M/s. M Modal Global Services Pvt. Ltd., Bangalore V. Commissioner of Income Tax (Appeals)4, Bangalore

MA 260/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9204 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 30-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SREENANDINI DAS
• Assessee Lawyers: KARISHMA R PHATARPHEKAR CA LLB
• Keywords: Related party transaction; Transfer pricing; Opportunity of being heard; International transaction; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P BOA Z , ACCOUNTANT MEMBER MP NOS.260 AND 261/BANG/2018 (IN IT(TP)A NO S . 196 AND 176 /BANG/201 2 ) ASSESSMENT YEAR : 20 05 - 06 M/S. M MODAL GLOBAL SERVICES PVT. LTD., (FORMERLY CBAY SYSTEMS (INDIA) PVT. LTD.,) 1 ST FLOOR, UNIT NO. 103, RELIABLE PLAZA, PLOT NO. K 10, KALWA INDUSTRIAL AREA, VILLAGE- ELTHEN, TALUKA & DISTRICT THANE, AIROLI, NAVI MUMBAI, MAHARASHTRA 400 708. PAN : AA A C H 6644 N VS. THE COMMISSIONER OF INCOME TAX, APPEALS (IV), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : MS. KARISHMA R. PHATARPHEKAR, CA, LLB REVENUE BY : SMT. SREE NANDINI DAS, ADDL. CIT DATE OF HEARING : 05 . 10 .201 8 DATE OF PRONOUNCEMENT : 19 . 1 2 .201 8 O R D E R PER JASON P BOAZ, ACCOUNTANT MEMBER THESE MISCELLANEOUS PETITIONS (M.P.) FILED BY ASSESSEE ARISES OUT OF THE TRIBUNALS ORDER IN IT(TP)A NO. 196/BANG/2012 AND IT(TP)A NO. 176/BANG/2012 DATED 29.05.2015 FOR ASSESSMENT YEAR 2005-06. ACCORDING TO THE SUBMISSIONS OF THE ASSESSEE IN THE MP, THE MISTAKES APPARENT FROM THE RECORD THAT HAVE CREPT INTO THE TRIBUNALS ORDER FOR ASSESSMENT YEAR 2005-06 ARE AS UNDER: M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 2 OF 12 A) DECISION OF THE TRIBUNAL, WITHOUT ANY ARGUMENTS MADE BY ANY OF THE PARTY, IS A MISTAKE APPARENT FROM RECORD AND MAY BE RECTIFIED. B) DECISION OF THE TRIBUNAL, MAKING FURTHER OBSERVATIONS EXCEEDING THE OBSERVATIONS ALREADY MADE BY THE TRIBUNAL IN RESPECT OF VERY ASSESSEE IN EARLIER YEAR. C) DECISION OF THE TRIBUNAL, INCORRECTLY MENTIONS THAT IN THE ASSESSEES APPEAL SUB-GROUND NOS. 4 TO 6 RELATE TO THE ACTION OF THE TPO IN REJECTING THE ASSESSEES TP STUDY AND CONDUCTING A FRESH BENCHMARKING ANALYSIS. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THIS MP ARE AS UNDER: 2.1 THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING MEDICAL TRANSCRIPTION SERVICES AND HAS CHARACTERIZED ITSELF AS AN IT ENABLED SERVICE (ITES) PROVIDER. THE ASSESSEE CONDUCTED A TP STUDY BY ADOPTING TNMM AS THE MOST APPROPRIATE METHOD (MAM) TO BENCHMARK ITS INTERNATIONAL TRANSACTIONS AND THEREBY CHOSE CERTAIN COMPANIES AS ITS COMPARABLES. THE TRANSFER PRICING OFFICER (TPO) REJECTED THE ASSESSEES TP STUDY FOR CERTAIN REASONS AND CONDUCTED A FRESH COMPARABILITY ANALYSIS. THE TPO ALSO ADOPTED TNMM AS THE MAM BUT APPLIED HIS OWN FILTERS AND SELECTED A SET OF COMPARABLE COMPANIES TO DETERMINE THE ARMS LENGTH PRICE (ALP) OF THE INTERNATIONAL TRANSACTIONS. ON THE BASIS OF THE FINAL SET OF COMPARABLE COMPANIES SELECTED BY HIM, THE TPO VIDE ORDER U/S 92CA OF THE ACT DETERMINED THE ALP OF THE INTERNATIONAL TRANSACTIONS AT 25.50% LEADING TO AN ADJUSTMENT OF RS.7,62,86,761/-. THE ASSESSING OFFICER (AO) THEN PASSED THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2005-06 U/S 143(3) OF THE ACT DATED 11.12.2008, INTER ALIA, INCORPORATING THE TP ADJUSTMENT PROPOSED BY THE TPO. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 11.12.2008 FOR ASSESSMENT YEAR 2005-06 , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-IV, BANGALORE RAISING VARIOUS GROUNDS, INTER ALIA, RELATING TO THE REJECTION OF ITS TP STUDY, COMPARABLE M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 3 OF 12 COMPANIES SELECTED AND INCLUDED BY THE TPO AND CERTAIN COMPANIES EXCLUDED BY THE TPO FROM THE ASSESSEES SET OF COMPARABLE COMPANIES; BESIDES OTHER GROUNDS RELATING TO TRANSFER PRICING ISSUES. THE CIT(A) DISPOSED OFF THE ASSESSEES APPEAL VIDE ORDER DATED 30.11.2011 AFTER EXAMINING THE ISSUES RAISED BY THE ASSESSEE ADJUDICATED THEREON; CONFIRMING THE ACTION OF THE AO/TPO ON CERTAIN ISSUES AND GRANTING THE ASSESSEE RELIEF ON CERTAIN ISSUES. BEFORE THE CIT(A), THE ASSESSEE HAD ALSO RAISED THE ADDITIONAL GROUND THAT INSTEAD OF TNMM, CUP METHOD SHOULD BE ADOPTED AS THE MAM AND IN SUPPORT THEREOF HAD FURNISHED ADDITIONAL EVIDENCE. HOWEVER, THE CIT(A) DID NOT ADMIT BOTH THE ADDITIONAL GROUNDS RAISED AS WELL AS THE ADDITIONAL EVIDENCE SUBMITTED. 2.3.1 AGGRIEVED BY THE ORDER OF CIT(A)-IV, BANGALORE DATED 30.11.2011 FOR ASSESSMENT YEAR 2005-06, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUND REGARDING APPLICABILITY OF CUP METHOD AS MAM AND WITHOUT PREJUDICE TO THE APPLICABILITY OF CUP METHOD AS MAM, HAD RAISED GROUNDS OF APPEAL ON APPLYING THE TNMM AS THE MAM. REVENUE HAD ALSO FILED A CROSS APPEAL BEFORE THE TRIBUNAL ON THE ISSUES ON WHICH THE CIT(A) HAD GRANTED THE ASSESSEE RELIEF. THE TRIBUNAL HEARD THE CROSS APPEALS FOR ASSESSMENT YEAR 2005-06 TOGETHER AND PASSED A CONSOLIDATED ORDER DATED 29.05.2015 IN IT(TP)A 176 AND 196/BANG/2012 ADJUDICATING ON VARIOUS ISSUES RAISED AND URGED BY BOTH PARTIES. 2.3.2 THE TRIBUNAL HAD FIRST TAKEN UP THE GROUNDS RAISED BY REVENUE AND HAD ADJUDICATED THE FOLLOWING TRANSFER PRICING ISSUES: (I) RELATED PARTY TRANSACTIONS (RPT) (GROUND NO. 3); (II) SIZE, TURNOVER AND BRAND (GROUND NO. 4); (III) STANDARD DEDUCTION @ 5% (GROUND NO. 5) 2.3.3 (I) ON THE RPT ISSUE, THE CIT(A) HAD DECIDED THAT COMPANIES WITH ANY RPT SHOULD BE EXCLUDED FROM THE SET OF COMPARABLES. THE TRIBUNAL IN ITS ORDER HAS POINTED M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 4 OF 12 OUT THAT THE VIEWS OF THE CIT(A) ON RPT IS NOT IN TUNE WITH THE DECISION OF THE TRIBUNAL IN SEVERAL CASES ON THIS ISSUE, INCLUDING THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF 24/7 CUSTOMER.COM PVT. LTD., IN ITA NO. 227/BANG/2010 DATED 9.11.2012; CITED IN THE ORDER AND REITERATED ITS DECISIONS THEREIN (SUPRA) THAT COMPANIES WITH RPT IN EXCESS OF 15% REVENUE ONLY ARE TO BE EXCLUDED FROM THE SET OF COMPARABLES. THE TRIBUNAL ALSO NOTED THAT EVEN THOUGH THE CIT(A) HAD EXCLUDED 5 COMPANIES FROM THE SET OF COMPARABLES, ONLY 3 OF THEM HAVE RPT AND ONE OF THE THREE WAS A COMPANY CHOSEN AS A COMPARABLE BY THE ASSESSEE. AFTER POINTING OUT THIS FACTUAL ERROR, THE TRIBUNAL HAD REMITTED THIS ISSUE TO THE TPO FOR THE LIMITED PURPOSE OF VERIFYING THE PERCENTAGE OF RPT TO THEN DECIDE THE COMPARABILITY OF THESE COMPANIES. 2.3.4 (II) ON THE ISSUE OF TURNOVER FILTER, THE TRIBUNAL REITERATED THE CO-ORDINATE BENCH DECISION IN THE CASE OF GENISYS INTEGRATING SYSTEMS (INDIA) PVT. LTD., (ITA NO. 1231/BANG/2010) TO APPLY THE UPPER TURNOVER LIMIT OF RS. 200 CRORES AND UPHELD THE DECISION OF THE CIT(A) IN EXCLUDING WIPRO BPO SOLUTIONS LTD., FROM THE SET OF COMPARABLES; THEREBY UPHOLDING THE RELIEF GRANTED TO THE ASSESSEE. 2.3.5 (III) ON THE ISSUE OF STANDARD DEDUCTION, THE TRIBUNAL HELD THAT IN VIEW OF THE AMENDMENT BROUGHT ABOUT IN THE ACT W.E.F. 01.04.2002 BY THE INTRODUCTION/INSERTION OF SECTION 92C(2A) OF THE ACT BY FINANCE ACT, 2012, THE DECISION OF THE CIT(A) IN GRANTING 5% STANDARD DEDUCTION IS NOT CORRECT AND HENCE REVERSED THE DECISION OF THE CIT(A). 2.4.1 AFTER ADJUDICATING ON THE GROUNDS RAISED BY REVENUE AS SUMMARIZED ABOVE IN PARAS 3.1 TO 3.5 OF THIS ORDER, THE TRIBUNAL IN ITS ORDER FOR ASSESSMENT YEAR 2005-06 THEN ADJUDICATED ON THE GROUNDS RAISED BY THE ASSESSEE. EACH OF THE GROUNDS RAISED WAS ADJUDICATED IN THE SEQUENCE IN WHICH THEY HAD BEEN RAISED. THE SUBSTANTIVE ISSUES ADJUDICATED IN THE ASSESSEE APPEAL ARE AS UNDER: M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 5 OF 12 (I) ADOPTION OF CUP AS THE MAM (GROUND NO. 3) (II) REJECTION OF THE ASSESEES TP STUDY BY THE TPO (GROUND NOS. 4 TO 6) (III) ACTION OF THE TPO IN NOT GRANTING ADJUSTMENTS FOR COMPARABILITY (GROUND NO. 7); (IV) PARENT COMPANY LOSSES (GROUND NO. 9) ON EACH OF THESE ISSUES, THE PRINCIPLES ALREADY DECIDED AND LAID DOWN IN VARIOUS DECISIONS OF THE TRIBUNAL WERE REITERATED AND ISSUES ADJUDICATED ACCORDINGLY. 2.4.2 (I) ON THE ISSUE OF ADOPTION OF CUP AS THE MAM RAISED FOR THE FIRST TIME BY THE ASSESSEE BEFORE THE CIT(A) AND BEFORE THE TRIBUNAL (GROUND NO. 3); IT WAS BROUGHT TO THE NOTICE OF THE TRIBUNAL THAT ON SIMILAR FACTS, THE TRIBUNAL IN THE EARLIER ASSESSMENT YEAR 2004-05, HAD REMANDED THE ISSUE OF ADOPTION OF THE MAM TO THE TPO. IN THE LIGHT OF THE DECISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05, THE TRIBUNAL, IN THE IMPUGNED ORDER DATED 29.05.2015 HAD REMANDED THE ISSUE OF DETERMINATION OF ALP TO THE TPO. WHILE DOING SO, THE TRIBUNAL AT PARA 16.6.1 OF THE ORDER HAD SPECIFICALLY MENTIONED THAT, WE ALSO MAKE IT CLEAR THAT IN THE EVENT OF TNMM BEING CONSIDERED AS MAM, THE OTHER DIRECTION GIVEN IN THIS ORDER IN DETERMINATION OF ALP WILL NOT HOLD GOOD. 3.1 THE ASSESSEE HAD EARLIER FILED AN MP NO. 49 & 50/BANG/2016 BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 22.07.2016 HAD DISMISSED THE MP. WHILE DOING SO, THE TRIBUNAL HAD OBSERVED THAT NO AFFIDAVIT WAS FILED BY THE ASSESSEES COUNSEL ON THE AVERMENT THAT SHE HAD NOT ARGUED ON THE VARIOUS ISSUES ADJUDICATED BY THE TRIBUNAL. AGAINST THIS DECISION, THE ASSESSEE MOVED THE HONBLE HIGH COURT; WHICH HAS VIDE ORDER DATED 02.07.2018 DISPOSED OFF THE APPEAL WITH DIRECTIONS TO THE ASSESSEE TO FILE A FRESH MISCELLANEOUS APPLICATION AS THE ISSUE RAISED IS A QUESTION OF FACT AND IT IS A MATTER OF RECORD WHETHER A PARTICULAR AFFIDAVIT WAS FILED OR NOT. THE HONBLE HIGH COURT OBSERVED THAT IF A MISCELLANEOUS APPLICATION IS FILED WITHIN 30 M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 6 OF 12 DAYS, WE EXPECT THE TRIBUNAL TO PASS APPROPRIATE ORDERS ON MERITS AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL MATRIX, THE ASSESSEE HAS FILED THE PRESENT MP. IN VIEW OF THE ABOVE MENTIONED OBSERVATION OF THE HONBLE HIGH COURT, WE DEEM IT APPROPRIATE TO ADMIT THIS APPLICATION; WITHOUT GOING INTO THE QUESTION OF WHETHER THIS MP IS WITHIN THE TIME LIMIT SPECIFIED BY THE ACT; AND PROCEED TO DISPOSE OFF THE APPLICATION, ON MERITS, AS DIRECTED BY THE HONBLE HIGH COURT. 4.1 THE MAIN AVERMENT/SUBMISSION OF THE LEARNED AR OF THE ASSESSEE IS THAT THE ONLY SUBSTANTIVE ISSUE TO BE DECIDED BY THE TRIBUNAL IS THE REJECTION AND NON ADMISSION BY THE CIT(A) OF THE ADDITIONAL GROUND AND THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ON THE QUESTION/ISSUE OF ITS PLEA FOR ADOPTION OF CUP METHOD AS THE MAM. ON THIS ISSUE, A CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 IN ITS ORDER IN ITA NO.788/BANG/2012 DATED 23.01.2012 HAD REMANDED THE ISSUE BACK TO THE FILE OF THE TPO FOR FRESH DETERMINATION AND THEREFORE THIS DECISION HAD TO BE FOLLOWED FOR THE YEAR UNDER CONSIDERATION; I.E., FOR ASSESSMENT YEAR 2005-06 ALSO. ONCE THE DECISION OF THE TRIBUNAL FOR THE EARLIER YEAR ON THE VERY SAME ISSUE IS FOLLOWED, AS THE TRIBUNAL HAS DONE IN THE IMPUGNED ORDER FOR ASSESSMENT YEAR 2005-06, ALL OTHER ISSUES BECOME ACADEMIC IN NATURE AND THE TRIBUNAL OUGHT NOT TO HAVE ADJUDICATED ON THEM. BY ADJUDICATING ON THE OTHER ISSUES, THE TRIBUNAL HAD COMMITTED MISTAKE APPARENT FROM THE RECORD. 4.2 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT BECAUSE THE OTHER ISSUES ARE RENDERED ACADEMIC, SHE DID NOT OFFER ANY SUBMISSIONS ON THE SAME AND IF THE TRIBUNAL HAD TO DECIDE THE OTHER ISSUES, THE LEARNED AR OUGHT TO HAVE BEEN AFFORDED OPPORTUNITY TO MAKE SUBMISSIONS ON THOSE ISSUES. IT WAS SUBMITTED THAT THE LEARNED AR HAD FILED AN AFFIDAVIT ALONG WITH THE EARLIER MP THAT BOTH PARTIES HAD NOT MADE ANY SUBMISSIONS ON THE VARIOUS OTHER ISSUES DECIDED AND IT WAS ERRONEOUSLY STATED IN THE ORDER ON THE MP DATED 22.07.2016 THAT SUCH AN AFFIDAVIT WAS NOT FILED. M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 7 OF 12 4.3.1 WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, BUT ARE UNABLE TO AGREE WITH THE SAME. THE COUNSELS APPEARING FOR BOTH PARTIES MAY HAVE SEVERAL REASONS FOR ADDUCING ARGUMENTS ON CERTAIN GROUNDS AND NOT ADDUCING ARGUMENTS ON OTHER GROUNDS. THE LEARNED COUNSELS IN THEIR WISDOM, MAY CONCLUDE THAT CERTAIN GROUNDS ARE ACADEMIC, FRIVOLOUS OR NOT WORTHY OF THEIR ARGUMENTS. IT IS NOT FOR THE TRIBUNAL TO EDUCATE OR ADVISE THE COUNSELS AS TO WHICH GROUNDS THEY SHOULD ARGUE AND WHICH GROUNDS THEY SHOULD TREAT AS ACADEMIC OR FRIVOLOUS. THE JOB/DUTY OF THE TRIBUNAL IS TO ADJUDICATE ON THE GROUNDS RAISED IN THE APPEALS, AFTER AFFORDING BOTH PARTIES OPPORTUNITY TO MAKE THEIR SUBMISSIONS. IT IS NOT THE CASE OF THE ASSESSEE THAT THE DECISIONS HAVE BEEN TAKEN WITHOUT GIVING THE ASSESSEE/REVENUE OPPORTUNITY OF BEING HEARD. IN FACT PROPER OPPORTUNITY HAS BEEN AFFORDED TO BOTH PARTIES. IT IS JUST THAT THE LEARNED AR FELT THAT OTHER ISSUES ARE ACADEMIC AND PREFERRED NOT TO ADDUCE ANY ARGUMENTS ON THE SAME. AFTER HAVING NOT OFFERED ARGUMENTS ON CERTAIN ISSUES, THE ASSESSEE CANNOT TRY TO RE-ARGUE ITS CASE BY FILING AN MP. 4.3.2 WHAT IS IMPORTANT IS WHETHER THE TRIBUNAL HAS HELD THAT THE OTHER ISSUES ARE ACADEMIC, IN VIEW OF ITS DECISION TO REMAND THE ADOPTION OF THE MAM. THE ARGUMENTS PUT FORTH BY THE ASSESSEE COULD BE TENABLE, IF THE TRIBUNAL HAD HELD THAT THE OTHER ISSUES TO BE ACADEMIC AND THEN PROCEEDED TO ADJUDICATE ON THE SAME. THE TRIBUNAL IN THE IMPUGNED ORDER HAD NOWHERE RENDERED A FINDING THAT OTHER ISSUES ARE ACADEMIC. THE VERY FACT THAT THE TRIBUNAL HAS RENDERED DETAILED FINDINGS ON THESE ISSUES ONLY GOES TO SHOW THAT THESE ISSUES ARE REQUIRED TO BE ADJUDICATED. IN FACT, WHILE REMANDING THE ISSUE OF ADOPTION OF CUP OR TNMM AS THE MAM, THE TRIBUNAL IN THE IMPUGNED ORDER HAS SPECIFICALLY OBSERVED THAT, WE ALSO MAKE IT CLEAR THAT IN THE EVENT OF TNMM BEING CONSIDERED AS MAM, THE OTHER DIRECTION GIVEN IN THIS ORDER REGARDING DETERMINATION OF ALP WILL HOLD GOOD. M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 8 OF 12 4.3.3 THIS ONLY GOES TO SHOW THAT THE TRIBUNAL DID NOT AGREE WITH THE LEARNED AR OF THE ASSESSEE THAT OTHER ISSUES ARE ACADEMIC AND HAD GOOD REASON FOR DECIDING THE OTHER ISSUES, WHICH ALSO WILL BE DISCUSSED IN THE LATER PARAGRAPHS OF THIS ORDER. THEREFORE, THE CONTENTION THAT MERELY BECAUSE THE LEARNED AR DID NOT ADDUCE ARGUMENTS ON CERTAIN ISSUES CONSIDERING THEM TO BE ACADEMIC AND THEREFORE THE TRIBUNAL COMMITTED A MISTAKE BY ADJUDICATING ON THOSE ISSUES HAS NO MERIT. 4.3.4 IN ITS ORDER FOR ASSESSMENT YEAR 2004-05 IN THE ASSESSEES OWN CASE (SUPRA), THE TRIBUNAL HAD REMANDED THE ISSUE/MATTER OF ADOPTION OF THE MAM BACK TO THE FILE OF THE TPO AND HAD SPECIFICALLY MENTIONED THAT AT THIS POINT OF TIME, IT IS NOT COMMENTING ON THE METHOD TO BE ADOPTED WHILE DETERMINING THE ALP BY THE TPO. FOLLOWING THE ABOVE DECISION OF THE CO-ORDINATE BENCH FOR ASSESSMENT YEAR 2004-05, IN THIS ASSESSMENT YEAR ALSO, I.E., ASSESSMENT YEAR 2005-06, THE ISSUE OF ADOPTION OF MAM WAS REMANDED BACK TO THE FILE OF THE TPO FOR EXAMINATION/DETERMINATION. HOWEVER, AS DISCUSSED IN THE EARLIER PARAGRAPHS OF THIS ORDER, THE CIT(A) HAD ADJUDICATED ON CERTAIN ISSUES WHICH ARE NOT IN TUNE WITH DECISIONS RENDERED BY CO- ORDINATE BENCHES OF THIS TRIBUNAL. FURTHER, ON SOME ISSUES (FOR EG. ON THE ISSUE OF RPT), THE CIT(A) HAD ERRED ON FACTS WHILE DECIDING THE COMPARABILITY OF COMPANIES. IN CASE THE TPO SHOULD DECIDE THAT TNMM IS THE MAM, THEN HE WILL BE IN DILEMMA, AS TO WHETHER HE SHOULD FOLLOW THE ORDER OF THE CIT(A), WHO IS ALSO AN AUTHORITY SUPERIOR TO AO/TPO OR THE DECISIONS OF THIS TRIBUNAL ON THESE ISSUES. THEREFORE, IT WAS NECESSARY FOR THE TRIBUNAL TO HAVE ADJUDICATED ON THESE ISSUES, LEST THE ERRONEOUS DECISIONS OF THE CIT(A) GETS PERPETUATED. WHILE REMANDING THE ISSUE RELATING TO THE ADOPTION OF THE MAM, THE ASSESSEE CANNOT BE ALLOWED TO GET UNDUE BENEFIT, IN CASE THE TNMM IS DECIDED TO BE MAM BY THE TPO. HENCE, THE OTHER ISSUES WERE NOT ACADEMIC, AS CLAIMED BY THE LEARNED AR OF THE ASSESSEE. THE TRIBUNAL, IN ITS WISDOM, HAD CONSCIOUSLY TAKEN A DECISION TO ADJUDICATE ON THE ISSUES IT DID AND THE ASSESSEE CANNOT SEEK TO RE-ARGUE ITS CASE BY FILING MP, AFTER HAVING SUO-MOTO GIVEN UP ITS OPPORTUNITY TO ARGUE THE MATTER. M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 9 OF 12 4.3.5 IT MAY ALSO BE MENTIONED THAT NO PREJUDICE HAS BEEN CAUSED TO THE ASSESSEE, DUE TO ITS SUO-MOTO GIVING UP ITS RIGHT TO ARGUE THE OTHER ISSUES. IN ALL THE ISSUES ADJUDICATED, THE TRIBUNAL, IN THE IMPUGNED ORDER, HAS ONLY REITERATED THE PRINCIPLES ALREADY DECIDED BY VARIOUS DECISIONS OF CO-ORDINATE BENCHES OF THIS TRIBUNAL AND NO DECISION HAS BEEN RENDERED ON THE FACTS OF THE CASE. IT IS QUITE LIKELY THAT THE LEARNED AR OF THE ASSESSEE CHOSE NOT TO ADDUCE ARGUMENTS ON THESE ISSUES AS THEY ARE SETTLED ISSUES ON PRINCIPLES. BE THAT AS IT MAY, THE TRIBUNAL WAS RIGHT IN ADJUDICATING ON THE ISSUES AND THERE IS NO MISTAKE THEREIN; CERTAINLY NO MISTAKE APPARENT FROM THE RECORD. 4.3.6 IT MAY ALSO BE MENTIONED THAT THE GROUNDS RAISED IN BOTH REVENUES AND ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005-06 WERE NOT WITHDRAWN AND THE GROUNDS WERE THERE BEFORE THE TRIBUNAL. THEREFORE, THE TRIBUNAL WAS DUTY BOUND TO ADJUDICATE ON THE SAME. THE LEARNED AR FOR THE ASSESSEE MAY CONCLUDE THAT THESE GROUNDS ARE ACADEMIC, BUT WHAT IS IMPORTANT IS THAT THE TRIBUNAL DOES NOT CONSIDER THESE GROUNDS ACADEMIC, FOR THE REASONS EXPLAINED ABOVE IN THE EARLIER PARAGRAPHS OF THIS ORDER. IN THE LIGHT OF THE ABOVE, WE NOW EXAMINE THE SPECIFIC POINTS RAISED BY THE ASSESSEE IN THE MP. 5. A. DECISION OF THE TRIBUNAL, WITHOUT ANY ARGUMENTS MADE BY ANY OF THE PARTY, IS A MISTAKE APPARENT FROM RECORD AND MAY BE RECTIFIED. 5.1 THIS ISSUE HAS BEEN DISCUSSED IN DETAIL IN THE PRECEDING PARAGRAPHS OF THIS ORDER. THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. MANU P. VYAS (2013) 32 TAXMAN.COM 176 IS NOT OF ANY RELEVANCE TO THE ISSUE ON HAND. THE CASE ON HAND IS NOT ONE WHERE THE ASSESSEE WAS NOT AFFORDED AN OPPORTUNITY OF BEING HEARD. ON THE CONTRARY, THE ASSESSEE WAS DULY AFFORDED FULL OPPORTUNITY OF HEARING. THE ASSESSEE SUO-MOTO CHOSE NOT TO MAKE SUBMISSIONS ON CERTAIN ISSUES, CONSIDERING M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 10 OF 12 THEM TO BE ACADEMIC. HAVING NOT MADE SUBMISSIONS ON THE ISSUES RAISED IN THE APPEAL, THE ASSESSEE CANNOT NOW SEEK TO RE-ARGUE ITS CASE BY FILING A MISCELLANEOUS PETITION. IN ANY CASE, ALL THE ISSUES ADJUDICATED BY THE TRIBUNAL WERE ON ISSUES OF PRINCIPLES, WHICH HAD ALREADY BEEN DECIDED BY CO-ORDINATE BENCHES OF THE TRIBUNAL IN VARIOUS CASES. THEREFORE, THE DECISIONS OF THE TRIBUNAL IN THE IMPUGNED ORDER WAS ONLY A REITERATION OF THE SETTLED PRINCIPLES AND SUCH ADJUDICATION WAS REQUIRED AND NECESSARY TO CORRECT THE ERRORS IN THE DECISION OF THE CIT(A). HENCE, IN OUR CONSIDERED VIEW, THE CONTENTIONS OF THE ASSESSEE THAT THERE IS A MISTAKE APPARENT FROM RECORD IS BEREFT OF MERIT AND CONSEQUENTLY DISMISSED. 6. DECISION OF THE TRIBUNAL, MAKING FURTHER OBSERVATIONS EXCEEDING THE OBSERVATIONS ALREADY MADE BY THE TRIBUNAL IN RESPECT OF VERY ASSESSEE IN THE EARLIER YEAR 6.1 IN THIS GROUND, THE ASSESSEE CONTENDS THAT IN THE EARLIER YEAR I.E., ASSESSMENT YEAR 2004-05, THE TRIBUNAL IN ITS ORDER (SUPRA) HAD REMANDED THE ISSUE OF ADOPTION OF CUP METHOD AS MAM. BY ADJUDICATING ON OTHER ISSUES BEFORE IT, THE TRIBUNAL IN THE IMPUGNED ORDER FOR ASSESSMENT YEAR 2005-06 HAD EXCEEDED THE OBSERVATIONS OF THE TRIBUNAL IN RESPECT OF THE ASSESSEE IN THE EARLIER YEAR. 6.2 THIS GROUND IS PATENTLY ERRONEOUS AND THE AVERMENTS BY THE ASSESSEE ARE FALSE. ON THE ISSUE OF ADOPTION OF CUP AS THE MAM, THE TRIBUNAL HAD REMANDED THE MATTER BACK TO THE FILE OF THE TPO, FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2004-05. HOWEVER, IN THE YEAR UNDER CONSIDERATION I.E., ASSESSMENT YEAR 2005-06, REVENUE HAD RAISED CERTAIN GROUNDS IN THEIR CROSS APPEAL WHICH WAS BEFORE THE TRIBUNAL FOR CONSIDERATION AND WHICH REQUIRED ADJUDICATION. SIMILARLY, THE ASSESSEE HAD ALSO RAISED CERTAIN GROUNDS OF APPEAL WHICH WERE ALSO BEFORE THE TRIBUNAL AND WHICH REQUIRED TO BE ADJUDICATED. MERELY BECAUSE THE LEARNED AR OF THE ASSESSEE CHOSE TO CONSIDER THEM TO BE ACADEMIC M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 11 OF 12 IN NATURE AND DID NOT ADDUCE ANY ARGUMENTS, DOES NOT MEAN THAT THE TRIBUNAL HAD TO IGNORE THOSE GROUNDS. THE TRIBUNAL, IN ITS WISDOM, HAD DECIDED THAT THOSE ISSUES/GROUNDS NEEDED TO BE ADJUDICATED AND IN OUR CONSIDERED VIEW, THERE IS NO MISTAKE APPARENT ON RECORD IN THIS DECISION. 6.3 THE ASSESSEE HAD MADE AN ISSUE OUT OF THE PHRASE USED BY THE TRIBUNAL IN THE IMPUGNED ORDER THAT WE HAVE CONSIDERED THE RIVAL SUBMISSIONS TO SAY THAT SINCE NO ARGUMENTS WERE PUT FORTH ON THE SUBSTANTIVE ISSUE, THERE IS MISTAKE APPARENT FROM THE RECORD. THE ASSESSEES SUBMISSION IS WITHOUT ANY MERIT. THE IMPUGNED ORDER ONLY STATES THAT IT HAD CONSIDERED RIVAL SUBMISSIONS. IT DOES NOT STATE THAT BOTH THE PARTIES MADE SUBMISSIONS ON THE MERITS OF THESE SUBSTANTIVE ISSUES. THE FACT OF THE MATTER IS THAT THE SUBMISSION OF THE LEARNED AR IS THAT THE ISSUE IS ACADEMIC IN NATURE, WHICH HAS NOT BEEN ACCEPTED BY THE TRIBUNAL. THEREFORE, THIS ARGUMENT IS DEVOID OF MERIT AND IS OF NO SUBSTANCE. 7. DECISION OF THIS TRIBUNAL, INCORRECTLY MENTIONS THAT IN THE ASSESSEES APPEAL SUB-GROUNDS NO. 4 TO 6 RELATE TO THE ACTION OF THE TPO IN REJECTING THE ASSESSEES TP STUDY AND CONDUCTING A FRESH BENCHMARKING ANALYSIS 7.1 UNDER THIS GROUND, THE ASSESSEE SUBMITS THAT IT HAD CHALLENGED THE REJECTION OF COMPARABLE COMPANIES SELECTED BY THE ASSESSEE AND CHALLENGED THE INCLUSION OF COMPANIES IN THE SET OF COMPARABLES BY THE TPO IN THE SUB GROUNDS NO. 4 TO 6, BUT THE IMPUGNED ORDER OF THE TRIBUNAL ERRONEOUSLY STATES THAT THESE GROUNDS RELATE TO REJECTING THE ASSESSEES TP STUDY AND CONDUCTING A FRESH BENCHMARKING ANALYSIS BY THE TPO. 7.2 THE ARGUMENTS ADDUCED IN THIS GROUND IS FAR FETCHED IF NOT RIDICULOUS TO SAY THE LEAST. THE ASSESSEES TP STUDY INCLUDES SELECTION OF COMPARABLE COMPANIES AND REJECTION OF THE TP STUDY, BY THE TPO, AUTOMATICALLY INCLUDES REJECTION OF THE M.P. NOS. 260 AND 261/BANG/2018 (IN IT(TP)A NO. 196 AND 176/BANG/2012) PAGE 12 OF 12 COMPARABLE COMPANIES SELECTED BY THE ASSESSEE. SIMILARLY, CONDUCTING A FRESH BENCHMARKING ANALYSIS BY THE TPO INCLUDES SELECTION OF COMPARABLE COMPANIES BY THE TPO. THEREFORE, THERE IS NO MISTAKE IN THE STATEMENT MADE BY THE TRIBUNAL. IN ANY CASE, THIS GROUND HAS NO RELEVANCE TO THE ISSUE RAISED IN THE MP AND IS CONSEQUENTLY DISMISSED. 8. IN VIEW OF ALL OF THE ABOVE DISCUSSION IN THE PRE-PARAGRAPHS 2 TO 7 OF THIS ORDER, WE FIND THAT THERE IS NO MERIT IN THIS MP OF THE ASSESSEE AND THEREFORE DISMISS THE SAME. 9. IN THE RESULT, THE ASSESSEES M.P. FOR ASSESSMENT YEAR 2005-06 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF DECEMBER, 2018. SD/- SD/- BANGALORE. DATED: 19 TH DECEMBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. ( N. V. VASUDEVAN ) ( JASON P BOAZ ) VICE PRESIDENT ACCOUNTANT MEMBER