9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (1) TMI 647 - AT - Income TaxRectification of mistakes - Exclusion of US Branch sales from the total turnover as well as from the export turnover while computing the deduction u/s 10B - Held that - The power to rectify a mistake u/s 254(2) cannot be used for recalling the entire order. No power of review has been given to the Tribunal under the IT Act. The assessee has not fulfilled the conditions laid down in section 10B as it speaks only of exports out of India, irrespective of the purchases & the facts remain that the goods have not been physically exported out of India and therefore the important and necessary condition precedent for claiming deduction u/s 10B has not been satisfied. As such, the assessee wants to review the order of the Tribunal in the instant case u/s 254(2) which is not permissible under ITAT Rules - against assessee.
Issues:
Rectification of findings regarding exclusion of US Branch sales from total turnover for deduction u/s 10B of the Act. Analysis: The applicant sought rectification of findings in the Tribunal's order related to the exclusion of US Branch sales from total turnover for deduction u/s 10B of the Act. The applicant argued that the CIT (A) erred in directing the AO to exclude US Branch sales from total turnover and export turnover. The applicant contended that the sales made in the foreign branch should be considered as export sales. The applicant highlighted that the work carried out in India significantly contributes to the sales made in the foreign branch. Additionally, the applicant emphasized that the branch is merely a liaison office between the Indian Principal Company and foreign customers, suggesting that branch sales should be treated as head office sales and, consequently, export sales. The applicant referenced the judgment of the Delhi High Court and a 3rd Member case to support their contentions. However, the DR argued that the issue of Special Bench is not relevant to the case concerning branch sales, asserting that the applicant is not entitled to deduction u/s 10B of the Act for branch sales. The Tribunal analyzed the submissions of both parties and examined the relevant material on record. The Tribunal noted that the term "exports out of India" is not defined in the Act and emphasized that the physical movement of goods out of India is essential to constitute exports. The Tribunal rejected the applicant's argument that goods do not need to cross India's boundary for exports, stating that the goods must physically leave India for the deduction u/s 10B to apply. The Tribunal distinguished the cited judgment related to on-site development expenditure outside India from the current case of branch sales outside India. The Tribunal concluded that the order was a conscious decision after due consideration of all relevant factors, and there was no apparent error in the record. The Tribunal discussed the limited scope of section 254(2) for rectification of mistakes and highlighted that recalling the entire order is not permissible under the ITAT Rules. The Tribunal further clarified that the power to rectify a mistake under section 254(2) does not extend to recalling the entire order and passing a fresh decision, as it would amount to a review of the entire order, which is not allowed under the IT Act. The Tribunal emphasized that the applicant did not meet the conditions specified in section 10B of the Act regarding the issues in dispute. Consequently, the Tribunal rejected the applicant's request to review the order under section 254(2) of the Act, deeming the arguments put forth by the applicant's counsel as lacking merit. Ultimately, the Tribunal dismissed the Misc. Application filed by the applicant.
|
