheviewformedbytheITATafterconsideringthe necessaryfactsandthelawonthepointofdispute,thenthesamecannotbe reviewedagaininthegarbofapparentmistake.Inotherwords,theerrorof judgementcannotbedescribedasamistakeapparentfromrecord.Insucha situation,theaggrievedpartyshouldapproachthehigherforumfortheredressal oftheissueinvolvedinthedispute. 4.1Comingtothefactsofthepresentcase,wenotethattheITAThasrejected thecomparablebeingPowersoftGlobalSolutionsLtd.onthereasoningthatthe M.ANo.151/Ahd/2021withother InITANo.2279/Ahd/2012 A.Y.2006-07 4 learnedDRPhasrejectedsuchcomparableinthesubsequentassessmentyear 2007-08andfurthermoresuchcomparablewasselectedbytheTPOfortheyear underconsiderationbasingonthefactthatsuchcomparablewasselectedinthe assessmentyear2007-08.FromthefindingoftheorderoftheITAT,wenotethat theITAThasrejectedthecomparableselectedbytheTPOafterconsideringthe relevantfactsanddueapplicationofmind.Therefore,theviewformedbythe ITATcannotbesaidaserroneousbeingapparentfromtherecord.Accordingly, wearenotconvincedbytheargumentofthelearnedDRoftheRevenue. 4.2RegardingthenextgrievanceoftheRevenuefortakingupACESoftwareas oneofthecomparableforthepurposeofdeterminingtheALP,wenotethatthe ITAThasgiventhedirectiontoadoptthisimpugnedcompanyasoneofthe comparablefortworeasonsfirstlytheITATintheowncaseoftheassesseehas adoptedsuchcomparableinITANo.2993/AHD/2011andsecondly,theTPO himselfhasadoptedsuchcomparablebasingonthefactthatsuchcomparable wasselectedfortheassessmentyear2007-08aftermakingthereferencetothe assessmentyear2007-08.Thus,fromthefindingoftheorderoftheITAT,we notethattheITAThasselectedthecomparableafterconsideringtherelevant factsanddueapplicationofmind.Therefore,theviewformedbytheITATcannot besaidaserroneousbeingapparentfromtherecord.Accordingly,wearenot convincedbytheargumentofthelearnedDRoftheRevenue.Hence,theMAfiled bytheRevenueisherebydismissed. NowcomingtotheMANo.150/Ahd/2021(inITANo.2993/Ahd/2011) forAY2007-08. 5.Attheoutset,wenotethattheissuesraisedbytheRevenueinits MiscellaneousfortheA.Y2007-08areidenticaltotheissuesraisedbythe RevenueinMANo.151/Ahd/2021forAY2006-2007in(ITANo.2779/Ahd/2012) exceptthenameofcomparablei.e.KARmobilesinpresentMA.However,the M.ANo.151/Ahd/2021withother InITANo.2279/Ahd/2012 A.Y.2006-07 5 otherfactsandcircumstancesremainthesame.Therefore,thefindingsgivenin MANo.151/Ahd/2021forAY2006-07shallalsobeapplicablefortheyearunder considerationi.e.AY2007-08.TheMAoftheRevenuefortheassessment2006-07 hasbeendecidedbyusvideparagraphNo.4ofthisorderagainsttheRevenue. ThelearnedARandtheDRalsoagreedthatwhateverwillbe,thefindingsforthe assessmentyear2006-07shallalsobeappliedfortheyearunderconsiderationi.e. AY2007-08.Hence,theMAfiledbytheRevenueisherebydismissed. 5.1Intheresult,theMAoftheRevenueisherebydismissed. 6.Inthecombinedresult,boththeMiscellaneousApplicationfiledbythe Revenueareherebydismissed. OrderpronouncedintheCourton30/08/2023atAhmedabad. Sd/-Sd/- (MADHUMITAROY)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated30/08/2023 Manish