Bosch Rexroth (India) Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(1)(3), Ahmedabad

MA 85/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9050 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-10-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 03-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction
• Section: 254(2)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘D’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Misc.Application No.85/Ahd/2023 IN IT(TP)A No.930/Ahd/2015 Assessment Year :2010-11 M/s.Bosch Rexroth (India) Ltd. Sanand Viragam Highway MoujeLyava, Tal: Sanand Dist. Ahmedabad 382 170. ITO, Ward-1(1)(3) Ahmedabad. (Applicant) (Responent) Assesseeby : Shri S.N. Soparkar, Sr.Advocate with Shri Parin Shah, ARs. Revenue by : Shri Alok Kumar, CIT-DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 27/10/2023 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 2 4 / 0 1 / 2 0 2 4 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER By way of the present Misc. Application filed under section 254(2) of the Income Tax Act, 1961, assessee is seeking recall of the order of the ITAT passed in IT(TP)A.No.930/Ahd/2015 dated 31.5.2023 to the extent of mistake apparent from record, which the assessee has pointed out in its MA. 2. In the MA, amongst other, it was pointed out that the assesseehad raised the issue of addition made by the AO/TPO on account of adjustment of Rs.52,91,667/- in relation to the MA No.85/Ahd/2025 2 international transaction of payment of guarantee fees to AE and the assessee sought the deletion of the same before the Tribunal in its above appeal. This issue was raised in ground no.4 in ITA No.930/Ahd/2015. However, the Tribunal vide impugned order confirmed the upward adjustment so made by the lower authorities and dismissed the claim of the assessee. It was further pointed out that the Tribunal while confirming the order of the lower authorities did not appreciate the fact that similar addition made by the Department for the Asst.Year 2009-10 was deleted by the ITAT by holding that the payment for guarantee commission was justifiable, and therefore, the finding of the Tribunal for the impugned year is contrary to its earlier decision on the similar issue. Therefore, this being a mistake apparent on record of the case, the same requires tobe re-considered in line with finding of the earlier year, and the claim of the assessee be allowed by recalling the impugned order to the extent of reconsidering ground no.4 in ITA No.930/Ahd/2015. For brevity, we reproduce the contents of the MA as under: “The Appellant begs to present this application for rectification of certain mistakes which are apparent from record in the order of the Hon'ble Tribunal, and which are discussed herein below; In the grounds of appeal filed before the Hon'ble Tribunal, the Applicant had raised the issue of adjustment of INR 52,91,667/- towards payment of guarantee fees to associated enterprise (AE). Copy of the Form 366 along with grounds of appeal is attached as Annexure 2. For ready reference the ground No. 4 raised before Hon'ble Tribunal reads as follows: "4. On the facts and in the circumstances of the case and in law, the Id. AO/TPO under the directions of Hon'ble DRP, erred in making adjustment of INR 52,91,667/- in relation to the international transaction of payment of guarantee fees to AE. The Appellant prays that the additions made by the Id. AO/TPO in relation to the international transaction of payment guarantee fees to AE be deleted." 2.2. The Hon'ble Tribunal erred in not appreciating that the Hon'ble Tribunal had concurred with the order of the Ld. CIT(A) in the Appellant's MA No.85/Ahd/2025 3 own case in AY 2009-10, and held the payment for guarantee commission to be justifiable. 2.3. Thereby, the Hon'ble Tribunal has grossly missed/omitted the findings by the Bench in the Appellant's own case of AY 2009-10 involving same transaction and circumstances and has disregarded the rule of consistency. 2.4. Further, The Hon'ble Tribunal disposed of ground No. 4 of the appeal in the impugned order by holding as follows: "22. Further, the basis for rejecting the comparable provided by the assessee for benchmarking its transactions using CUP was also not controverted by the Id.counselfor the assessee before us. The TPO had pointed out that while the comparable transaction was a short term loan transaction which the assessee had shown to have attracted interest rate at 16%. The transactions undertaken by the assessee with its AEfor borrowing of Rs.ioo crores was for the acquisition of capital assets, and was a long term borrowing, therefore, noting this basic distinction in the character of two transactions, the comparable selected was not suitable and appropriate, and has been rightly rejected by the Revenue authorities, we hold." 2.5. The Hon'ble Tribunal erred in rejecting the CUP on the assumption that the loan from the AE was a long term borrowing, disregarding the submission made by the Appellant (DRP Application Page no. 42 of Volume II of the paper book) that the loan from the AE was a short term borrowing and not long term as presumed by the Ld. TPO. This is also evident from the Note No. 4 of the audited financial statements for AY 2010-11. A copy of the audited financial statements is submitted as part of the paper book filed before the Hon'ble Tribunal (Page No. 77 of Volume I of the paper book). 3. Prayer: 3.1. Based on all the facts mentioned above and the events as occurred during the course of proceedings before the Hon'ble Tribunal, it is humbly prayed that this Miscellaneous Application under Section 254(2) of the Act may kindly be admitted and adjudicated upon. The Applicant most respectfully prays, that the Hon'ble Tribunal be pleased to: a. Rectify the mistake apparent on record as mentioned above in the order dated 31 May 2023; or b. In the alternative, recall the order dated 31 May 2023, to the extent of the mistake and decide afresh by giving reasonable opportunity; or c. Grant any other relief which the Hon'ble Bench deems fit and proper considering the facts of the applicant.” 3. The ld.Sr.Counsel for the assessee contended that the Tribunal, in affirming the lower authority’s decision on the issue, MA No.85/Ahd/2025 4 seemingly overlooked the fact that a similar addition made by the Department for the Asst.Year 2009-10 was deleted by the Tribunal. He further submitted that this order of the Tribunal for Asst.Year 2009-10 was challenged by the Revenue before the jurisdictional High Court in Tax Appeal No.886 of 2018, and the Hon’ble High Court vide order dated 23.7.2018 upheld the order of the Tribunal, and in the light of the same, the inconsistent findings in the present comparable issue requires to be relooked into. A copy of decision of the Hon’ble High Court is placed on record. It is, therefore, urged by the ld.Sr.counsel that impugned order be recalled to the extent of reconsidering ground no.4 in ITA No.930/Ahd/2015. On the other hand, the ld.DR supported the finding of the Tribunal on the issue, and urged not to disturb the findings of the Tribunal in the impugned appeal being ITA No.930/Ahd/2015. 4. We heard both the parties, and gone through the impugned order of the Tribunal passed in ITA No.930/Ahd/2015 dated 31.05.2023. We find merit in the contentions of the ld.Sr.counsel that the issue of adjustment of Rs.52,91,667/- in relation to the international transaction of payment of guarantee fees to AE as raised in ground no.4 require a re-consideration in view of the submissions of the assessee that in a comparable case for the earlier year i.e. Asst.Year 2009-10, the Tribunal had deleted the similar addition made by the AO/TPO. This plea of the assessee was not taken into account by the Tribunal while rejecting the claim of transfer pricing adjustment of Rs.52,91,667/- in respect of guarantee fees in the present assessment year. This seems to be a mistake apparent from the impugned order, which requires to be recalled and re-adjudicated upon. Therefore, finding merit in the MA No.85/Ahd/2025 5 contentions of the assessee, we recall the order of the Tribunal qua ITA No.930/Ahd/2015 dated 31.5.2023 to the limited purpose of re- adjudicating ground no.4 only. 5. The Registry is accordingly directed to fix ITA No.930/Ahd/2015 for hearing in the normal course. The parties be informed accordingly. 6. In the result, the Misc.Application of the assessee is allowed. Order pronounced in the Court on 24 th January, 2024 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad,dated 24/01/2024