2014 (4) TMI 814 - ITAT MUMBAI

Rectification of order – Error apparent on the record u/s 254 of the Act - Disallowance of deduction u/s 10A of the Act - Held that:- Relying upon The Commissioner of Income Tax-2. Versus Western Outdoor Interactive Pvt. Ltd. [2012 (8) TMI 709 - BOMBAY HIGH COURT] - In case there is no change in the facts and circumstances subsequent to the first year, which could have rendered the assessee ineligible for deduction under section 10A, the claim of the assessee cannot be denied in the subsequent assessment year when the same is accepted in the first assessment year – the direction for remitting back the case to the AO will not affect the claim of the assessee if there is no change in the facts and circumstances - the assessee has not made out a case of apparent error which can be rectified u/s 254(2) of the Income tax Act – Decided against Assessee.

Transfer pricing adjustment – Selection of comparables – Held that:- The issue has been remanded to the record of AO/TPO to consider the segmental results - If the assessee has any doubt about the reliability of the data/details, then it would have been raised before the TPO/AO - the issue has been remanded for considering the segmental results and related party transactions in ITES segment, then there was no substance in the submission of the assessee – Decided against Assessee.

Comparability of Infosys and Wipro – High turnover – Held that:- The finding has been given on examination and analysis of the facts and the assessee has not pointed out in the miscellaneous application any factual mistake in the facts which are considered by the Tribunal while giving the finding – Relying upon H.A. Shah & Co. v. CIT [1955 (9) TMI 53 - BOMBAY HIGH COURT] - if while deciding a case the First Tribunal did not have a particular material before it and if the second Tribunal is satisfied that if those material facts have been taken into consideration the decision of first Tribunal would have been different, it would justify the second Tribunal in not adhering to the decision of the first Tribunal – thus, when the issue has been decided after considering certain vital facts which were not before the Co-ordinate Benches relied upon by assessee then taking a different view on the basis of new facts would not amount to taking a divergent view of the matter on same facts, material and aspects already considered - nothing has been brought on record by the assessee to show how the brand value has an influence on the margins in the case of the comparables - no quantitative details of the adjustment if any on account of brand value are given – Decided against Assessee.

Comparability of Maple-Esolution Ltd. – Allegation of fraud against the director - Held that:- It is clear from the finding of the Tribunal that the objection was found not relevant for the business of the companies and for the year – Decided against Assessee.

Comparability of Eclerx Services Ltd – Held that:- Once the issue has been decided by the Tribunal by holding that the company providing data processing and data analysis service is similar to the services of the assessee then it becomes irrelevant whether the assessee has raised the objection before the authorities below or not – Decided against Assessee.

Comparability of Mold Tex Technologies Ltd – Tolerance range of related party transaction - Held that:- It is clear from the finding of the Tribunal that the tolerance range of 15% was taken in the case of assessee by considering the various decisions of the Tribunal wherein this range has been considered from 0-25% - The assessee's grievance is against reasoning and view of the Tribunal and not against any error or mistake apparent on record – Decided against Assessee.

Justification of carrying out fresh search by the TPO – Held that:- The Tribunal has not taken any divergent view from the views in the other cases - when the TPO itself did not choose to carry out further search then issue of justification of TPO did not arise before the Tribunal – thus, there was no substance in the arguments of the assessee – Decided against Assessee.

The scope of section 254(2) is very limited and circumscribed - For exercising jurisdiction u/s 254(2) it is mandatory condition that such mistake should be vide apparent manifest, and patent on record and not something which involve serious circumstances of disputes of question of fact or law - Section 254(2) does not confer power on the Tribunal to review its earlier order - the Tribunal has no power to review its order passed on merits and in the garb of rectification of mistake no order can be passed u/s 254(2) which amounts to reversal of order passed after discussing all facts and statutory provisions in detail – Decided against Assessee.