2020 (8) TMI 877 - AT - Income Tax

Rectification of mistake - Comparable selection - HELD THAT - This Tribunal, inadvertently did not adjudicate comparability of following comparables with assessee with E-Zest Solutions and Softsole India Ltd - We accordingly, recall this ground for limited purposes of adjudicating comparability of E-Zest Solutions and Softsole India Ltd., with assessee. Computation of deduction u/s 10A - CIT(A) upholding the action of the learned AO in not allowing deduction under section 10A of the Act on the enhanced export income determined as per Mutual Agreement between the Competent Authorities ( CA ) - HELD THAT - The argument of Ld.AR regarding export income determined as per MAP as accepted by assessee. However we note that there inadvertently a view has not been expressed in this regard. We also note that corporate ground in revenue s appeal though have been discussed, however since it is appearing under ground 15-16 of assessee s appeal, conclusion needs to be also modified. Accordingly, we recall impugned order for limited purposes of adjudicating Ground 15-16 in assessee s appeal and Ground No.1 in revenue s appeal under corporate tax issues. MP of assessee allowed.

Summary

Issues:
1. Adjudication of mistakes apparent on record in the order dated 23/10/2019 regarding rejection of companies for IT services.
2. Determination of correct operating cost mark-up earned by the Petitioner.
3. Challenging the order of the learned CIT(A) regarding deduction under section 10A of the Act on enhanced export income.
4. Consideration of income enhancement as transfer pricing adjustment under section 92C(4) of the Act.
5. Departmental appeal challenging the computation of deduction under section 10A of the Act.

Issue 1 - Mistakes Apparent on Record:
The appellant filed miscellaneous petitions pointing out mistakes in the order dated 23/10/2019, specifically related to the rejection of companies for IT services. The Tribunal inadvertently missed adjudicating on E-Zest Solutions Ltd. and Softsol India Ltd. The correct operating cost mark-up earned by the Petitioner was determined to be 15.58%, different from the 14.83% mentioned in the order. The Tribunal recalled the ground for limited purposes to adjudicate the comparability of E-Zest Solutions and Softsol India Ltd. with the assessee.

Issue 2 - Corporate Tax Ground - Appellant Appeal:
The Petitioner challenged the order of the learned CIT(A) regarding the deduction under section 10A of the Act on enhanced export income. The Tribunal noted that the CIT(A) and the AO erred in considering the income enhancement as a transfer pricing adjustment under section 92C(4) of the Act. The Tribunal recalled the impugned order to adjudicate Ground 15-16 in the appellant's appeal.

Issue 3 - Corporate Tax Ground - Departmental Appeal:
The Department challenged the order of the learned CIT(A) regarding the computation of deduction under section 10A of the Act. The Tribunal observed that the Department's appeal related to the same issue as discussed in the appellant's appeal. The Tribunal recalled the impugned order to adjudicate Ground No.1 in the revenue's appeal under corporate tax issues.

In conclusion, the Tribunal allowed the miscellaneous petition filed by the assessee, recalling the impugned order for limited purposes to address the issues raised regarding mistakes apparent on record and corporate tax grounds in both the appellant's and revenue's appeal. The order was pronounced in the open court on 14th Aug 2020.