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TMI Blog2022 (1) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... that the mistake apparent from the record has crept in the order of this Tribunal inasmuch as the aforesaid additional ground was not adjudicated by the Tribunal. Hence, there is a mistake apparent from the record. However in an MA, the ground on merits cannot be adjudicated Hence, the order can only be recalled for the limited purpose of adjudicating this additional ground which had remained unadjudicated. Ld. DR has no objection with regard to this miscellaneous application inasmuch as, the recall will be only to adjudicate the issue which had by mistake remained unadjudciated. Accordingly, we recall the aforesaid order for limited purpose of adjudication of the aforesaid additional ground, which has remained to be adjudicated. - Shri Shamim Yahya, AM And Shri Amarjit Singh, JM For the Appellant : Shri Madhur Agarwal For the Respondent : Shri Rajesh Mishra ORDER PER SHAMIM YAHYA, A. M.: These are miscellaneous applications filed by the assessee with respective orders of the ITAT in ITA Nos. 136/Mum/2018 and 7299/Mum/2017 vide order dated 10.11.2020. M.A.No.113/Mum/2021:- 2. In this miscellaneous application, assessee has made foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. However the explicit mention of the comparable Axis Intergated Systems Limited is missing and hence, para 155 of the order may be rectified appropriately. c. For both the above comparables, it is submitted that during the proceedings, the Revenue has not been able to controvert the findings of the Learned CIT(A) on these comparables. Further, both these grounds are decided in favour of the assessee by the order of Hon'ble Tribunal for AY 2012-13 in the assessee' s own case, wherein it is held that Allsec Technologies is a valid comparable and Axis Integrated Systems Limited is not a valid comparable to the Assessee. Prayer 2: It is therefore, prayed that for the sake of clarity, a clear finding may be given in para 155 of the ITAT order, that the Tribunal's order for AY 2012-13 is followed and order of CIT(A) deciding Allsec Technologies as a valid comparable and Axis Integrated Systems Limited as an invalid comparable, is upheld. 2.4. We wish to further respectfully submit that the Ground No. 37 of the Revenue's appeal is in connection with exclusion of M/s. Empire Industries Limited which was held as valid comparable by the Learned CIT(A) and Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . , in line no. 6 in Para 155 at Pg. 103 of the ITAT order, it has been recorded that As regards, Allsec Technologies the revenue's ground is misplaced as TPO himself has excluded it from final comparable. The Applicant Assessee submits that the said finding is factually incorrect as the revenue sought to exclude the said comparable which was selected by the Applicant Assessee and was accepted by the first appellate authority. 6. The Applicant Assessee had submitted that the Revenue's Ground No. 35 objecting to the inclusion of comparable Allsec Technologies Ltd. and Ground No. 36 objecting the exclusion of Axis Integrated Systems Ltd. , both, are covered in favour of the Assessee by the ITAT's order, in Assessee's own case, for AY 2012-13. 7. Hon'ble Bench, while referring to the ITAT order for AY 2012-13 in Para 155 on Pg. 103 of the ITAT order and while recording that the validity of the comparables has been decided by the Hon'ble ITAT in AY 2012-13, comparable Axis Integrated Systems Ltd. was missed out to be referred. 8. In the last line of Para 155 of the ITAT order, it has been recorded that the grounds raised by the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 35. On the facts and circumstances of the case and law, the Ld. CIT(A) has erred in including the comparable M/s Allsec Technologies Ltd. without appreciating the fact that company is loss making in earlier years as well as in subsequent year. 36. On the facts and circumstances of the case and law, the Ld. CIT(A) has erred in excluding the comparable M/s Axis Integrated Systems Limited without appreciating the fact that Business Support Services and Management Services are highly skill-based services and by no stretch of imagination BSS and MSS can be treated as low-end services. 37. On the facts and circumstances of the case ld. CIT(A) has erred in including comparable M/s. Empire Industries Ltd. without appreciating that comparable is functionally dissimilar. 38. On the facts and circumstances of the case and law, the Ld. CIT(A) has erred in excluding comparable M/s BVG India Ltd. without appreciating that comparable is functionally similar. Assessee appeal grounds:- 9. Availing of Business Support Services ('BSS') from RCITPL: 9.1 On the facts and in the circumstances of the case and in law, the learned AO erred in making and the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the external database the assessee has selected the following comparables: Sr. No. Company Name NCP (%) 1 Empire Industries 4.32 2 HGS Business Services Pvt. Ltd 15.33 3 ICRA Management Consulting Services Ltd. 2.10 4 Spectrum Business Solutions Ltd 1.82 Arithmetic Mean 5.90 The 5% margin earned by AE is within the tolerance range, hence it was contented that RIL Refinery SEZ is not making more than ordinary profits and the specified domestic transactions between RCITPL with RIL Refinery SEZ related to provision of Business Support Services were consistent with the arm's length standard from Indian transfer pricing regulations perspective. 148. The TPO rejected the search process conducted by the assessee and conducted a fresh search process t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.No Comparable company % 1 Empire Industries Ltd 4.32 2 Asian Business Exhibition Conferences Ltd 12.09 3 Arm s length price 8.20 151. Against this order assessee as well as Revenue both are in appeal. The revenues ground is that learned CIT appeals erred in including the comparable M/S Empire industries Ltd and another ground is that learned CIT appeals erred in excluding the comparable M/S BVG India Ltd. and M/s. Alsec Technologies. 152. The learned counsel of the assessee states that assessee is aggrieved by the non inclusion of following comparable : Cameo Corporate Services Ltd., Neilsoft Limited Goldmine Advertising Limited 153. In this regard, the learned counsel of the assessee relied upon several case laws. It is the further contention of the learned counsel of the assessee that Cameo Corporate Services Ltd. and Goldmine Advertising Limited, need to be considered for benchmarking purposes, as they are providing business support services and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that these companies were not selected by the assessee itself in the comparable analysis. Therefore there was no occasion for the Transfer Pricing officer discuss or to include them. The learned CIT(appeals) is therefore not wrong in holding that there is no discussion by assessing officer in this regard. However since the assessee is also objecting to the inclusion of the only other comparable that is Asian business exhibition and conference Ltd on account of substantial variation in employee cost, it will be in fitness of things these comparables are also considered by transfer pricing officer. As regards the objection to Asian business exhibition and conference Ltd. is concerned, the objection appears to be genuine. The huge variation in employee cost does point out the lack of comparability. However the AO may examine the factual aspect in this regard. Hence the issue stands remitted the file of Transfer Pricing officer. The TPO should consider the issue afresh in light of our observations as above. Needless to add assessee should be granted adequate opportunity of being heard. 6. From the above, it is clear that ITAT has duly adjudicated revenue s ground No.38, wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the ITAT order. 11. We have heard both the parties and perused the records. It is noted that assessee has pleaded that one issue raised in additional ground No.6 raised by the assessee has remained to be adjudicated by the Tribunal. Ld. Counsel of the assessee has further submitted following details. The Applicant submits that the said additional ground of appeal no. 6 (with its covering letter dated 29th March 2019) was handed over to the Hon'ble Bench during the course of first hearing of the captioned appeal on 01.04.2019. In this regard, the Applicant Assessee craves leave to file the Copy of letter dated 29.03.2019 along with copy of Additional Ground of Appeal filed which is subject matter of the Miscellaneous Petition for ready reference. Vide the said additional ground no. 6, the Assessee sought to claim Long Term Capital Loss on sale of equity and preference shares of M/s. Reliance Exploration and Production DMCC to Assessee's subsidiary, namely M/s. Reliance Industrial Investments and Holdings Ltd, totaling to Rs. 9,29,34,61,459/-. The Assessee did not claim the said loss in its return of income under an inadvertent belief that the said loss would be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the additional ground of appeal for adjudication by your Honour. 13. The said additional ground reads as under:- The learned Commissioner of income-tax - (Appeals-57) Mumbai, [hereinafter referred to as the CIT(A)] erred in not allowing long term capital loss arising on sale of equity and preference shares of M/s. Reliance Exploration and Production DMCC ('REP DMCC'}, to its subsidiary company M/s, Reliance Industrial Investments and Holdings Ltd {'RIIHL'), which was inadvertently not claimed in the Return of Income on erroneous understanding that the said transaction was not a 'transfer' under section 47(iv} of the Income Tax Act 1961 (Act)', though relevant conditions specified in section 47(iv) were not fulfilled. The appellant submits that the loss on sale of said shares was allowable under section 45 of the Act as the whole of share capital of its subsidiary company M/s. RIIHL was not held by the appellant and hence the sale of equity and preference shares was not covered by the exception under section 47(iv) of the Act. 14. Further, the assessee has filed following affidavit in support of the aforesaid claim:- I, Vimal Gala, so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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