TMI Blog2014 (1) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... al has taken a conscious view on the consideration of all the relevant factors – Decided partly in favour of Assessee. - Miscellaneous Application No. 194/Hyd/2011 in ITA No. 1082 & 1084/Hyd/2010 - - - Dated:- 8-4-2013 - SHRI CHANDRA POOJARI AND SAKTIJIT DEY, JJ. For the Appellant: Shri A.V. Sonde For the Respondent: Shri M.Ravindra Sai DR Order Saktijit Dey (Judicial Member).- By this application under section 254(2) of the Income-tax Act, 1961, the applicant-assessee seeks rectification/recall of the order of this Tribunal dated July 22, 2011 in the cross appeals-being I. T. A. No. 1082/Hyd/2010 of the Revenue and 1084/Hyd/ 2010 of the assessee-for the assessment year 2004-05, on the ground that certain mistakes apparent from record have crept into the same. 2. Learned counsel for the assessee-applicant, reiterating the detailed averments made in the present application has submitted that order of the Tribunal suffers from non-consideration of several contentions of the parties urged and the decisions relied upon by the parties, during the appeal hearing, besides other mistakes apparent from record. He, however, at the outset, submitted that he is not pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to. In the absence of any contrary decision cited by the learned Departmental representative, it was submitted that the order of the Tribunal in not referring to any of these decisions and rejecting the grounds by the assessee, constitutes a mistake apparent from the record, as these precedents were binding on the Tribunal. 4. The authorised representative also referred to ground No. 4.3 raised in the appeal regarding adjustment to the margin of the comparable companies on account of difference in the risk profile of the comparable companies, and it was disposed of by the Tribunal in para 40 of its order in the following manner : "it cannot be said that the assessee-company was operating in a risk free environment and accordingly the assessee-company is not entitled to any adjustment towards risks borne on various comparable companies." It is submitted that the Tribunal, having held that the assessee works in an environment having risk, failed to quantify the amount of risk. This, according to the authorised representative is clearly contrary to the express provisions contained in rule 10B(2)(b) which require adjustments to be made for "risks assumed". This, acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the contention of the learned authorised representative for the assessee that while dismissing the assessee's contention, the Tribunal has completely ignored the decision of the Income-tax Appellate Tribunal, Special Bench, Chandigarh in the case of Quark Systems P. Ltd. [2010] 4 ITR (Trib) 606 (Chandigarh), while holding that the contention which was not raised before the Commissioner of Income-tax (Appeals) and the Transfer Pricing Officer cannot be raised for the first time before the Tribunal. In Quark Systems, the Special Bench of the Tribunal has observed in the following manner: "30. Learned special counsel for the Revenue Shri Kapila has vehemently argued that 'Datamatics' was taken as one of the comparables by the taxpayer and no-objection to its inclusion was raised before the Transfer Pricing Officer or before the learned Commissioner of Income-tax (Appeals) in appeal. Therefore, the taxpayer should not be permitted to raise additional ground and ask for exclusion of the above enterprise in the determination of the average margins. We are unable to accept the above contention. In the first place, these are initial years of implementation of the transfer pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o require us to consider whether or not Datamatics should be included in the comparable, we make no comments on the merits except observing that the assessee from record has shown its prima facie case. Further claim may be examined by the Assessing Officer. This course we adopt as objection to the inclusion of Datamatics as comparable has been raised now and not before the Revenue authorities." 8. Similar arguments were taken even with regard to the second issue, viz., Visual Soft Technologies Ltd. being taken as comparable. On perusal of the order dated July 22, 2011, as reported in (Deloitte Consulting India P. Ltd. v. Deputy CIT [2012] 15 ITR (Trib) 573 (Hyd)) of the Tribunal it is seen that though the Tribunal while dealing with contention of the learned authorised representative for the assessee, had recorded the fact that the counsel has relied upon the order of the Special Bench in the case of Quark Systems P. Ltd. [2010] 4 ITR (Trib) 606 (Chandigarh). While giving the finding, however, the Tribunal has not made any mention about the applicability or otherwise of the said decision to the facts of the case. So far as the issue of depreciation is concerned, the Tribunal has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts Ltd. v. CIT [2007] 295 ITR 466 (SC), the hon'ble Supreme Court has held that failure to consider a decision of a co-ordinate Bench cited by the assessee is a mistake apparent from record. In this view of the matter, in so far as the first two issues are concerned, we find that there is a mistake apparent from record in the order of the Tribunal dated July 22, 2011 on account of non-consideration of the decision of the Special Bench in the case of Quark Systems. Consequently, the order of the Tribunal dated July 22, 2011 in relation to these two issues is modified, and it is held that since contentions in relation to these two issues are raised by the assessee for the first time before this Tribunal, and as such the Revenue authorities did not have an opportunity to examine the same, hence, they are remitted to the file of the Assessing Officer, for reconsideration of the entire matter in relation to these two issues. He shall pass appropriate orders in accordance with law, after giving a reasonable opportunity of hearing to the assessee. We would like to make it clear that we are not expressing any opinion on the merits of the issues involved, and the Assessing Officer is at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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