MModal Global Services P Ltd, Bangalore V. Commissioner of Income tax, Bangalore

MA 49/BANG/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4418 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 01-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RENUKA DEVI P
• Assessee Lawyers: PARAS S SAVLA
• Keywords: Transfer pricing; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.176 & 196(B.)/2012) (ASSESSMENT YEARS : 2005-06) M/S MMODAL GOBAL SERVICES PVT. LTD., (FORMERLY C BAY SYSTEMS (IND.) PVT. LTD., ANJANEYA TECHNO PARK, 147,4 TH FLOOR, KODIHALLI, AIRPORT ROAD, BANGALRE-560 008 PETITIONER VS THE COMMISSIONER OF INCOME-TAX(A)-IV, BANGALORE RESPONDENT PETITIONER BY : SHRI PARAS S SAVLA, CA RESPONDENT BY : MS. RENUKA DEVI, P. JCIT DATE OF HEARING : 2 4-06-2016 DATE OF PRONOUNCEMENT : 22-07-2 016 O R D E R PER SHRI A.K.GARODIA, AM BOTH THESE MISCELLANEOUS PETITIONS ARE FIL ED BY THE ASSESSEE REQUESTING FOR SOME RECTIFICATION IN THE TRIBUNAL ORDER IN IT( TP)A NO.196 & 176(B)/2012 DATED 29-05-2015. BOTH THESE MPS ARE IDENTICAL AN D THE MISTAKES IN THE TRIBUNAL ORDER POINTED OUT BY THE ASSESSEE IN THESE MPS ARE CONTAINED ON PAGES 5 & 6 OF THE MPS AND THESE CONTENTS ARE REPRO DUCED BELOW FOR THE SAKE OF READY REFERENCE:- M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 2 A) IT IS MOST RESPECTFULLY SUBMITTED THAT IN SO FAR AS THE HON'BLE TRIBUNAL'S DECISION RELATES TO THE TRANSFER PRICING ISSUES OTHER THAN ON ADMISSION OF ADDITIONAL EVIDENCE, WHICH IS WITHOUT AN Y ARGUMENTS MADE BY ANY OF THE PARTY, IS A MISTAKE APPARENT FROM RECORD AND MA Y BE RECTIFIED . 18. TH E APPLI C ANT M OS T RE S PE C TFULL Y SUBMITS TH A T TH E H O N ' BL E GUJ A R AT HI G H CO UR T H AS HELD TH A T TH E TRIBUN A L CA N RECTIF Y S UCH A MIST A K E A PP A R E NT F R O M ER R O R . TH E R E L EVA NT EX TRA C T OF THE CASE IN AS B E L OW : PAR A 8 OF THE D Y. C IT V . MA NU P . V YA S [2013] 3 2 T AX M A NN .CO M 176 ( GUJ. ) ' 8 . IN T H E R ES ULT , WE D O N O T F IND A N Y M ERITS IN TH E P ET I T I O N IN WH I C H T H E PRIN C IP A L S T A ND OF TH E D E P A RTM E N T I S TH A T T H E T RIBUN A L CO ULD N O T H A VE R ECA LL E D I TS O RD ER W H IC H W AS RE N DE R E D O N M ER IT S AFTE R B Y P A RTIT E H EAR IN G. WHEN W E FIND THAT TH E TRIBUNAL PRO C EEDED TO DE C ID E CE RTAIN ISSUES ON MERITS WITHOUT GIVING FULL OPPORTUNITY TO THE AGGRIEVED PARTY TO MAKE SUBMISSIONS THEREON, THE ORDER DID CERTAINLY STIFFER FROM AN ERROR APPARENT ON THE RECORD. TRIBUNAL, THEREFORE, C OMMITT E D NO E RROR IN EXER C ISING POWER OF RECTIFICATION. EMPHA S IS SUPPLIED 19. TH E ABOVE JU DGME N T OF TH E G UJ A R A T HI G H COURT H AS A L S O B EEN ACCE PT E D B Y T H E DE P ARTMENT S IN CE N O SL P H AS B EE N F IL E D B Y TH E D E P A R T M E NT IN TH E HO N ' BL E S U P R E M E CO URT . M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 3 20. IN VI EW O F TH E AB OVE , TH E APPLICANT HUMBLY PR AYS THAT ORDER IN S O F A R AS IT R E LAT ES TO TR A N S F E R PRI C IN G I SS U ES O TH E R THAN TH E I SS U E O F A DMI SS I O N O F A DDITI O N A L EV ID E N CE , W HI C H I S PAR A 7 , P A R A 8 , P A R A 1 2, P A R A 1 3 , P ARA 14 A ND P A R A 1 5 , B E ES CH EWE D . 21. W I TH O UT P RE JUDIC E TO TH E AB OV E , T H E A PPL ICA N T M OS T RES P EC T F ULL Y S UBMIT S TH A T A N O PP O R T UNI TY OF B E I NG H EA RD B E G R A NTED W HICH WOULD E NT A IL R E C A LLIN G TH E O RDER A ND FI X IN G IT F O R H EA RIN G AF R ES H. 22 . TH E A PPLI CA NT TH US HUMBL Y PR AYS TH A T ; A.T H E MI S T AKE R E F E RRED AB OVE B E R EC TIFI E D , B.TH A T TH E O RD E R M AY B E R ECA LL E D T O TH E EX T EN T OF TH E MI S T A K ES , C.GRANTING OF SUCH OTHER RELIEF WHICH THE HONBLE TRIBUNAL DEEMS FIT AND PROPER. 23. THE APPELLANT CRAVES LEAVE TO FILE SUCH DOCUMENTS AND EVIDENCES AS MAY BE REQUIRED DURING THE COURSE OF HEARING. 2. IN THE COURSE OF HEARING BEFORE US, THE LD. AR O F THE ASSESSEE SUBMITTED THAT THE RELEVANT DECISION OF THE TRIBUNA L IS AS PER PARA 7.3.1 OF THE TRIBUNAL ORDER. HE ALSO PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF SHRI RAJENDRA M VYAS AND MA NUBHAI P VYAS VS DCIT IN MA NO. 88 & 89/AHD/2012 DATED 23-07-2013, C OPY AVAILABLE ON PAGES 1-4 OF THE LEGAL PAPER BOOK. HE ALSO PLAC ED RELIANCE ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE SAME CASE AS REPORTED IN 33 TAXMANN.COM 345(GUJ.) COPY AVAILA BLE ON PAGES 5-7 OF THE LEGAL PAPER BOOK. HE ALSO PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF RAHULKUMAR BAJAJVS ITO AS R EPORTED IN 69 ITD 1(NAGPUR). THEREAFTER, HE SUBMITTED THAT IN PARA -13 OF THE M.P., IT IS M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 4 SUBMITTED BY THE ASSESSEE THAT FOR OTHER GROUNDS OF APPEAL IN CONNECTION WITH THE TP ISSUES, BOTH PARTIES HAD NOT ARGUED ON THIS BASIS THAT ADDITIONAL EVIDENCE SHOULD BE ADMITTED A ND THEREAFTER, THE ISSUES WILL BE ACADEMIC AND IN THE COURSE OF HEARIN G, THE LD, DR OF THE REVENUE ALSO ACCEPTED THAT THE OTHER ISSUES HAD BEC OME ACADEMIC. HE SUBMITTED THAT IN THE LIGHT OF THESE FACTS AND AS PER JUDICIAL PRONOUNCEMENTS CITED BY HIM, THE IMPUGNED TRIBUNAL ORDER SHOULD BE RECALLED. THE LD. DR OF THE REVENUE SUBMITTED THAT THERE IS NO MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS. REGARDING THE FACTUAL ASPECT THAT IN CONNECTION WITH THE GROUNDS OF APPEA L IN RESPECT OF TP ISSUES, NO ARGUMENT WAS MADE BY ANY OF THE TWO SIDE S, WE FIND THAT IN THE IMPUGNED TRIBUNAL ORDER, IN RESPECT OF ALL THE ISSUES, IT IS NOTED BY THE TRIBUNAL THAT THE RIVAL CONTENTIONS WERE HEARD. THEREFORE, IT DOES NOT COME OUT FROM THE IMPUGNED TRIBUNAL ORDER THAT ON TP ISSUES, NO ARGUMENT WAS ADVANCED BY ANY OF THE TWO SIDES. WE ALSO FIND THAT AS PER THE FOLLOWING PARA ON PAGE-23 OF THE IMPUGNED T RIBUNAL ORDER, THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE FILE O F THE AO TO REFER THE QUESTION OF DETERMINING OF ALP INCLUDING THE QUESTI ON OF DETERMINATION OF MAM TO THE TPO. THIS PARA FROM PAGE-23 OF THE T RIBUNAL ORDER IS RE- PRODUCED HEREIN BELOW; IN THE LIGHT OF THE DECISION RENDERED BY THE TRIBUNAL IN ASSESSEES OWN M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 5 CASE (SUPRA) UNDER IDENTICAL FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT WOULD BE JUST AND APPROPRIATE TO SET ASIDE THE ORDER OF THE AO ON THIS ISSUE AND DIRECT THE AO TO REFER THE QUESTION OF DETERMINATION OF ALPO INCLUDING THE QUESTION OF DETERMINATION OF MAM TO THE TPO. 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. AS PER THE ABOVE PARA, IT IS SEEN THAT THE TRIBUNAL HAS RESTORED THE TP ISSUE TO THE AO/TPO IN THE LIGHT OF THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR AY: 2004-05. NOW, IN THE LIGHT OF THESE FACTS, WE EXAMINE AND DECIDE THE CONTENTION OF THE ASSESSEE I N THE MP AND THE ARGUMENTS OF THE LD.AR OF THE ASSESSEE IN THE COURS E OF HEARING BEFORE US. 4. IN THE MP THE STAND OF THE ASSESSEE IS THAT REGA RDING OTHER GROUNDS OF APPEAL IN CONNECTION WITH THE TP ISSUES, BOTH PARTIES HAD NOT ARGUED ON THE BASIS THAT THE ADDITIONAL EVIDENC E SHOULD BE ADMITTED AND THE ISSUES HAVE BECOME ACADEMIC. WE H AVE SEEN THAT IT IS NOTED BY THE TRIBUNAL IN THE IMPUGNED ORDER THAT RIVAL CONTENTIONS WERE HEARD IN RESPECT OF ALL THE ISSUES AND HENCE, IT IS SEEN THAT THIS CONTENTION OF THE ASSESSEE THAT NO ARGUMENT WAS RAI SED BY ANY SIDE IS NOT SUPPORTED BY ANY EVIDENCE. SINCE THE TRIBUNAL HAS FOLLOWED THE M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 6 TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR AY: 2004- 05 IN RESTORING THE MATTER BACK TO THE FILE OF THE AO/TPO IN RESPECT OF DETERMINATION OF ALP AND MAM, IT CANNOT BE SAID OR ACCEPTED THAT THERE I S ANY MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. REGARDING THE TRIBUNAL DEC ISION IN THE CASE OF RAJENDRA M VYAS (SUPRA) AND SUBSEQUENT JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE SAME CASE, IT WAS HELD TH AT NO ARGUMENT ON THE MERITS HAD TAKEN PLACE BEFORE THE TRIBUNAL. IT IS NOTED BY THE TRIBUNAL IN PARA-4 OF THE M.A IN THAT CASE THAT ON RECALLING THE ARGUMENTS OF THE LD. AR OF THE ASSESSEE US ON THE E ARLIER OCCASION (CONSTITUTION OF BENCH BEING SAME), THE TRIBUNAL AG REED THAT THE ASSESSEE WAS PREVENTED FROM ARGUING THE CASE ON MER IT AT THE TIME OF HEARING ON THE EARLIER OCCASION BEFORE THE TRIBUNAL HAVING SAME CONSTITUTION. IN THE PRESENT CASE, THE CONSTITUTIO N OF THE TRIBUNAL BENCH WHICH HEARD THE APPEAL WAS DIFFERENT CONSISTI NG OF SHRI N.V.VASUDEAVAN, JM AND SHRI JASON P BOAZ, AM AND CO NSTITUTION IN HEARING THE MP IS A.K.GARODIA AM & VIJAY PAL RAO, J M. BECAUSE OF THIS DIFFERENCE, THE BENCH HEARING THE MP CANNOT RECALL OR COME TO KNOW AS TO WHAT HAPPENED IN THE COURSE OF HEARING OF THE MA IN APPEALS AND THEREFORE, THIS TRIBUNAL ORDER AND SUBSEQUENT JUDGM ENT OF HONBLE GUJARAT HIGH COURT IS OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. 5. NOW WE CONSIDER THE APPLICABILITY OF THE TRIBUNA L ORDER RENDERED IN THE CASE OF RAHULKUMAR BAJAJ VS ITO (SU PRA). THIS TRIBUNAL ORDER IS NOT APPLICABLE IN THE PRESENT CAS E BECAUSE IN THAT CASE, THE TRIBUNAL HAS DECIDED THE ISSUE REGARDING VALIDITY OF RE-OPENING M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 7 IN FAVOUR OF THE ASSESSEE AND IT WAS HELD THAT RE-O PENING OF THE PROCEEDINGS BY THE AO WAS BAD IN LAW AND THEREFORE, THE RE-ASSESSMENT ORDER IS QUASHED. THEREAFTER, THE TRIBUNAL DECIDED THE ISSUE ON MERIT ALSO AND THE ISSUE ON MERIT WAS DECIDED AGAINST THE ASSESSEE. UNDER THESE FACTS, THE MA WAS FILED BY THE ASSESSEE AND I T WAS HELD BY THE SPECIAL BENCH OF THE TRIBUNAL IN THAT CASE THAT ONC E VALIDITY ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE, THERE WAS NO REQ UIREMENT/NECESSITY TO DECIDE THE OTHER ISSUES. IN THE PRESENT CASE, I T IS NOT THAT THE VALIDITY OF THE ASSESSMENT ORDER ISSUE HAS BEEN DECIDED BY T HE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND THE ASSESSMENT ORDER IS QUASHED AND THEREFORE, THERE IS NO NEED TO DECIDE ANY ISSUE ON MERIT. HENCEE, THIS TRIBUNAL ORDER IS NOT APPLICABLE IN THE PRESENT CAS E. 6. AS PER ABOVE DISCUSSION, WE HAVE SEEN THAT NONE OF THE JUDGMENTS CITED BY THE LD. AR OF THE ASSESSEE IS RE NDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. WE HAVE ALSO SE EN THAT THE ASSESSEE COULD NOT SUPPORT ITS CONTENTION THAT NO ARGUMENT W AS MADE BY ANY SIDE ON TP ISSUE BECAUSE THE TRIBUNAL HAS NOTED IN THE ORDER THAT RIVAL SUBMISSIONS WERE CONSIDERED. THE ASSESSEE HAS NOT EVEN FILED AN AFFIDAVIT OF MS. KARISHMA R PHATARPHEKAR, CA, WHO A PPEARED BEFORE THE TRIBUNAL DURING THE APPELLATE PROCEEDINGS AS AR OF THE ASSESSEE IN SUPPORT OF ASSESSEES CONTENTION THAT NO ARGUMENT W AS RAISED BY ANY SIDE ON TP ISSUE. 7. THE ASSESSEE HAS ALSO HAS NOT SUBMITTED ANY AFFI DAVIT OF ANY DIRECTOR OR OFFICER OF THE ASSESSEE COMPANY IN SUPP ORT OF THIS M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 8 CONTENTION. CONSIDERING ALL THESE FACTS AND IN VIE W OF THE ABOVE DISCUSSION, WE HOLD THAT THERE IS NO APPARENT MISTA KE IN THE TRIBUNAL ORDER. 8. IN THE RESULT, BOTH THE MPS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (VIJAY PAL RAO) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE: D A T E D : 22-07.2016 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE M.A.NOS.49 & 50(B)/2016 (IN IT(TP)A NOS.196 & 176(B)/2012 9 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DR AFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADIN G THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER