TECH MAHINDRA LTD ( FORMERLY KNOWN AS MAHINDRA BRITISH TELECOM LTD), MUMBAI V. DCIT CIR 2(3), MUMBAI

MA 276/MUM/2022

AI Insights

M/s. Tech Mahindra Ltd. filed a miscellaneous application under section 254(2) of the Income Tax Act, 1961, seeking to recall the Tribunal's order dated 23.03.2022. The application was based on the grounds that the Tribunal had not considered a relevant decision by the Hon'ble Bombay High Court in the case of CIT-9 Vs. M/s. Indo American Jewellery Ltd. while deciding on the issue of not charging interest on credits extended to its USA-Associated Enterprises. The Tribunal acknowledged the oversight and recalled the order to re-examine the issue, citing the need to avoid multiplicity of litigation and ensure justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301270 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 13-07-2023
• Assessment Year: 2004-2005
• Appeal Filed On: 29-09-2022
• Other Referred Cases: CIT-9 Vs. M/s. Indo American Jewellery Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “K”, MUMBAI BEFORE SHRI BASKARAN BR, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER MA No.276/M/2022 (Arising Out of ITA No.1034/M/2010) Assessment Year: 2004-05 M/s. Tech Mahindra Ltd. (Formerly known as Mahindra British Telecom Ltd.) Gateway Building, Apollo Bunder, Mumbai- 400 020 PAN: AAACM3484F Vs. DCIT CIR 2(3), 4A Parke Davis Complex, Sakinaka, Andhier Kurla Road, Mumbai- 400 020 (Appellant) (Respondent) Present for: Assessee by : Shri J.D. Mistry, A.R. & Shri Harsh Kapadia, A.R. Revenue by : Shri Ashok Kumar Ambastha, DR Date of Hearing : 14. 07. 2023 Date of Pronouncement : 04. 09. 2023 O R D E R Per : Kuldip Singh, Judicial Member: Heard: Applicant M/s. Tech Mahindra Ltd. (Formerly known as Mahindra British Telecom Ltd.) (hereinafter referred to as the assessee) by moving an application u/s. 254(2) of the Income Tax Act,1961(for short ‘the Act’) sought to recall the impugned order dated 23.03.2022 in ITA No. 1034 & 1035/M/2010 and ITA No.2041/M/2010 to rectify the mistake apparent on record on the MA No.276/M/2022 (Arising Out of ITA No.1034/M/2010) M/s. Tech Mahindra Ltd. (Formerly known as Mahindra British Telecom Ltd.) 2 ground that the Tribunal has not considered the decision rendered by Hon’ble Bombay High Court in case of CIT-9 Vs. M/s. Indo American Jewellery Ltd. in ITA No.1053 of 2012 dated 8 th January, 2023, while deciding the ground No.2 raised by the Assessee for not charging interest while extending credits to its USA-Associated Enterprises for payment of sale consideration of qua which addition has been made by the Assessing Officer (AO)/Transfer Pricing Officer (TPO), which was required to be deleted by the Tribunal. 2. Ld. D.R. for the Revenue opposed the application moved by the assessee on the ground that order (supra) passed by the Tribunal is in accordance with the facts and arguments addressed by the parties to the appeal and prayed for dismissal of the miscellaneous application filed by the assessee. 3. We have heard the Ld. authorized representatives of the parties to the present application, perused the order (supra) passed by the co-ordinate Bench of Tribunal and material available on record. 4. Undisputedly, co-ordinate Bench of the Tribunal decided ground No.2 raised by the assessee by returning following findings: “The Id CIT(A) has rightly pointed out that Transfer Pricing regime normally judges the transfer pricing of the tax payer based on the results rather than on the intent to shift income from one side to another In the normal ALP an element of implied interest would always have been there so as to compensate for the opportunity cost and notional financial cost associated with account receivable! Adjustments so called for Thus, USD LIBOR rate at that point of time was 1.22% with markup of 80 basis point would be appropriate for determining ALP interest for trade credit which was be charged to the AF. Thus, the CIT(A) granted the partial relief thereby making adjustment at the rate of Rs 37,50,475 But this observation appears to be vague as no period was quantified or verified by the Assessing Officer as well as by the CIT(A) while giving this partial relief. This needs to be verified MA No.276/M/2022 (Arising Out of ITA No.1034/M/2010) M/s. Tech Mahindra Ltd. (Formerly known as Mahindra British Telecom Ltd.) 3 Therefore, we are remanding back this issue to the file of the Assessing Officer/Transfer Pricing Officer to verify the period as well as the interest rate which is available at that particular point of time in the open market and as per the practice on...” 5. It is undisputed fact on record that impugned order (supra) was passed by the Tribunal in ITA No.1034 & 1035/M/2010 having identical ground No.2. It is also not in dispute that co-ordinate Bench of the Tribunal vide order dated 13.04.2023 passed in MA Nos.277/M/2022 & 327/M/2022 recalled the order (Supra) passed in ITA No.1035/M/2010 on the ground that decision of the Hon’ble Jurisdictional High Court has not been considered while deciding ground No.2. 6. It is surprising that how the assessee has filed two miscellaneous applications on same cause of action arisen out of same order (supra) passed by the Tribunal having identical grounds and grievance, whereas single application could have been filed to curtail the litigation. 7. However, in the interest of justice application under consideration is being decided on merits. When the issue raised by the assessee by virtue of the ground No.2 has already been dealt with in the decision rendered by Hon’ble Bombay High Court in case of M/s. Indo American Jewellery Ltd. (supra), but the same has not been considered by the co-ordinate bench while passing the order dated 23.03.2022 (supra), this is certainly a mistake apparent on record. Moreover, in the connected ITA No.1035/M/2010, MA filed on the same ground has already been allowed vide order dated 13.04.2023. So to decide the issue once for all and to further curtail the multiplicity of litigation, order (supra) passed by the co-ordinate MA No.276/M/2022 (Arising Out of ITA No.1034/M/2010) M/s. Tech Mahindra Ltd. (Formerly known as Mahindra British Telecom Ltd.) 4 Bench of the Tribunal is hereby recalled to decide afresh after providing opportunity of being heard to the assessee. Registry is directed to list the appeal No.1034/M/2010 for the AY 2004-05 in due course. 8. Resultantly, miscellaneous application filed by the assessee is hereby allowed. Order pronounced in the open court on 04.09.2023. Sd/- Sd/- (BASKARAN BR) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 04.09.2023. * Urmila Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.