BANTEC TPS INDIA P. LTD, NAVI MUMBAI V. ASST CIT CIR 15(1)(2), MUMBAI

MA 228/MUM/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4440 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2012-2013
• Appeal Filed On: 11-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing
• Section: 254(2)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K, MUMBAI , ' ,# $ BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER MA NO.228/MUM/2020 [ARISING OUT OF ITA NO.2074/MUM/2017 (A.Y.2012-13)] M/S.BANC TEC TPS INDIA PVT. LTD. TRIBUNAL-341, TOWER 3, 4 TH FLOOR, INTERNATIONAL INFOTECH PARK, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 PAN: AAACT8971E ...... APPLICANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE.15(1)(2) MUMBAI ..... RESPONDENT APPLICANT BY : SHRI MADHUR AGARWAL '%&/ RESPONDENT BY : SHRI SUSHIL KUMAR MISHRA (% / DATE OF HEARING : 08/01/2021 )*+ (% / DATE OF PRONOUNCEMENT : 20/01/2021 / ORDER PER VIKAS AWASTHY, JM : THE ASSESSEE/APPLICANT HAS FILED PRESENT MISCELLAN EOUS APPLICATION UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT) SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL DATED 12/06/2020 VIDE WHICH APPEAL OF THE ASSESSEE IN ITA NO.2074/MUM/2017 FOR ASSESSMENT YEAR 2012-13 WAS DECIDED. 2 MA NO.228/MUM/2020 2. SHRI MADHUR AGARWAL APPEARING ON BEHALF OF THE A SSESSEE/APPLICANT SUBMITTED THAT WHILE ADJUDICATING THE ISSUE ON TRAN SFER PRICING RAISED IN GROUNDS NO.1 TO 8 OF THE APPEAL, THE ISSUE RAISED IN GROUND NO.7 REMAIN TO BE ADJUDICATED. IN GROUND NO.7 OF THE APPEAL THE ASSESSEE ASSAILED INCORRECT COMPUTATION OF MARGIN OF COMPARABLE COMPANIES BY ASSESSING OFFICER /TPO. DURING THE COURSE OF SUBMISSIONS THE LD. AUTHORIZED REPRESENTATIVE FOR T HE ASSESSEE REFERRED TO A CHART INDICATING THAT IN THE CASE OF ONE OF THE COM PARABLE COMPANY I.E. JINDAL INTELLICOM PRIVATE LIMITED, THE TPO HAD TAKEN WRONG OPERATING MARGIN OF THE SAID COMPANY. AS AGAINST CORRECT MARGIN OF 0.08% THE TPO TOOK MARGIN OF THE SAID COMPANY AS 6.08%. THE OBJECTION WAS REVIVED BEFORE DRP AGAINST INCORRECT MARGIN TAKEN BY TPO. THE DRP TOOK NOTE OF THIS ER ROR AND GAVE DIRECTIONS TO ASSESSING OFFICER /TPO TO EXAMINE THE CONTENTIONS O F THE ASSESSEE AND ADOPT CORRECT MARGIN. WHILE PASSING THE FINAL ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT GIVEN EFFECT TO THE ABOVE DIRECTIONS OF THE DRP. DURING THE COURSE OF HEARING OF THE APPEAL, IT WAS SUBMITTED THAT A DIRE CTION MAY BE GIVEN TO THE ASSESSING OFFICER TO GIVE EFFECT TO THE DIRECTIONS OF DRP ON THIS ISSUE. HOWEVER, WHILE DECIDING GROUND NO.1 TO 8 OF THE APPEA,L THE TRIBUNAL HAS NOT MADE ANY OBSERVATION WITH REGARD TO GROUND NO.7 OF THE APPEA L. 3. SHRI SUSHIL KUMAR MISHRA, REPRESENTING THE DEPAR TMENT VEHEMENTLY OPPOSED THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE TRIB UNAL HAS DECIDED GROUNDS RELATING TO TRANSFER PRICING ISSUE IN PARA 7 TO 8 O F THE ORDER AND ACCEPTED THE CONTENTIONS OF THE ASSESSEE FOR EXCLUSION OF TWO C OMPARABLES I.E. GENESYS INTERNATIONAL CORPORATION LTD. AND EXCEL INFOWAYS L IMITED. 4. BOTH SIDES HEARD. WE OBSERVE THAT WHILE DECIDIN G THE TRANSFER PRICING GROUNDS I.E GROUND NO.1 TO 8 OF THE APPEAL IN CONSO LIDATED MANNER, THE BENCH HAS 3 MA NO.228/MUM/2020 ONLY CONSIDERED ASSESSEES OBJECTION WITH RESPECT TO EXCLUSION OF SOME OF THE COMPARABLES. THE ASSESSEE HAS ASSAILED THE ACTION OF ASSESSING OFFICER /TPO IN NOT ACCEPTING CORRECT COMPUTATION OF MARGINS OF CO MPARABLES IN GROUND NO.7 OF THE APPEAL. FOR THE SAKE OF COMPLETENESS THE SAID G ROUND IS REPRODUCED HEREIN BELOW:- 7. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.AO/TPO ERRED IN NOT ACCEPTING THE CORRECT COMPUTATION OF MARGINS OF THE COMPARABLE COMPANIES AS SUBMITTED BY THE ASSESSEE. THE SAID GROUND REMAIN TO BE ADJUDICATED, HOWEVER , WHILE GIVING CONCLUSION IN PARA -8, IT WAS HELD THAT GROUND NO.1 TO 8 OF THE A PPEAL ARE PARTLY ALLOWED. THE INADVERTENT ERROR CREPT IN THE ORDER NEEDS RECTIFIC ATION. 5. THE ASSESSEE VIDE GROUND NO.7 OF THE APPEAL IS S EEKING A DIRECTION TO THE ASSESSING OFFICER FOR ADOPTING CORRECT MARGIN IN RE SPECT OF JINDAL INTELLICOM PRIVATE LIMITED IT HAS BEEN POINTED THAT IN THE CA SE OF JINDAL INTELLICOM PRIVATE LIMITED THE TPO HAS TAKEN MARGIN OF 6.08% INSTEAD O F 0.08%. WE OBSERVE THAT THE DRP HAS TAKEN NOTE OF THIS ERROR AS HIGHLIGHTED BY THE ASSESSEE AND HAS DIRECTED THE ASSESSING OFFICER/TPO( IN PARA 5.2 OF THE DIRECTIONS DATED 26/12/2016) TO EXAMINE THE CONTENTIONS OF THE ASSES SEE AND ADOPT CORRECT MARGIN OF THE COMPARABLES FOR BENCHMARKING THE INTE RNATIONAL TRANSACTIONS. THE ASSESSING OFFICER/TPO IS DIRECTED TO COMPLY WITH TH E DIRECTIONS OF DRP AS CONTAINED IN PARA 5.2(SUPRA). 6. THE GROUND NO.7 OF THE APPEAL IS ALLOWED FOR STA TISTICAL PURPOSE. IT IS MADE CLEAR THAT WITH RECTIFICATION OF THE ERROR AS POIN TED BY THE ASSESSEE IN THE ORDER OF TRIBUNAL DATED 12/06/2020 THERE WOULD BE NO CHANGE IN THE FINAL OUTCOME OF THE APPEAL. 4 MA NO.228/MUM/2020 7. THE MISCELLANEOUS APPLICATION BY ASSESSEE/APPLI CANT IS ALLOWED IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY TH E DAY OF 20TH , 2021. SD/- SD/- (N.K.PRADHAN) (VIKAS AWASTHY) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, -/ DATED 20/01/2021 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT , 2. '% / THE RESPONDENT. 3. /% ( )/ THE CIT(A)- 4. /% CIT 5. 23'% , . . . , / DR, ITAT, MUMBAI 6. 35678 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI