2024 (1) TMI 1304 - AT - Income Tax

Rectification of mistake u/s 254 - addition made by the AO/TPO on account of adjustment in relation to the international transaction of payment of guarantee fees to AE - HELD THAT - As gone through the impugned order of the Tribunal passed 2023 (6) TMI 175 - ITAT AHMEDABAD . We find merit in the contentions of the ld. Sr. counsel that the issue of adjustment 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 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 - Misc. Application of the assessee is allowed.

Summary

Issues:
1. Recall of the order passed by ITAT under section 254(2) of the Income Tax Act, 1961 regarding adjustment of guarantee fees to AE.
2. Reconsideration of the Tribunal's decision in light of the inconsistency with a similar case from the previous assessment year.

Issue 1: Recall of the ITAT Order
The assessee filed a Misc. Application seeking recall of the ITAT order passed in IT(TP)A. No. 930/Ahd/2015 to rectify a mistake apparent from the record. The issue raised was the addition made by the AO/TPO on account of adjustment of Rs. 52,91,667/- concerning the international transaction of payment of guarantee fees to AE. The Tribunal confirmed the upward adjustment, dismissing the assessee's claim. The assessee argued that a similar addition made in the previous assessment year was deleted by the ITAT, indicating a mistake in the current decision. The Tribunal agreed, recalling the order for re-adjudication specifically on ground no. 4 related to the adjustment of guarantee fees.

Issue 2: Reconsideration of Tribunal's Decision
The Tribunal overlooked the fact that a comparable case from the previous assessment year had a different outcome where the Tribunal had deleted a similar addition made by the Department. The assessee contended that this inconsistency required a reevaluation of the decision. The Tribunal acknowledged this argument, finding merit in the contention that the issue of adjustment of guarantee fees to AE needed re-consideration due to the inconsistency with the previous decision. The Tribunal recalled the order for readjudication solely on ground no. 4, emphasizing the need to address the mistake apparent from the impugned order.

In conclusion, the ITAT Ahmedabad, comprising SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER, allowed the assessee's Misc. Application, directing a re-adjudication of the issue of adjustment of guarantee fees to AE in line with the inconsistency with a similar case from the previous assessment year. The Tribunal recognized the mistake apparent from the record and recalled the order for a focused reconsideration, highlighting the importance of maintaining consistency in decisions across different assessment years.