M/S RELIANCE INDUSTRIES LIMITED, MUMBAI V. DCIT- 3(4) , MUMBAI

MA 48/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5722 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-07-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 30-05-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 25-02-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “J” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M.A. No. A.Y. Applicant Respondent 45/Mum/2024 (arising out of ITA No. 2317/M/22) 2018-19 Reliance Industries Ltd., 3 rd Floor, Maker Chamber-IV, 222, Nariman Point, Mumbai PAN: AAACR5055K ACIT, Circle-3(4), 29 th Floor, Centre No. 1, World Trade Centre, Cuffe Parade, Mumbai 46/Mum/2024 (arising out of ITA No. 2318/M/22) 2017-18 Reliance Industries Ltd., 3 rd Floor, Maker Chamber-IV, 222, Nariman Point, Mumbai PAN: AAACR5055K DCIT, Circle-3(4), 29 th Floor, Centre No. 1, World Trade Centre, Cuffe Parade, Mumbai 47/Mum/2024 (arising out of ITA No. 2587/M/22) 2017-18 Reliance Industries Ltd., 3 rd Floor, Maker Chamber-IV, 222, Nariman Point, Mumbai PAN: AAACR5055K DCIT, Circle-3(4), 29 th Floor, Centre No. 1, World Trade Centre, Cuffe Parade, Mumbai 48/Mum/2024 (arising out of ITA No. 2588/M/22) 2018-19 Reliance Industries Ltd., 3 rd Floor, Maker Chamber-IV, 222, Nariman Point, Mumbai PAN: AAACR5055K DCIT, Circle-3(4), 29 th Floor, Centre No. 1, World Trade Centre, Cuffe Parade, Mumbai For Assessee : Shri Madhur Agrawal, For Revenue : Ms. Mahita Nair, Sr.DR Date of Hearing : 31-05-2024 Date of Pronouncement : 22-07-2024 2 MA Nos. 45, 46, 47 & 48/Mum/2024 ORDER PER B.R. BASKARAN, A.M. The assessee has filed theseMiscellaneous Applications (MAs), submitting that there are mistakes apparent from record in the common order dt. 18-10-2023 passed by the Tribunal in the cross appeals relating to AYs. 2017-18 and 2018-19. The assessee has filed these MAs in the orders passed against the appeals filed by the assessee as well as by the Revenue. MA Nos. 45/Mum/2024 and 46/Mum/2024:- 2. The MA Nos. 45/Mum/2024 and 46/Mum/2024 are related to orders passed against the appeals filed by the assessee. We notice that the mistake apparent from record pointed out by the assessee in the above said MAs are identical in nature in both AYs. 2018-19 and 2017- 18. Hence, both these miscellaneous applications are disposed of together. 3. The submission of the assessee is that there is mistake apparent from record in the decision rendered by the Tribunal in both Asst.Yearson the issue ofaddition to be made under clause (f) of Explanation 1 to section 115JB of the Act for computing book profit. The AO did not accept the suo-motu addition made by the assessee for computing book profit u/s 115JB of the Act. The AO had computed the disallowance u/s 14A of the Act for computing Total income under normal provisions of the Act and adopted the very same amount under clause (f), while computing book profit u/s 115JB of the Act. The ld CIT(A), however, directed the AO to restrict the addition to the suo-motu addition made by the assessee. The Tribunal, in these two years, has restored this issue to the file of the AO on the reasoning that the suo moto disallowance made by the assessee has not been examined by the AO. It is the submission of the assessee that the Tribunal has accepted 3 MA Nos. 45, 46, 47 & 48/Mum/2024 the suo moto disallowance made by the assessee in the earlier years i.e., in AYs. 2014-15 to 2016-17.Accordingly, it is submitted that the non- consideration of the decision of the Co-ordinate Bench of the Tribunal in the current two years has resulted in a mistake apparent from record.Accordingly,it is prayed that the AO may be directed to restrict the addition to be made under clause (f) of Explanation 1 to section 115JB of the Act to suo moto disallowance made by the assessee itself. 4. We have heard the parties on this issue and perused the record. We notice that this Bench of the Tribunal has taken a particular view in the matter i.e., It is a fact that the AO did not examine the correctness or otherwise of the suo-motu addition made by the assessee under clause (f) of Explanation 1 to sec.115JB of the Act. There was no occasion for him to do so, since the AO had adopted the disallowance computed by him u/s 14A of the Act. It is well settled principle, which has also been followed by Ld CIT(A), that the disallowance computed u/s 14A should not be adopted for making addition under clause (f) of section 115JB of the Act. However, neither the AO nor the Ld CIT(A) did not examine the computation made by the assessee. Hence, the Tribunal has restored the issue to the file of the AO. Thus, it can be noticed that the Tribunal has taken a view on this issue in these two years. Since it is a factual aspect, the issues require to be examined every year independently and hence decision rendered in the earlier years cannot be taken as a binding precedent. Accordingly, we do not find any merit in these two MAs filed by the assessee. 5. In the result, MA Nos. 45 & 46/Mum/2024 are dismissed. MA No. 47/Mum/2024 6. We shall now take up MA No. 47/Mum/2024relating to AY. 2017- 18. This MA has been filed by the assessee against the order passed by the Tribunal in the appeal filed by the Revenue. The Ld.AR submitted that the Tribunal has examined the issue relating to transfer pricing 4 MA Nos. 45, 46, 47 & 48/Mum/2024 adjustment made in respect of Management Consultancy Services, Technical Services and Business Support Services rendered by the assessee to its Associated Enterprises (AEs). This issue has been adjudicated by the Tribunal in paragraph Nos. 28 to 28.7. The Ld.AR submitted that the Tribunal has observed in paragraph Nos. 28.4 to 28.6 that “the assessee does not object toexclusion of certain comparable companies, viz., MCI Management India Pvt. Ltd, and ICRA Management Consulting Services Ltd, and inclusion of M/s. JPS Associates Pvt. Ltd.”The Ld.AR submitted thatthe did not mention that it is not pressing the exclusion/inclusion of above said comparable companies. What was argued was that adjudication of inclusion/exclusion of the above said three companies will be rendered academic, if the claim of the assessee in respect of five other comparable companies is accepted. However, the observation so made by the Tribunal would convey the meaning that the assessee has accepted exclusion/inclusion of the above said companies, which is wrong and further, it will further close the judicial remedy, if any required for the assessee. Accordingly, the Ld.AR submitted thatthe above observations of the Tribunal have constituted mistake apparent from the record and accordingly prayed for rectification of the same. 7. We find merit in the above said submissions of Ld A.R. Accordingly, following paragraph No. 28.4 and 28.6 are substituted by the following paragraphs: “28.4 The A.R submitted that the Tribunal may initially adjudicate the claim of revenue (a) for inclusion of ANJ Power Technologies P Ltd, 1 to 1 Help P Ltd and Inmacs Management Services Ltd (3 companies) (b) for exclusion of Spectrum Business Solutions Ltd and Allsec Technologies Ltd (2 Companies) 5 MA Nos. 45, 46, 47 & 48/Mum/2024 He submitted that the claim of the revenue in respect of above said five companies are rejected, then the adjudication of claim for exclusion of two other companies (MCI Management India P Ltd and ICRA Management Consulting Services Ltd) and inclusion of M/s JPS Associates P Ltd.” ..... “28.6 Since we have rejected the claim of the revenue in respect of above said five companies, the adjudication of claim of revenue for the remaining three companies, viz., MCI Management India P Ltd; ICRA Management Consulting Services Ltd and JPS Associates P Ltd would be rendered academic.” MA No.48/Mum/2024 8. We shall now take up MA No.48/Mum/2024 relating to AY. 2018- 19, filed by the assessee against the order passed by the Tribunal in the appeal filed by the Revenue. In this year also, the Tribunal has observed that the claim of the assessee for inclusion/exclusion of five companies are accepted, then, the assessee will not have grievance in inclusion/exclusion of remaining four comparable companies. As submitted in AY. 2017-18, the Ld.AR submitted that assessee’s submission was that the adjudication of remaining four comparable companies would be rendered academic. Accordingly, he prayed for modification of observations made in paragraph Nos. 33.2, 33.4, 36.1 and 36.3. 9. We find merit on the above said submissions of the assessee. Accordingly, paragraph Nos. 33.2, 33.4, 36.1 and 36.3 are substituted by the following paragraphs: (A) In Paragraph No.33.2, following sentences are substituted against the existing sentences in the last eight lines:- 6 MA Nos. 45, 46, 47 & 48/Mum/2024 “The A.R submitted that if the decision rendered by Ld CIT(A) is confirmed in respect of following five comparable companies, then the adjudication of claim for exclusion/inclusion of remaining four comparable companies would be rendered academic:- (i) Specturm Business Solultions Ltd (Revenue seeks exclusion) (ii) Allsec Technologies Ltd (Revenue seeks exclusion) (iii) ANJ Power Technologies P Ltd (Revenue seeks inclusion) (iv) 1 to 1 Help P Ltd (Revenue seeks inclusion) (v) Inmacs Management Services P Ltd (Revenue seeks inclusion)” (B) The existing paragraph 33.4 is substituted by the following paragraph:- “33.4 Since we have upheld the decision taken by Ld CIT(A) in respect of the above cited five comparable companies, the adjudication of claim of revenue in respect of remaining four comparable companies is rendered academic in nature.” (C) In Paragraph No.36.1, following sentences are substitutedagainst the existing sentences in the last sevenlines:- “ The Ld. AR submitted that if the Tribunal upholds the order of Ld CIT(A) in respect of following three comparable companies, then the adjudication of claim of revenue in respect of remaining seven companies will be rendered academic in nature:- (a) BVG India Ltd (b) ANJ Power Technologies P Ltd (c) Empire Industries Ltd.” (D) The paragraph no.36.3 is substituted by the following paragraph:- “36.3 Since we have upheld the order passed by the Ld CIT(A) in respect of above said three companies, then the adjudication of claim of revenue with regard to remaining 7 comparable companies 7 MA Nos. 45, 46, 47 & 48/Mum/2024 will be rendered academic. The ALP may be determined afresh in the light of our decision discussed above.” 10. In the result, both these MAs are allowed. 11. To sum-up, MA Nos. 47 & 48/Mum/2024 are allowed and MA Nos. 45 & 46/Mum/2024 are dismissed. Order pronounced in the open Court on 22-07-2024 Sd/- Sd/- [PAVAN KUMAR GADALE] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 22-07-2024 TNMM 8 MA Nos. 45, 46, 47 & 48/Mum/2024 Copy to 1. The Applicant 2. The Respondent 3. The Pr. CIT, Mumbai concerned 4. D.R. ITAT, “J” Bench, Mumbai. 5. Guard File. //By Order// //True Copy // Dy./Asst. Registrar, ITAT, Mumbai