Joint Commissioner of Income Tax, Special Range-3, Bangalore V. M/s Flipkart India Pvt Ltd , Bangalore

MA 337/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7808 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 17-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CH. SUNDAR RAO
• Keywords: Capital asset; Depreciation; Rectification of order; Capital expenditure
• Section: 254(2); 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER M.P. NO. 337/BANG/2018 (IN ITA NO.202/BANG/2018) (AY. 2015-16) (APPEAL BY ASSESSEE) & (ITA NO. 693/BANG/2018) (AY. 2015-16) (APPEAL BY REVENUE) JOINT COMMISSIONER OF INCOME-TAX, SPECIAL RANGE-3, BANGALORE ..REVENUE / PETITIONER VS. M/S. FLIPKART INDIA PRIVATE LIMITED, ESSAE VAISHNAVI SUMMIT, NO.6/B, 7 TH MAIN, 80 FEET ROAD, 3 RD BLOCK, KORAMANGALA INDUSTRIAL LAYOUT, BANGALORE 560034, [PAN: AABCF8078M] ..ASSESSEE / RESPONDENT APPELLANT BY : SHRI CH. SUNDAR RAO, CIT RESPONDENT BY : SHRI PERCY PARDIWALA, SR. ADVOCATE DATE OF HEARING : 12-04-2019 DATE OF PRONOUNCEMENT : 24-04-2019 O R D E R PER N.V.VASUDEVAN, VICE-PRESIDENT: THIS IS A MISCELLANEOUS APPLICATION (M.A.) FILED BY THE ASSESSEE U/S.254(2) OF THE INCOME TAX ACT, 1961 (AC T) PRAYING FOR AN : 2 : M.P. NO. 337/BANG/2018 ORDER RECALLING ITS ORDER DATED 25.04.2018 AND RECT IFYING ORDER ADJUDICATING THE GRIEVANCE PROJECTED BY THE REVENUE IN THIS MISCELLANEOUS PETITION. 2. THE ASSESSEE IS A COMPANY. DURING THE RELEVANT PREVIOUS YEAR IT WAS ENGAGED IN THE BUSINESS OF WHOLESALE TRADER/DIS TRIBUTOR OF BOOKS, MOBILES, COMPUTERS AND RELATED ACCESSORIES. IT FIL ED A RETURN OF INCOME FOR AY 2015-16 DECLARING LOSS OF RS.796,34,36,863/- . 3. THE AO NOTICED THAT THE ASSESSEE WAS A WHOLESALE DEALER AND ACQUIRED GOODS FROM VARIOUS PERSONS AND WAS IMMEDIA TELY SELLING THE GOODS TO RETAIL SELLERS LIKE M/S.WS RETAIL SERVICES PVT.LTD. AND OTHERS, WHO SUBSEQUENTLY WOULD SELL THOSE GOODS AS SELLERS ON INTERNET PLATFORM UNDER THE NAME FLIPKART.COM. THE AO FUR THER NOTICED THAT THE ASSESSEE HAS BEEN PURCHASING GOODS AT SAY RS.10 0/- AND SELLING THEM TO THE RETAILERS AT RS.80/-. THE PURCHASES DU RING THE RELEVANT PREVIOUS YEAR WAS RS.10335,73,05,882/- AND SALES WA S RS.9351,75,05,319/-. AFTER EXCLUDING CLOSING STOCK OF UNSOLD GOODS, THE PURCHASE AND SALES FIGURE WERE AS FOLLOWS: PURCHASES RS.10335,73,05,882 LESS: STOCK UNSOLD RS. 741,83,06,836 RS. 9593,89,99,046 LESS: SALE VALUE RS. 9351,75,05,319 GROSS LOSS RS. 242,14,93,727 : 3 : M.P. NO. 337/BANG/2018 4. THE LOSS IN TERMS OF PERCENTAGE WAS 2.52% OF THE COST OF PURCHASE VALUE. THE AO WAS OF THE VIEW THAT THE AC TION OF THE ASSESSEE IN SELLING GOODS AT LESS THAN COST PRICE W AS NOT A NORMAL BUSINESS PRACTICE. IN THE ORDER OF ASSESSMENT, THE AO CONCLUDED THAT THE ASSESSEE FOLLOWED PREDATORY PRICING IN ORDER TO CREATE MARKETING INTANGIBLES AND BRAND. ACCORDING TO HIM THE ENHANCE D VALUATIONS AT WHICH VENTURE CAPITALISTS INVEST IN THE ASSESSEE IS BASED ON INTANGIBLES GENERATED BY ASSESSEE. HENCE, SELLING AT A PRICE B ELOW PRICES IS NOT AN IRRATIONAL ECONOMIC BEHAVIOUR. IT IS A CLEARLY THOU GHT STRATEGY TO ESTABLISH A MONOPOLY IN MARKET BY BRAND BUILDING BY GENERATING CONSUMER GOODWILL. THIS STRATEGY NATURALLY LEADS T O GENERATION OF INTANGIBLE ASSETS AND ENDURING BENEFIT. HAVING COM E TO A CONCLUSION THAT THE ASSESSEE CREATED INTANGIBLE ASSETS, THE AO THEREAFTER EMBARKED UPON METHOD OF VALUATION OF INTANGIBLES. FOR THE AB OVE PURPOSE THERE WAS A NEED TO FIND OUT AVERAGE GROSS MARGIN ON COST FOR OTHER WHOLESALERS IN THE MARKET. THE AO TOOK THE DATABAS E FOR WHOLESALERS DEALING IN CONSUMER AND ELECTRONIC GOODS. THE SEARC H PROCESS YIELDED AN AVERAGE GROSS PROFIT MARGIN OF 16.95%. THIS WAS COMPARED WITH ASSESSEES PROFIT MARGIN OF (-2.52%). THE AO THERE AFTER ARRIVED AT THE VALUE OF INTANGIBLE ON THE BASIS THAT HAD THE ASSES SEE NOT FOLLOWED A PREDATORY OF RS.9593,89,99,046) I.E. RS. 11220,06,5 9,384. ASSESSEES REAL SALES WAS RS. 9351,75,053 THE REDUCTION IN SAL ES DUE TO FOLLOWING ASSESSEE'S STRATEGY OF SELLING AT A PRICE LOWER THA N COST, THE DIFFERENCE OF RS. 1868,31,54,065 BETWEEN THE PRICE AT WHICH TH E ASSESSEE IS SELLING AND THE PRICE THE NORMAL WHOLESALER WOULD H AVE SOLD IS THE : 4 : M.P. NO. 337/BANG/2018 VALUE OF EXPENSES INCURRED BY ASSESSEE TOWARDS COST OF MARKETING INTANGIBLES IN THE YEAR. ACCORDINGLY A SUM OF RS.1 868,31,54,065/- WAS TREATED AS EXPENDITURE INCURRED BY THE ASSESSEE FOR CREATING INTANGIBLES AND IT WAS FURTHER HELD THAT THE EXPENDITURE SO INC URRED WAS CAPITAL EXPENDITURE AND HAD TO BE DISALLOWED AND ADDED TO T HE TOTAL INCOME. THE AO HOWEVER TREATED THE VALUE OF EXPENDITURE FOR CREATING INTANGIBLES AS CAPITAL ASSET AND ALLOWED DEPRECIATI ON AT 25%. DEPRECIATION ON INTANGIBLES IS ALLOWED 25 % OF RS. 1868,31,54,065/- WHICH IS A SUM OF RS.467,07,88,516/-. THE DIFFEREN CE BETWEEN RS. 1868,31,54,065 - RS. 467,07,88,516) RS. 1401,23,65, 549 WAS PROPOSED TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER A SIMILAR CAPITALIZATION WAS MADE IN A.Y 2012-13, A.Y 2013 -1 4 AND AY 20 1415 AND IT WAS HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEPRECIATION ON THESE CAPITAL ASSET IN THOSE AYS ALSO AND ACCORDINGLY BY A PROCESS OF REVERSE WORKING THE SUM TO BE DISALLOWED WAS WORKED OUT BY THE AO AS FOLLOWS: A.Y:2012-13 - RS. 8,18,81,560 A.Y:2013-L4 - RS. 45,14,69,521 A.Y:2014-15 - RS. 143,22,15,931 AFTER ALLOWING THE ABOVE DEDUCTION FOR AN 2012-13, 2013-14 AND 2014-15 THE ADDITION TO BE MADE WAS WORKED OUT AS U NDER: : 5 : M.P. NO. 337/BANG/2018 A SUM OF RS.1204,67,98,537/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL BY THE ASSESSEE, THE CIT(A) NO T ONLY CONFIRMED THE ACTION OF THE AO BUT IN EXERCISE OF HIS POWERS OF ENHANCEMENT HELD THAT THE ASSESSEE WAS NOT ENTITLED TO DEPRECIATION ON THE CAPITALIZED VALUE OF INTANGIBLE. 5. ON APPEAL BY THE ASSESSEE, THIS TRIBUNAL HELD TH AT THE STARTING POINT FOR COMPUTING INCOME FROM BUSINESS IS THE PRO FIT OR LOSS AS PER THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE, WHICH CANNOT BE DISREGARDED UNLESS CERTAIN PROVISIONS (SECTION 145( 3)) OF THE IT ACT ARE INVOKED. SINCE THE AO HAS NOT INVOKED SUCH PROVISIO NS, THE AO IS NOT EMPOWERED TO GO BEYOND THE BOOK RESULTS. IT WAS HEL D THAT IT IS SETTLED LAW THAT WHERE A TRADER TRANSFERS HIS GOODS TO ANO THER TRADER AT A PRICE LESS THAN THE MARKET PRICE AND THE TRANSACTION IS A BONAFIDE ONE, THE TAXING AUTHORITY CANNOT TAKE INTO ACCOUNT THE MARKE T PRICE OF THOSE GOODS, IGNORING THE REAL PRICE FETCHED TO ASCERTAIN THE PROFIT FROM THE TRANSACTION AND INCOME WHICH HAS ACCRUED OR ARISE N CAN ONLY BE SUBJECT MATTER OF TOTAL INCOME AND NOT INCOME WHICH COULD HAVE BEEN EARNED BUT NOT EARNED. IT WAS HELD THAT THE AO W AS NOT RIGHT IN : 6 : M.P. NO. 337/BANG/2018 PROCEEDING TO IGNORE THE BOOKS RESULTS OF THE ASSES SEE AND RESORTING TO A PROCESS OF ESTIMATING TOTAL INCOME OF THE ASSESSE E IN THE MANNER IN WHICH HE DID, WHAT CAN BE TAXED IS ONLY INCOME THAT ACCRUES OR ARISES AS LAID DOWN IN SEC.5 OF THE ACT. NOTHING BEYOND SE C.5 OF THE ACT CAN BE BROUGHT TO TAX. IT WAS HELD THAT THERE IS NO PR OVISION TO DISREGARD THE LOSS DECLARED BY THE ASSESSEE AND ALSO THERE IS NO PROVISION BY WHICH THE REVENUE CAN IGNORE THE SALE PRICE DECLARE D BY AN ASSESSEE AND PROCEED TO ENHANCE THE SALE PRICE WITHOUT ANY M ATERIAL BEFORE HIM TO SHOW THAT THE ASSESSEE HAS IN FACT REALIZED HIGH ER SALE PRICE. IN FACT, WHENEVER, THE LEGISLATURE INTENDED TO TAX INCOME NO T EARNED, THEY HAVE MADE A PROVISION TO THIS EFFECT. IT WAS HELD THAT T HERE WAS NO EXPENDITURE WHICH WAS INCURRED BY THE ASSESSEE AND ONE CANNOT PROCEED ON THE BASIS OF A PRESUMPTION THAT PROFIT F ORGONE IS EXPENDITURE INCURRED AND FURTHER THAT EXPENDITURE INCURRED WAS FOR ACQUIRING INTANGIBLE ASSETS LIKE BRAND, GOODWILL ETC. IT WAS ALSO HELD THE VALUATION OF INTANGIBLES IS ACADEMIC SINCE IT REJECTED THE BA SIC POSITION ADOPTED BY THE REVENUE AND HELD THAT THE ASSESSING OFFICER SHOULD ACCEPT THE LOSS DECLARED BY THE ASSESSEE. THE TRIBUNAL CONCLUD ED THAT THE ACTION OF THE REVENUE IN DISREGARDING THE BOOKS RESULTS CA NNOT BE SUSTAINED AND THE FURTHER CONCLUSION THAT THE ACTION OF THE R EVENUE IN PRESUMING THAT THE ASSESSEE HAD INCURRED EXPENDITURE FOR CREA TING INTANGIBLE ASSETS/BRAND OR GOODWILL IS WITHOUT ANY BASIS. ACCO RDINGLY, THE LOSS DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME SH OULD BE ACCEPTED BY THE AO AND THE ACTION OF DISALLOWING THE EXPENSES I N WITHOUT ANY BASIS. : 7 : M.P. NO. 337/BANG/2018 6. IN THIS MA THE FOLLOWING ARE THE AVERMENTS BY TH E REVENUE: 2. THE TAXPAYER FAILED TO INVITE THE ATTENTION OF H ON'BLE TRIBUNAL THAT THE GOODS WERE PURCHASED AND SOLD TO WS RETAIL PVT LTD (RETAIL ARM OF THE TAXPAYER) AT LESS THAN THE COST WITH A CONDITION TO SELL THE SAME ONLY THROUGH THE WEB PORTAL FLIPKART.COM. THIS WOULD AMOUNT TO C ONTROLLED TRANSACTION IN ORDER TO ATTRACT CUSTOMERS AND CREATE INTANGIBLE AS SET IN THE FORM OF GOODWILL/BRAND VALUE OF ITS WEB PORTAL FLIPKART.COM . 3. THE FACTUAL ASPECT THAT THE GOODS SUPPLIED BY TH E TAXPAYER TO WS RETAIL ARE SUPPLIED TO THE CUSTOMERS PLACING ORDERS IN THE FLIPKART WEB PORTAL AT THE PRICE COMMANDED BY THE TAXPAYER WAS NOT PLACED BEFORE THE HON'BLE ITAT BY THE TAXPAYER. HENCE THE LOSS INCURRED IN TH E FORM OF SUPPLY OF GOODS TO WS RETAIL AT LESS THAN THE COST OF PURCHAS E AND SALE OF THE SAME TO FLIPKART CUSTOMERS WAS ONLY WITH AN INTENTION OF AC QUIRING THE INTANGIBLE ASSET IN THE FORM OF GOODWILL/BRAND VALUE AND THE S AME WAS CORRECTLY HELD AS CAPITAL IN NATURE BY THE AO. THE FINDINGS OF THE HO N'BLE TRIBUNAL CONTRARY TO THE ABOVE WAS DUE TO SUPPRESSION OF MATERIAL FACT I N THE FORM OF AN AGREEMENT BY THE TAXPAYER. 4. THIS HON'BLE TRIBUNAL HAS RECORDED A FINDING THA T THE TRANSACTION BETWEEN TAXPAYER AND THE RETAILER, WS RETAIL WAS INDEPENDEN T TRANSACTION. HOWEVER THE SUPPLY AGREEMENT AND LICENSE AND SERVICE AGREEM ENT BETWEEN THE PARTIES PROHIBITS / CONTROLS THE WS RETAIL EITHER TO PURCHA SE / PROCURE GOODS FROM ANY PERSON OTHER THAN THE TAXPAYER AND ALSO TO SELL THE SAID GOODS OTHER THAN TO THE CUSTOMERS PLACING ORDERS IN THE FLIPKAR T PORTAL. ABOVE FACTUAL POSITION WAS NOT PLACED BEFORE THIS HON'BLE TRIBUNA L. THE ABOVE ASPECT WOULD LEAD TO ONLY ANALOGY THAT ENTIRE TRANSACTION IS AN COLORABLE DEVICE TO CLAIM THE COST OF INTANGIBLE ASSET AS BUSINESS LOSS . 5. THIS HON'BLE TRIBUNAL HAS ACCEPTED THE CASE OF T HE TAXPAYER THAT THERE IS NO ACQUISITION OF INTANGIBLE ASSET AS THE SAME IS N OT RECOGNIZED IN THE BOOKS OF ACCOUNTS. HOWEVER, THE LICENSE AND SERVICE AGREE MENT ENTERED INTO BY THE TAXPAYER WITH WS RETAIL HEAVILY EMPHASIZE ON TH E INTANGIBLE ASSETS IN THE FORM OF BRAND NAME, LICENSE OF TECHNOLOGY, DOMA IN NAME ETC. IT IS SUBMITTED THAT THE FACTUAL ASPECT OF THE TAXP AYER AND WS RETAIL HAVING AGREED TO PAYMENT OF CONSIDERATION UNDER THE LICENS E AND SERVICE AGREEMENT, THE QUANTUM OF PAYMENT HAS BEEN AGREED T O BE DETERMINED ON INTERVALS ON AN ANNUAL BASIS TO BE MUTUALLY AGREED ON A FUTURE DATE WAS NOT : 8 : M.P. NO. 337/BANG/2018 PLACED BY THE TAXPAYER BEFORE THIS HON'BLE TRIBUNAL . THE ABOVE AGREEMENTS WOULD CLEARLY DEMONSTRATE BEYOND DOUBT THAT WS RETA IL IS FULLY CONTROLLED BY THE TAXPAYER AND CREATING INTANGIBLE ASSETS UNDE R THE GUISE OF SUPPLYING THE GOODS TO WS RETAIL AT LESS THAN THE COST OF PUR CHASE. HENCE THE REDUCED PRICE IS NOTHING BUT THE COST OF THE INTANGIBLE ASS ETS AS THE SAME HAS BEEN RIGHTLY HELD AS CAPITAL BY THE AO. IT IS SUBMITTED THAT IF THE TRANSACTION BETWEEN THE TAXPAYER AND WS RETAIL IS SUPPLIER AND RETAILER SIMPLICITER, THE TAXPAYER WOU LD NOT HAVE IPRS IN THE PRODUCTS SUPPLIED TO WS RETAIL. EVEN IN THE COMMON BUSINESS PARLANCE THE SUPPLIER CANNOT CLAIM ANY IPRS IN THE PRODUCTS SUPP LIED. THE REFLECTION OF THE ABOVE CONDITION IN THE AGREEMENT AGREED BETWEEN THE TAXPAYER AND THE WS RETAIL WOULD INDICATE SOME HIDDEN TRANSACTION WH ICH REQUIRES TO BE EXAMINED BY THIS HON'BLE TRIBUNAL BY LIFTING THE CO RPORATE VEIL. THE SAID EXERCISE TO BE UNDERTAKEN BY THE HON'BLE TRIBUNAL A ND ALSO CONSIDERATIONS OF THE OTHER ASPECTS STATED IN THE PREVIOUS PARAGRAPHS COULD NOT BE REQUESTED OR ATTENTION OF THE HON'BLE TRIBUNAL BE INVITED IN VIEW OF THE SUPPRESSION OF THE ABOVE FACTS BY THE TAXPAYER AND ALSO LACK OF SU FFICIENT OPPORTUNITY TO THE REVENUE. 7. IN SHORT THE CONTENTION OF THE REVENUE IS THAT T HE ENTIRE CONCLUSION OF THE TRIBUNAL IS BASED ON THE FACT THA T M/S.WS RETAIL SERVICES PVT. LTD., TO WHOM THE PRODUCTS ARE SOLD B Y THE ASSESSEE AFTER ITS PURCHASE IS BASED ON THE FACT THAT THE TRANSACT ION BETWEEN THE ASSESSEE AND M/S.WS RETAIL SERVICES PVT.LTD. WAS AN UNCONTROLLED TRANSACTION WHEREAS THE FACT IS THAT THERE WAS AN A GREEMENT BETWEEN ASSESSEE AND M/S.WS RETAIL SERVICES PVT.LTD. AND TH E TERMS OF THE SAID AGREEMENT PROVIDE THAT M/S.WS RETAIL PVT.LTD., SHALL SELL THE PRODUCTS SOLD BY THE ASSESSEE TO IT ONLY THROUGH TH E WEB PORTAL FILPKART.COM. THEREFORE THE TRANSACTION BETWEEN A SSESSEE AND M/S.WS RETAIL SERVICES PVT.LTD., CANNOT BE SAID TO BE AN UNCONTROLLED TRANSACTION. THE FURTHER CONTENTION IS THAT THE AS SESSEE FAILED TO INVITE THE ATTENTION OF SUCH AGREEMENT BEFORE THE TRIBUNAL . THE FURTHER : 9 : M.P. NO. 337/BANG/2018 CONTENTION OF THE REVENUE IS THAT BECAUSE THE TRANS ACTION BETWEEN THE ASSESSEE AND M/S.WS SERVICES RETAIL WAS NOT IN THE NATURE OF UNCONTROLLED TRANSACTION, THE PROFITS FORGONE BY TH E ASSESSEE WAS ONLY WITH AN INTENTION OF ACQUIRING INTANGIBLE ASSET IN THE FORM OF GOODWILL/BRAND VALUE AND THE SAME WAS CORRECTLY HEL D TO BE CAPITAL EXPENDITURE BY THE REVENUE AUTHORITIES. THE FURTHER ALLEGATION IS THAT THERE WAS SUPPRESSION OF THE AFORESAID AGREEMENT WH ICH HAS INFLUENCED THE FINDINGS OF THE TRIBUNAL. THE FURTHER ALLEGATI ON IS THAT THERE WAS A SUPPLY AGREEMENT AND LICENSE AND SERVICE AGREEMENT BETWEEN PARTIES (WHICH PARTIES IS NOT SPELT OUT IN THE MA) WHICH PR OHIBITS/CONTROLS W/S.RETAIL SERVICES PVT.LTD., FROM EITHER PURCHASIN G OR PROCURING GOODS FROM ANY OTHER PERSON OTHER THAN THE ASSESSEE AND ALSO TO SELL THE GOODS OTHER THAN TO THE CUSTOMERS PLACING ORDER S IN THE FLIPKART PORTAL. THE FURTHER ALLEGATION IN THE MA IS THAT T HE ABOVE AGREEMENTS WERE NOT PLACED BY THE ASSESSEE BEFORE THE TRIBUNAL . 8. THE FURTHER AVERMENT IN THE M.A. IS THAT EXISTEN CE OF THE ABOVE AGREEMENTS, INDICATE SOME HIDDEN TRANSACTION, WHICH REQUIRES EXAMINATION BY THE TRIBUNAL BY LIFTING THE CORPORAT E VEIL. THE FURTHER ALLEGATION IN THE MA IS THAT THE REVENUE COULD NOT BRING THE ABOVE FACTS TO THE KNOWLEDGE OF THE TRIBUNAL AT THE TIME OF HEA RING OF APPEALS BECAUSE OF SUPPRESSION OF THE ABOVE FACTS BY THE AS SESSEE. THE ULTIMATE PRAYER IN THE MA IS THAT THE ORDER OF THE TRIBUNAL SHOULD BE RECALLED AND A RECTIFICATION ORDER PASSED ADJUDICAT ING THE ABOVE GROUNDS. : 10 : M.P. NO. 337/BANG/2018 9. THE LEARNED DR REITERATED THE STAND OF THE REVEN UE AS CONTAINED IN THE MA. HE FILED BEFORE US COPIES OF TWO AGREEM ENTS BOTH DATED 31.12.2011. THE FIRST AGREEMENT IS AN AGREEMENT BET WEEN THE ASSESSEE AND M/S.W.S.RETAIL SERVICES PRIVATE LIMITE D, WHICH IS DESCRIBED AS SUPPLY AGREEMENT AND THE SECOND AGRE EMENT BETWEEN THE SAME PARTIES DESCRIBED AS LICENSE AGREEMENT. HE ALSO FILED A COPY OF THE RETURN OF INCOME FILED FOR AY 2011-12 B Y M/S.W.S.RETAIL SERVICES PRIVATE LIMITED, WHEREIN THE SHAREHOLDING PATTERN OF M/S.W.S.RETAIL SERVICES PRIVATE LIMITED, IS GIVEN A ND THE SAME CONTAINS THE NAME OF SACHIN BANSAL AND BINNY BANSAL , WHO ARE ALSO PROMOTERS OF THE ASSESSEE. THE BENCH RAISED A QUER Y AS TO WHAT IS THE RELEVANCE OF THESE DOCUMENTS WHEN THEY WERE NOT THE BASIS OF ASSESSMENT BY THE AO OR THE CIT(A) NOR WAS IT THE C ASE OF THE REVENUE BEFORE THE TRIBUNAL THAT THE TRANSACTION BETWEEN TH E ASSESSEE AND W.S.RETAIL SERVICES PRIVATE LIMITED WAS A CONTROLLE D TRANSACTION. IT WAS ALSO POINTED OUT THAT A READING OF PARAGRAPH-2 AND PARAGRAPH 6 OF THE MA WOULD SHOW THAT THE AGREEMENTS AND DOCUMENT NOW SOUGHT TO BE FILED BEFORE THE TRIBUNAL WAS NEITHER THE BASIS OF ASSESSMENT BY THE AO OR THE CIT(A). THE ALLEGATION IN THE MA IS THAT THE ASSESSEE OUGHT TO HAVE POINTED OUT THE EXISTENCE OF THESE DOCUMENT S. IT WAS ALSO POINTED OUT THAT EVEN IN THE MA THERE IS NO INFEREN CE DRAWN THAT THESE DOCUMENTS WOULD SHOW THAT THE ORDER OF THE TRIBUNAL OR THE CONCLUSIONS REACHED THEREIN WERE ERRONEOUS. ON THE OTHER HAND, THE ALLEGATION IN THE MA IS THAT THERE IS A POSSIBILITY OF SOME HIDDEN : 11 : M.P. NO. 337/BANG/2018 TRANSACTION WHICH REQUIRES TO BE EXAMINED BY THE TR IBUNAL BY LIFTING THE CORPORATE VEIL. HOW AN MA COULD BE FILED ON TH E BASIS OF A POSSIBILITY OF SOME HIDDEN TRANSACTION EMANATING BY LIFTING THE CORPORATE VEIL. TO THESE QUERIES THE LEARNED DR COU LD NOT GIVEN ANY REPLY BUT REITERATED THE STAND OF THE REVENUE AS CO NTAINED IN THE MA. 10. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTH ER HAND POINTED OUT THAT THERE EXISTED NO BRAND OR INTELLECTUAL PRO PERTY (IPR) OWNED BY THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO A Y 2014-15 WHICH WAS THE AY WHICH WAS DECIDED BY THE TRIBUNAL. HE D REW ATTENTION TO THE FACT THAT THE ASSESSEE HAD ALREADY TRANSFERRED WHATEVER BRAND/IPR IT OWNED TO M/S.FLIPKART INTERNET PVT.LTD. AND THESE F ACTS WERE NOTICED BOTH BY THE CIT(A) AS WELL AS BY THE TRIBUNAL IN IT S ORDER VIDE PARAGRAPH-14 & 15 OF THE TRIBUNLS ORDER. HE SUBMI TTED THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL MUCH LESS A MISTAKE APPARENT ON THE FACE OF THE RECORD AND HENCE THE MA DESERVES TO BE DISMISSED. 11. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. AS WE HAVE ALREADY POINTED OUT THE LEARNED DR WAS U NABLE TO EXPLAIN THE RELEVANCE OF THE DOCUMENTS NOW SOUGHT TO BE FIL ED BEFORE US FOR DECIDING THE ISSUE THAT WAS FOR CONSIDERATION BEFOR E THE AO. AS WE HAVE ALREADY MENTIONED THESE DOCUMENTS WERE NEITHER THE BASIS OF ASSESSMENT OR THE BASIS OF CONCLUSIONS BY THE CIT(A ) FOR ITS CONCLUSIONS ON THE ADDITION THAT WAS IN CHALLENGE B EFORE THE TRIBUNAL. THESE DOCUMENTS WERE NEVER SOUGHT TO BE RELIED UPON BY THE LEARNED : 12 : M.P. NO. 337/BANG/2018 DR WHEN THE APPEAL WAS HEARD NOR WAS THERE ANY ALLE GATION OF ANY HIDDEN TRANSACTION REQUIRING EXAMINATION BY THE TRI BUNAL AFTER LIFTING THE CORPORATE VEIL. THESE DOCUMENTS COULD NOT HAVE BEEN RELIED UPON BY THE LEARNED DR WHEN THE APPEAL WAS ARGUED FOR TH E REASON THAT THESE DOCUMENTS WERE NOT THE BASIS ON WHICH THE ASSESSMEN T AND THE ADDITION CHALLENGED BEFORE THE TRIBUNAL WERE MADE BY THE AO AND CONFIRMED AND ENHANCED BY THE CIT(A). EVEN IN THE ALLEGATION IN THE MA IS THAT THE ASSESSEE HAS FAILED TO PLACE THE DOCUMENTS NOW SOUGHT TO BE FILED BEFORE TRIBUNAL BY THE REVENUE. THE CONCLUSIONS DR AWN BY THE TRIBUNAL WHICH HAVE BEEN EXTRACTED IN PARAGRAPH-5 O F THIS ORDER, WILL HOLD GOOD AND THESE DOCUMENTS WILL HAVE NO IMPACT O N THE CONCLUSIONS DRAWN BY THE TRIBUNAL. THEREFORE, THERE EXISTS NO R ELEVANCY OF THESE DOCUMENTS NOW SOUGHT TO BE FILED WITH REGARD TO THE ISSUE THAT WAS DECIDED BY THE TRIBUNAL. THE REVENUE CANNOT SEEK T O RAISE A TOTALLY NEW BASIS OF ASSESSMENT IN AN MA AND ON A POSSIBILI TY OF EXISTENCE OF A HIDDEN TRANSACTION AFTER LIFTING CORPORATE VEIL. IT CANNOT THEREFORE BE SAID THAT THERE WAS MISTAKE APPARENT FROM THE RECOR D WHICH CALLS FOR RECTIFICATION U/S.254(2) OF THE ACT. 12. THE POWER OF THE TRIBUNAL U/S. 254(2) OF THE AC T IS ONLY TO RECTIFY MISTAKES APPARENT ON THE FACE OF THE RECORD . THE TRIBUNAL DOES NOT HAVE POWER TO REVIEW ITS OWN ORDERS. POWER OF R EVIEW IS NOT AN INHERENT POWER BUT MUST BE CONFERRED BY LAW EITHER SPECIFICALLY OR BY NECESSARY IMPLICATION. COURTS HAVE CONSISTENTLY HEL D THAT REVIEW PROCEEDINGS IMPLY THOSE PROCEEDINGS WHERE A PARTY, AS OF RIGHT, CAN : 13 : M.P. NO. 337/BANG/2018 APPLY FOR RECONSIDERATION OF THE MATTER ALREADY DEC IDED UPON AFTER A FRESH HEARING ON THE MERITS OF THE CONTROVERSY BETW EEN THE PARTIES AND THAT SUCH A REMEDY IS AVAILABLE ONLY IF PROVIDED BY THE STATUTE. THE LAW ON POWERS OF TRIBUNAL IS WELL SETTLED AND IS GOVERN ED BY THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT, ON SCOPE OF POWE RS U/S.154 OF THE ACT, WHICH IS AKIN TO SEC.254(2) OF THE ACT, IN ITO VS VOLKART BROTHERS [(1971) 82 ITR 50 (SC)], AS FOLLOWS: .. AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS WHERE THERE MAY CONC EIVABLY BE TWO OPINIONS CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. A DECISION ON A DEBATABLE POINT OF LAW IS N OT A MISTAKE APPARENT FROM THE RECORD 13. THE PRESENT MA FILED BY THE REVENUE IS DEVOID O F ANY MERIT AND IS LIABLE TO BE DISMISSED AS WITHOUT ANY BASIS AND VIRTUALLY SEEKING A REVIEW OF THE ORDER OF THE TRIBUNAL ON A POSSIBLE H IDDEN TRANSACTION WHICH REQUIRES EXAMINATION AFTER LIFTING THE CORPOR ATE VEIL WHEN THERE THOSE WERE NEITHER THE BASIS OF ASSESSMENT BY THE A O OR CIT(A) OR THE TRIBUNAL. 14. IN THE RESULT, THE MA IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF APRIL, 2019 SD/- SD/- (JASON P. BOAZ) (N.V. VASUDEVA N) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 24 TH APRIL, 2019. TNMM : 14 : M.P. NO. 337/BANG/2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE