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TMI Blog2019 (4) TMI 1612X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing of appeals because of suppression of the above facts by the Assessee HELD THAT:- DR was unable to explain the relevance of the documents now sought to be filed before us for deciding the issue that was for consideration before the AO. As we have already mentioned these documents were neither the basis of assessment or the basis of conclusions by the CIT(A) for its conclusions on the addition that was in challenge before the Tribunal. These documents were never sought to be relied upon by the learned DR when the appeal was heard nor was there any allegation of any hidden transaction requiring examination by the Tribunal after lifting the corporate veil. These documents could not have been relied upon by the learned DR when the appeal was argued for the reason that these documents were not the basis on which the assessment and the addition challenged before the Tribunal were made by the AO and confirmed and enhanced by the CIT(A). Even in the allegation in the MA is that the Assessee has failed to place the documents now sought to be filed before Tribunal by the Revenue. The conclusions drawn by the Tribunal which have been extracted in Paragraph-5 of this order, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se goods as sellers on internet platform under the name Flipkart.Com . The AO further noticed that the Assessee has been purchasing goods at say ₹ 100/- and selling them to the retailers at ₹ 80/-. The purchases during the relevant previous year was ₹ 10335,73,05,882/- and sales was ₹ 9351,75,05,319/-. After excluding closing stock of unsold goods, the purchase and sales figure were as follows: Purchases Rs.10335,73,05,882 Less: Stock Unsold ₹ 741,83,06,836 ₹ 9593,89,99,046 Less: Sale value ₹ 9351,75,05,319 Gross Loss ₹ 242,14,93,727 4. The loss in terms of percentage was 2.52% of the cost of purchase value. The AO was of the view that the action of the Assessee in selling goods at less than cost price was not a normal business practice. In the order of assessment, the AO concluded that the Assessee followed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly by a process of reverse working the sum to be disallowed was worked out by the AO as follows: A.Y:2012-13 - ₹ 8,18,81,560 A.Y:2013-l4 - ₹ 45,14,69,521 A.Y:2014-15 - ₹ 143,22,15,931 After allowing the above deduction for AN 2012-13, 2013-14 and 2014-15 the addition to be made was worked out as under: A sum of ₹ 1204,67,98,537/- was added to the total income of the Assessee. On appeal by the Assessee, the CIT(A) not only confirmed the action of the AO but in exercise of his powers of enhancement held that the Assessee was not entitled to depreciation on the capitalized value of intangible. 5. On appeal by the Assessee, this Tribunal held that the starting point for computing income from business is the profit or loss as per the profit and loss account of the Assessee, which cannot be disregarded unless certain provisions (Section 145(3)) of the IT Act are invoked. Since the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he attention of Hon'ble tribunal that the goods were purchased and sold to WS Retail Pvt Ltd (Retail arm of the Taxpayer) at less than the cost with a condition to sell the same only through the Web portal Flipkart.com. This would amount to controlled transaction in order to attract customers and create intangible asset in the form of goodwill/brand value of its web portal Flipkart.com. 3. The factual aspect that the goods supplied by the Taxpayer to WS Retail are supplied to the customers placing orders in the Flipkart web portal at the price commanded by the Taxpayer was not placed before the Hon'ble ITAT by the Taxpayer. Hence the loss incurred in the form of supply of goods to WS Retail at less than the cost of purchase and sale of the same to Flipkart customers was only with an intention of acquiring the intangible asset in the form of goodwill/brand value and the same was correctly held as capital in nature by the AO. The findings of the Hon'ble tribunal contrary to the above was due to suppression of material fact in the form of an agreement by the Taxpayer. 4. This Hon'ble tribunal has recorded a finding that the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble tribunal be invited in view of the suppression of the above facts by the Taxpayer and also lack of sufficient opportunity to the revenue . 7. In short the contention of the revenue is that the entire conclusion of the Tribunal is based on the fact that M/S.WS retail Services Pvt. Ltd., to whom the products are sold by the Assessee after its purchase is based on the fact that the transaction between the Assessee and M/S.WS Retail Services Pvt.Ltd. was an uncontrolled transaction whereas the fact is that there was an agreement between Assessee and M/S.WS Retail Services Pvt.Ltd. and the terms of the said agreement provide that M/S.WS Retail Pvt.Ltd., shall sell the products sold by the Assessee to it only through the web portal Filpkart.com . Therefore the transaction between Assessee and M/S.WS Retail Services Pvt.Ltd., cannot be said to be an uncontrolled transaction. The further contention is that the Assessee failed to invite the attention of such agreement before the Tribunal. The further contention of the revenue is that because the transaction between the Assessee and M/S.WS Services Retail was not in the nature of uncontrolled transaction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction. It was also pointed out that a reading of Paragraph-2 and Paragraph 6 of the MA would show that the Agreements and document now sought to be filed before the Tribunal was neither the basis of assessment by the AO or the CIT(A). The allegation in the MA is that the Assessee ought to have pointed out the existence of these documents. It was also pointed out that even in the MA there is no inference drawn that these documents would show that the order of the Tribunal or the conclusions reached therein were erroneous. On the other hand, the allegation in the MA is that there is a possibility of some hidden transaction which requires to be examined by the Tribunal by lifting the corporate veil. How an MA could be filed on the basis of a possibility of some hidden transaction emanating by lifting the corporate veil. To these queries the learned DR could not given any reply but reiterated the stand of the revenue as contained in the MA. 10. The learned counsel for the Assessee on the other hand pointed out that there existed no brand or intellectual property (IPR) owned by the Assessee during the previous year relevant to AY 2014-15 which was the AY which was decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to review its own orders. Power of review is not an inherent power but must be conferred by law either specifically or by necessary implication. Courts have consistently held that review proceedings imply those proceedings where a party, as of right, can apply for reconsideration of the matter already decided upon after a fresh hearing on the merits of the controversy between the parties and that such a remedy is available only if provided by the statute. The law on powers of Tribunal is well settled and is governed by the ratio laid down by the Hon ble Supreme Court, on scope of powers u/s.154 of the Act, which is akin to Sec.254(2) of the Act, in ITO Vs Volkart Brothers [(1971) 82 ITR 50 (SC)], as follows: .. an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record 13. The present MA filed by the Revenue is devoid of any merit and is liable to be dismissed as without any basis and virtually seeking a review of the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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