DCIT (IT)- RANGE 1(3)(1), , MUMBAI V. BNP PARIBAS, MUMBAI

MA 285/MUM/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3321 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 28-07-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 28-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ITS WRITTEN
• Keywords: Double taxation relief; Permanent establishment; Competent authority; TDS
• Section: 143(3); 195; 254(2); 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “I”, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER MA.No. 285/MUM/2021 [ARISING OUT OF ITA No. 7458/MUM/2018 (A.Y: 2014-15)] ACIT(IT)-1(3)(1) Room No. 1810 Air India Building, Nariman Point Mumbai – 400 021 v. M/s. BNP Paribas BNP Paribas House, 1 North Avenue Maker Maxity, Bandra Kurla Complex Bandra (E), Mumbai -400051 PAN: AAACB4868Q (Appellant) (Respondent) Assessee by : Shri Farooq Irani Department by : Shri Mahita Nair Date of Hearing : 29.07.2022 Date of Pronouncement : 03.08.2022 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through this Miscellaneous Application, revenue is seeking for recall of the order passed by the Tribunal in ITA.No. 7458/Mum/2018 dated 04.01.2021. 2 MA.No. 285/MUM/2021 M/s. BNP Paribas 2. Revenue has filed following submissions in its Miscellaneous Application: - “The present Miscellaneous Application is being filed on perusal of the decision of the Hon'ble Tribunal "I" Bench, dated 04/01/2021 in ITA No.7458/Mum/2018 filed by the assessee for the A.Y. 2014-15. The appeal is filed by the assessee against the order of the assessing officer under section 143(3) r.w.s 144C(13) of the Income tax Act, 1961 dated 30.10.2021 for A.Y 2014-15. The Hon'ble ITAT, in its order, has partly allowed the appeal of the Assessee. Ground no 2: Data processing fees paid by the branch office to the head office (amounting Rs. 40,78,10,733/-). The branch office of Assessee bank has paid Rs. 40,78,10,733/- as data processing fees to its Singapore branch. The assessee contented that the payment of data processing fees to the Singapore branch constitutes transaction between branches of the same legal entity and therefore, is in the nature of payment to self and hence is not taxable in India in the hands of the head office. The Assessing Officer rejected the claim of mutuality and held that the payment of data processing fees is taxable as fees for technical services as well as royalties. Aggrieved the assessee filed an appeal before DRP and DRP has dismissed the appeal of the asseessee and directed the AO to pass the order. The AO has passed the order incorporating direction of DRP. Aggrieved the assessee filed an appeal before ITAT. Decision of Hon'ble ITAT on Ground No. 2: Hon'ble ITAT in its order dated 04.01.2021 has allowed this ground in favour of assessee relying on its own decision of ITAT for AY. 2012-13 wherein reliance was placed on the order of ITAT for AY. 2002-03. Also ITAT has relied on the order of the special bench of the ITAT, Mumbai in the case of Sumitomo Mitsui Banking Corporation Vs DDIT(2012)163 ITD66 (Mum) wherein the issue involved was payment of interest by the Branch office to the head office. In this regard it is noted that the departmental representative (Ld. DR) has submitted certain arguments in his written submissions dated 11 Nov. 2020 to Hon'ble ITAT, duly noting that the Hon'ble ITAT has decided identical grounds in the assessee's own case for AY. 2012-13 and also submitted certain arguments relying on certain contrary judgements that were not discussed in the Hon'ble ITAT's aforementioned decision. Ld DR in his submission tried to distinguish the decision of Sumitomo Mitsui Banking Corporation Vs DDIT(2012)163 ITD66 (Mum) as the decision of Sumitomo 3 MA.No. 285/MUM/2021 M/s. BNP Paribas considered the Indo Japan DTAA while in the present case, Indo France DTAA needs to be considered. However, in the impugned order of the Hon'ble ITAT, these arguments of Ld. DR have not been taken into consideration. Hon ble ITAT in its order noted the argument of Ld DR in para 13 of pg 5 as under: 13. Per contra, the Ld DR relied on the orders of the lower authorities. However the Ld. DR had not only relied on orders of lower authorities. Rather he had after explicitly mentioned the decision of ITAT for AY. 2012-13 and argued on merits against said order Therefore there is mistake apparent from the record in the Hon'ble ITAT's order wherein it has not discussed the oral and written submissions of Ld. DR and has erroneously stated that the Ld. DR only supported the orders of the authorities below. Ground no 4: Interest paid by branch office to Head office (amounting Rs. 8,22,02,991/-). The Assessee has paid interest to the head office of Rs. 8,22,02,991/-. The issue involved was whether or not the interest payble/paid by the Indian Branch to the head office or the other overseas branches would be chargeable to tax or not. The assessee has contended that the transaction to be treated as payment to self. The AO after elaborate discussion in the Assessment Order rejected the claim of mutuality and held that the interest paid by the assessee to the head office and others amounting to RS. 8,22,02,991/- is taxable in India applying the source rule and taxed the amount at the rate of 10% under article 12 of India France DTAA. Being aggrieved the assessee filed an appeal before DRP. The DRP affirmed the order of Assessing Officer and held that the branch office is not entitled to deduction of interest paid to head office and other while computing the income of the Permanent Establishment (PE). However, this issue was not raised before the Hon'ble ITAT. The AO has passed the order incorporating the direction of DRP. Aggrieved, the assessee went into appeal before ITAT. Decision of Hon'ble ITAT: Hon'ble ITAT has allowed this ground in favour of assessee relying on its own decision of ITAT for AY. 2012-13 wherein reliance was placed on the order of ITAT for AY. 2002-03, wherein the issue was "interest paid by the Indian branches of the Assessee bank and other overseas branch to the head office of other branch office." Also ITAT has relied on the order of the special bench of the ITAT, Mumbai in the case of Sumitomo Mitsui Banking Corporation Vs DDIT(2012)163 ITD66 (Mum). 4 MA.No. 285/MUM/2021 M/s. BNP Paribas In this regard it is noted that the departmental representative (Ld. DR) has submitted certain arguments in his written submissions dated 11 Nov. 2020 to Hon'ble ITAT, duly noting that the Hon'ble ITAT has decided identical grounds in the Assessee's own case for AY. 2012-13 and also submitted certain arguments relying on certain contrary judgements that were not discussed in the Hon'ble ITAT's aforementioned decision. Ld DR in his submission emphasised on the clear direction of DRP that two issues of income and allowability of expenses are linked. However, in the impugned order of the Hon'ble ITAT, these arguments of Ld. DR have not been taken into consideration. In para no. 18 page 9 of ITAT's order, the ITAT mentioned the argument of Ld. DR as below 18. ............. Per contra, the Ld. DR relied on the orders of the lower authorities. However the Ld. DR had not only relied on orders of lower authorities. Rather he had after explicitly mentioned the decision of ITAT for AY. 2012-13 and argued on merits against said order. Therefore there is mistake apparent from the record in the Hon'ble ITAT's order wherein it has not discussed the oral and written submissions of Ld. DR and has erroneously stated that the Ld. DR only supported the orders of the authorities below. In view of the above, it is humbly prayed that the Hon'ble ITAT, Mumbai "I" Bench, may recall its order dated 04.01.2021 in I.T.A No. 7458/Mum/2018 for A.Y. 2014-15 in view of the apparent mistakes and consider matter afresh, as there was mistake apparent from record in its order. It is also prayed that out of turn hearing may kindly be granted in the aforesaid appeal. An application to condone the delay in filing this MA is also being submitted.” 3. Against the revenue’s submissions, assessee has filed rebuttal as under: - “1. At the very outset, the Assessee respectfully submits that the above Misc. Application ("M.A.") should be dismissed in limine as it seeks a recall of the Appellate Order of the Hon'ble ITAT dated 4th January 2021, and for a fresh consideration of the Appeal. The Assessee respectfully submits that it is now well settled that the provisions of Section 254(2) of the Income Tax Act, 1961 ("the Act") 5 MA.No. 285/MUM/2021 M/s. BNP Paribas cannot be invoked to recall an Appellate Order and seek a fresh consideration of the Appeal. The Assessee respectfully submits that on this ground alone, the Department's M.A. deserves to be dismissed. 2. Strictly without prejudice to what is stated above, the Assessee respectfully submits that the above M.A. in any event deserves to be dismissed as there is no error whatsoever, and certainly not an apparent error, in the above Appellate Order of the ITAT, inter alia, because of the following: (i) At the hearing of the above Appeal, a detailed chart had been filed by the Assessee showing how Grounds No. 2 and 4 were completely covered in favour of the Assessee by several orders of the ITAT, and of the High Court, in the Assessee's own case. This chart was supported by a Paper Book which contained all such Orders of the ITAT and of the High Court. For the sake of convenience, a copy of this chart is annexed hereto as "A". In view of the above consistent favourable orders of the ITAT High Court in the Assessee's own case, which were admittedly before the ITAT at the hearing of the Appeal, there can be no question of any error, leave alone any apparent error, in the above Appellate Order of the ITAT. To the best of the Assessee's knowledge, the above orders of the High Court have become final. (ii) Strictly without prejudice to the general submission. made in (i) above, the Assessee submits that there is no error whatsoever, leave alone any apparent error, in its decision on the undermentioned specific Grounds of Appeal: (A) Re: Ground No.2 (Taxability of Data Processing Fees) (a) In deciding this Ground in favour of the Assessee, the Hon'ble ITAT followed the following favourable orders, on the very same issue, in the Assessee's own case:  The favourable orders of the ITAT in the Assessee's own case for the earlier 8 years i.e. Assessment Years 2005-06 to 2010-11, 2012-13 and 2013-14;  The favourable orders of the Hon'ble Jurisdictional High Court in the Assessee's own case, for Assessment Years 2006-07 to 2009-10 (which to the 6 MA.No. 285/MUM/2021 M/s. BNP Paribas best of the Assessee's knowledge have become final); The Assessee respectfully submits that there can be no question of any error whatsoever, leave alone any apparent error, to correct a decision of the Hon'ble ITAT which follows a decision of the Hon'ble Jurisdictional High Court in the Assessee's own case. It is unfortunate that no reference whatsoever has been made by the Department in its above M.A. to the above favourable orders of the Bombay High Court in the Assessee's own case. (b) Without prejudice to the above, the Assessee submits that the allegation of the Department that the oral and written submissions of the Departmental Representative ("the D.R.") were not discussed is erroneous, inter alia, as the Hon'ble ITAT has specifically observed thus: "We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements that have been pressed into service by them to drive home their contentions in the context of the aforesaid respective issues raised before us. ................. "We have deliberated at length on the contentions advanced by the authorized representatives of both the parties in the backdrop of the orders of the lower authorities and have also perused the material available on record". (c) It is further submitted that each and every one of the oral and written submissions of the D.R. on this ground, were comprehensively rebutted in writing by the Assessee by its written rebuttal which, for the sake of convenience, is annexed hereto as "B". In view of the above, it is respectfully submitted that there is no mistake whatsoever, leave alone any apparent mistake, in the decision of the Hon'ble ITAT on the Assessee's Ground of Appeal No.2. (B) Re: Ground of Appeal No.4 (Taxability of interest payable / paid by the Indian Branch Offices of the Assessee to the Head Office (a) In deciding this Ground in favour of the Assessee, the Hon'ble ITAT followed the favourable decisions of the Hon'ble ITAT, on the same issue, in the Assessee's own case, as also the decision of the 7 MA.No. 285/MUM/2021 M/s. BNP Paribas Special Bench of the ITAT in the case of Sumitomo Mitsui Banking Corporation. In view of the above, it is respectfully submitted that there is no error whatsoever, leave alone any apparent error, in the above decision of the ITAT, allowing the Assessee's Ground of Appeal No.4. (b) Without prejudice to the above, the Assessee submits that the allegation of the Department that the oral and written submissions of the Departmental Representative ("the D.R.") were not discussed is erroneous, inter alia, as the Hon'ble ITAT has observed thus: "We have given a thoughtful consideration to the contentions advanced by the authorized representatives of both the parties in the context of the aforesaid issue under consideration." (c) It is further submitted that each and every one of the oral and written submissions of the D.R. on this ground, were comprehensively rebutted in writing by the Assessee by its written rebuttal which, for the sake of convenience, has already been annexed hereto as "B" above. In view of the above, it is respectfully submitted that there is no mistake whatsoever, leave alone any apparent mistake, in the decision of the Hon'ble ITAT on the Assessee's Ground of Appeal No.4. 3. In view of what is stated above, it is respectfully submitted that the above M.A. is not maintainable, apart from being completely erroneous, and deserves to be dismissed.” 4. Ld. AR in support of the above propositions, he relied on the following case laws: - (i). CIT v. ramesh Electric & Trading Co., [1994] 77 taxman 43 (Bom.) (ii). Vaibhavi Trading (P.) Ltd., v. DCIT [2018] 89 taxmann.com 132 (Mumbai-Tribunal)] 5. In the rejoinder, Ld. DR submitted that the following submissions were submitted by the then DR in the main appeal: - 8 MA.No. 285/MUM/2021 M/s. BNP Paribas “3.1. The assessee has contended that this issue is covered in its own case by the orders of the ITAT in earlier years. 3.2. It is humbly submitted that there is distinction this year as the DRP has considered the issue in entirety and the operative part is in Para 8 of the order of DRP dated 4.9.2018. The DRP has identified two aspects. Firstly whether amount paid to the HO/Overseas Branches is allowable as deduction and second whether the amount represented an income of HO and the assessee was liable to deduct TDS u/s 195 of the Act. The decision of the Kolkata High Court in the case of ABN Amro bank was noted as not addressing the issue whether such payment can be claimed as deduction in computation of profits of the PE. The DRP further noted that the decision of the Special Bench of ITAT in the case of Sumitomo Mitsui Banking Corporation, heavily relied upon by the assessee, had held that interest payment by a Branch to HO is not an allowable deduction as per the Indian Income Tax Act but proceeded to conclude that such deduction will be allowable under Article 7(3) of The India Japan Tax Treaty. The DRP noted that the Article dealing with the computation of income of the PE in the India France Treaty was different than the India Japan Treaty. The India France Treaty explicitly stipulates that the deductions claimed are subject to the limitations of the taxation laws of the Contracting State in which the PE is located. This distinction was noted and accepted by the Hon'ble ITAT Delhi Bench in the case of Standard Chartered Grindlays Pty Ltd. ITA 3578/Del/2013, a decision referred to by DRP. In Para 8.5 the DRP held that the payment of interest by the Branches to HO is not eligible for deduction. 3.3. The assessing officer while giving effect to the directions of the DRP in the final assessment order has quoted the directions and thereafter in Para 8.15. of the assessment order held that "8.15. So accordingly, assessee's claim of deduction of the interest paid by the Branch Office to the HO amounting to Rs 8,22,02,991/- has been disallowed." Thus this is different issue which was not part of the decisions of the Hon'ble ITAT in the earlier years. 3.4. The decision of the Hon'ble ITAT in the assessee's case for earlier assessment years is based on the Special Bench decision in the case of Sumitomo Mitsui Banking Corporation. In Para 50 of the SB order it is stated that "As regards the deduction of interest payable to the head office in the hands of Indian PE for the of computing profits attributable to the said PE, there is no dispute that such 9 MA.No. 285/MUM/2021 M/s. BNP Paribas deduction is not permissible under the Indian Income-tax Act (domestic law) being the payment made to self Both the Indian PE and the foreign GE of which it is a part are not separate entities for the purpose of taxation under the domestic law and the same being one and the same entity recognized as one assessee under the domestic law, interest payable by Indian PE to foreign GE of which it is a part, cannot be treated as expenditure allowable as deduction being payment to self. This position which is well settled under the domestic law has not been disputed even by the learned representatives of the assessees during the course of hearing before us." Thereafter the Hon'ble Special Bench however held that such interest expenses is allowable to the Branch PE as per Article 7(2) and 7(3) of the India Japan Treaty. "88. Keeping in view all the facts of the case and the legal position emanating from the interpretation of the relevant provisions of domestic law as well as that of the treaty as discussed above, we are of the view that although interest paid to the head office of the assessee bank by its Indian branch which constitutes its PE in India is not deductible as expenditure under the domestic law being payment to self, the same is deductible while determining the profit attributable to the PE which is taxable in India as per the provisions of article 7(2) & 7(3) of the Indo- Japanese treaty read with paragraph 8 of the protocol which are more beneficial to the assessee.” 3.5. As noted by DRP and brought to your kind attention in the course of hearing today, the India France Tax Treaty is different. It is well recognized that interpretation has to be based on the explicit terms of the relevant treaty and a decision based on the terms of one treaty cannot be automatically applied while interpreting another treaty when the terms and scope are different. The relevant clause of the India France Tax Treaty is as follows; "Article 7 Business Profits 3. (a) in determining the profits of a permanent establishment, there shall be allowed as deduction expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Contracting State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of and subject to the limitations of the taxation laws of that 10 MA.No. 285/MUM/2021 M/s. BNP Paribas Contracting State. Provided that where the law of the Contracting State in which the permanent establishment is situated imposes a restriction on the amount of the executive and general administrative expenses which may be allowed, and that restriction is relaxed or overridden by any Convention, Agreement or Protocol signed after 1-1- 1990 between that Contracting State and a third State which is a member of the OECD, the competent authority of that Contracting State shall notify the competent authority of the other Contracting State of the terms of the corresponding paragraph in the Convention, Agreement or Protocol with that third State immediately after the entry into force of that Convention, Agreement or Protocol and, if the competent authority of the other Contracting State so requests, the provisions of that paragraph shall apply under this Convention from that entry into force." 3.6. In the case of Standard Chartered Grindlays Pty Ltd., the decision in the case of BNP Paribas was also quoted (Para 6(t)). The treaty involved in this case was India UK Tax Treaty. However the issue was identical to that in the present case in as much as in the India UK treaty also the limitation of domestic legislation of the contracting state was involved. The operative part of the decision of the ITAT is in Para 8. The distinction between India Japan Treaty and India UK treaty was noted. "8.2 Having gone through the relevant Articles of both the treaties i.e. Indo-UK DTAA and Indo Japan Tax Treaty, we concur with the difference pointed out by the ld. CIT (Appeals) between the two treaties. The difference pointed out by the Id. CIT (Appeals) between the two is that as per Article 7(3) of Indo Japan DTAA, deduction of expenses is allowable and there is no stipulation, as appearing in Indo- UK DTAA that these deductions shall be subject to limitation of domestic tax law. As a result, limitation under domestic tax law of tax deductibility of interest paid by branch office to head office shall not apply, where Indo Japan DTAA is applicable. Thus the Situation in the present appeal is that interest paid by PE to HO is neither tax deductible under I.T. Act nor is it so under Article 7(5) read with Article 7(7) of DTAA. These findings are based on Article 7(5), and 7(7) of the Indo-UK DTAA and Article 7(3) of the Indo Japan Tax Treaty." "8.3. .......... We are also fully agreeable with the finding of the authorities below that the decision in the case of ABN Amro 11 MA.No. 285/MUM/2021 M/s. BNP Paribas Bank N.V. (supra) relied upon by the ld. AR having different issue is not applicable in the present case as in that case issue was as to whether interest paid by branch to its head office is subject to TDS and hence, not allowable as deduction under section 40(a)(i) read with section 195 of the Act, which is otherwise tax deductible, whereas in the present case the issue involved is as to whether interest paid by the branch office to HO is tax deductible per se or not The first appellate order in this regard is thus upheld. Ground Nos. 4 and 5 are thus rejected." 3.7. The ground raised by the assessee in the case here is restricted to taxability of the Interest amount as Income under Article 12. The DRP has clearly held that the two issues of income and allowability of expenses are linked and has dealt with it accordingly. As understood from the submissions of the Ld AR, it has not challenged or disputed the explicit directions/decision of the DRP stating that it is not forming part of the assessment order. This is incorrect as can be seen from the quotation of the directions of the DRP in the assessment order and Para 8.15 of the assessment order. The computation of income could not make double addition by first adding the amount as income and also adding the interest deduction disallowed on the same issue. 3.8. It is therefore humbly submitted that the directions of the DRP and disallowance made by the assessing officer, not being appealed against by the assessee, be affirmed and recorded. If the assessee objects to this submission, the same may be rejected on merits for the reasons narrated above. 4. Ground of appeal no 2 This ground of appeal is as follows: "The Ld AO has erred in subjecting to tax, the data processing fees paid by Indian Branch offices of the Appellant to its Singapore branch, as income of the Appellant to the tune of Rs 40,78,10,733/- 4.1. The assessee has contended that this issue is covered in its own case by the orders of the ITAT in earlier years and that the appeals of the revenue have been dismissed by the Hon'ble High Court. 4.2. Before the assessing officer the assessee contended that this is payment to itself and therefore not taxable relying on the decision of the Hon'ble Special Bench in the case of Sumitomo Mitsui (supra). Further without prejudice, there was no technology made available and therefore the services received do not qualify as Fees for 12 MA.No. 285/MUM/2021 M/s. BNP Paribas Technical Services. (Refer Para 7.1. of the assessment order). The assessing officer referred to the Para 89 of the decision of the SB in the case of Sumitomo which refers to net amount being allowable in respect of payments to and received from HO. Further that the original Treaty with France was entered into in 1994 but Protocol was thereafter amended in 2010. Even though "make available concept was there in some other tax treaties entered into by India subsequent to 1994, while amending the protocol of treaty with France this was not incorporated which clearly show that 'make available' was not a requirement in interpreting FTS as far as this Treaty with France was concerned. 4.3. The Ld AR submitted that payments of the nature of Royalty and FTS are admissible as expenses as per the Treaty. The relevant clause of India France Treaty referred to by Ld AR is as follows. "Article 7 Business Profits 3.(a) (Reproduced earlier) (b) However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual Expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices." 4.4. In the earlier assessment years, the Hon'ble ITAT held that the payments received by the Singapore Branch of the BNP Paribas cannot be taxed as it is a payment to itself relying on the decision of SB in case of Sumitomo (supra). 4.5. The issue still remains as to whether such amounts can be claimed as expenses in determining the profits of the Indian Branch 13 MA.No. 285/MUM/2021 M/s. BNP Paribas (PE). In AY 2006-07, the Hon'ble ITAT also held that the payments are in the nature of reimbursement. The claim and the nature of such expenses were not raised before the AO nor were examined by any of the authorities below. In the present case also such claim is not made nor examined by authorities below nor submitted before the Hon'ble ITAT. It is humbly submitted that if the HO/ foreign Branch at Singapore has made any payments to third parties, only then the same can be considered as reimbursement for Article 7 (3)(b). However, if such payments are for services provided by the Singapore Branch itself, such payments will fall within the purview of payment to itself, which is not allowable as expense under the domestic tax laws. This issue is identical to what has been highlighted in respect of claim of interest expenses by the PE, in this submission earlier. The Hon'ble ITAT has the powers to examine the issue that is before it and pass orders "as it thinks fit". Refer 66 ITR 710(SC), 53 ITR 225 (SC). 4.6. It is therefore humbly submitted it be held that data processing charges be held as not an allowable expense in determining the profits of the PE/ branch of assessee in India. 4.7. If in the opinion of the Hon'ble Bench, filing of Cross Objection is necessary in respect of data processing charges, I crave your honour's indulgence to permit filing the same.” 6. Considered the rival submissions and material placed on record, we observe that revenue has filed this Miscellaneous Application with the objection that ITAT while adjudicating the issues involving Ground No. 2 and 4 has not considered the written submissions made by the Ld.DR at the time of hearing and in the submissions of the Ld.DR, has made this submissions relying on decision of ITAT in the earlier assessment year and also some other decisions relating to the issues under consideration. 7. We have considered the submissions of the Ld.DR and we also gone through the bench observation in Para No. 12, 14 and 19 and the bench 14 MA.No. 285/MUM/2021 M/s. BNP Paribas has decided the issue mainly by following the Hon'ble Bombay High Court decision in assessee’s own case in A.Y. 2006-07 to A.Y. 2009-10. Therefore, these issues are technically settled in favour of the assessee and further, the bench has observed that they have deliberated at length on the contentions advanced by both the parties and decided to follow the Hon'ble High Court decision and not elaborately discussed the issues submitted by the Ld.DR. Therefore, as held in the case of CIT v. Ramesh Electric & Trading Co. (supra), the Hon'ble Bombay High Court held as under: - “The power of rectification under section 254(2) can be exercised only where the mistake is apparent from the record, and not a mistake which is required to be established by arguments and a long- drawn process of reasoning on points on which there might conceivably be two opinions. Failure by the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may have been an error of judgment. In the instant case, the alleged failure, at least on one count, was attributed by the assessee to the ITO and not the Tribunal Therefore, the Tribunal had no jurisdiction under section 254(2) to pass the second order.” 8. From the above decision, it is very clear that failure by the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may have been an error of judgment. Respectfully following the above said decision, in the given case bench has not brought on record the argument of the Ld.DR. However, considered the finding of the Hon'ble Bombay High 15 MA.No. 285/MUM/2021 M/s. BNP Paribas Court in assessee’s own case which is more eminent for reaching the decision than any other argument put forth by both counsels. Therefore, there is no mistake apparent on record and we are not inclined to entertain the submissions of the Ld.DR. Accordingly, this Miscellaneous Application filed by the revenue is accordingly dismissed. 9. In the result, Miscellaneous Application filed by the revenue is dismissed. Order pronounced in the open court on 03 rd August, 2022. Sd/- Sd/- (PAVAN KUMAR GADALE) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 03/08/2022 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum