2020 (8) TMI 834 - AT - Income Tax

Rectification of mistake - TP Adjustment - comparable selection - AR submitted that there is a mistake apparent from the record in the order of Hon'ble Tribunal in respect of Ground of appeal No.3, where the assessee sought inclusion of 7 companies in the list of comparable for ITES segment - As submitted that the tribunal has fell into error in not considering the decision rendered by co-ordinate bench and the same constitute mistake apparent from record - HELD THAT - We find merit in the submissions of ld. AR. Non-consideration of decision of co-ordinate bench cited before the tribunal is a mistake apparent from record in the case of Honda Siel Power Products Ltd. 2007 (11) TMI 8 - SUPREME COURT . Accordingly, the Ground 3(l) in so far as it is related to I2T2 India Limited deserves to be recalled. Ground of appeal No.4C pertains to erroneous computation of TP Adjustment of ITES segment by TPO taking into account both domestic and international transactions. The Ground of appeal No.4D pertains to foreign exchange gains arising from the provision of services in ITES segment, and was correctly remanded to the file of TPO. But the working capital adjustment referred in line 3 Para 10 above does not pertain to the above grounds and has to be excluded and whereas TP adjustment in non-AE transactions relates to ground of appeal no 4D and prayed for modification of Para in the order. We found the mistake pointed out by LdAr is a mistake apparent on record, accordingly we substitute the Para 10 of the order. Ld. AO/Ld. TPO erred in law in erroneously not granting complete credit for advance tax and self-assessment tax paid by the Appellant, as claimed in the return of income AO/Ld. TPO erred in law in erroneously not granting credit for Minimum Alternate Tax (MAT), as claimed in the return of income under section 115JAA of the Act. We found that there are no observations of the tribunal on these two grounds of appeal and there is a mistake apparent on record. Accordingly, we recall the impugned order of the Tribunal for limited purpose to adjudicate these grounds of appeal. Accordingly, Ground No.3(l), 8 9 are recalled

Summary

Issues involved:
1. Mistakes apparent from the record in the order passed by the Tribunal for the Asst. Year 2014-15.
2. Exclusion of certain companies in the list of comparables for ITES segment.
3. Non-consideration of decision of a co-ordinate bench.
4. Remand of foreign exchange gain and Working Capital Adjustment issue to the file of TPO.
5. Grounds of Appeal not dealt with by the Tribunal.

Detailed Analysis:
1. The Misc. Petition was filed by the assessee pointing out mistakes apparent from the record in the Tribunal's order for the Asst. Year 2014-15. The Authorized Representative highlighted a mistake in the rejection of a comparable company, I2T2 India Limited, for inclusion in the list of comparables for the ITES segment. The Tribunal had excluded certain companies based on a co-ordinate bench's order, but the AR argued that I2T2 India Limited met all TPO filters and should have been included. The Tribunal agreed with the AR, citing the Honda Siel Power Products Ltd. case, and recalled the decision regarding I2T2 India Limited.

2. The second issue revolved around the remand of the foreign exchange gain and Working Capital Adjustment issue to the TPO. The AR contended that the Tribunal had remanded the issue based on incorrect grounds, as the Working Capital Adjustment did not pertain to the grounds mentioned. The AR requested a modification of the order, which the Tribunal accepted, substituting the relevant paragraph to rectify the mistake.

3. The final issue concerned Grounds of Appeal 8 & 9, which were not addressed by the Tribunal in the order. The AR pointed out this oversight, and the Tribunal acknowledged the mistake. The Tribunal decided to recall the impugned order for the limited purpose of adjudicating these grounds of appeal, directing the registry to schedule a hearing for the same.

In conclusion, the Tribunal allowed the misc. petition filed by the assessee, addressing the various mistakes apparent from the record in the original order and ensuring a fair consideration of all relevant issues.