TMI Blog2019 (4) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the assessee and re-fix the appeal of the assessee in order to adjudicate afresh. MA filed by the assessee is allowed. - M.A. No. 95/Hyd/2018 (in ITA No. 488/Hyd/2017 - - - Dated:- 18-4-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Shri Percy Pardiwala For the Revenue : Shri Y.V.S.T. Sai ORDER PER S. RIFAUR RAHMAN, AM: This Miscellaneous Application is filed by the assessee u/s 254(2) of the Income Tax Act seeking rectification/modification of the order of the Tribunal dated 05/07/2018 in ITA No. 488/Hyd/2017. 2. In the MA, the assessee stated as under: 5. In the order passed by the Hon'ble Members, the Appellant would like to bring to the notice of the Hon'ble Members that certain facts were not appreciated correctly and/ or not considered (as listed below) and which may have had a bearing on the final judgment/ conclusion: (i) In para 6.14 of the order passed, the Hon'ble IT AT has held that the Appellant's main object is to carry on the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factually incorrect basis that borrowed funds were utilized to make investments in level - 2 company which is not so as the borrowing by the Appellant company was used to onward lend to level 2 company without charging interest with immediate effect but with the condition that interest would be charged upon happening of certain event as provided in point (ii) above. (iv) In para 6.19 of the order passed, the Hon'ble IT AT has held that the director can be appointed in any company based on their qualification or association but not because of business connection. In this regard, the Appellant wishes to point out that the directors appointed by the Appellant on board of the level - 3 company are representing the Appellant and such directors were appointed based on the rights governed by shareholders agreement. Such director were appointed to protect the interest of the shareholder, oversee business operations, take strategic decision etc. and are key managerial personnel and not an independent director who are appointed based on their qualification, experience etc. (v) In para 6.20 of the order passed, the Hon'ble ITAT has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The assessee has filed the above MA on the order of Hon'ble ITAT in ITA No. 488/Hyd/2017 passed on 05/07/2018. The appellant is raising issues related to the observations of the Hon'ble at paragraphs 6.14,6.16 and 6.18 to 6.20 of the order. At the outset, it is humbly submitted that the issues raised by the assessee are not in the rectification of defect but in the nature of review of the order of Hon'ble ITAT, which is not permissible under the law. 2. It is humbly submitted that at paragraph 6.13 of the order, Hon'ble ITAT clearly mentioned the objects of the assessee and at paragraph 6.14, it was observed that the assessee is carrying out activity only with reference to object 2 and no activity is conducted with respect to object 1. This observation is factually correct as on the date of the order. Now, through the MA, the assessee is trying to create a hypothetical situation that because object 1 is mentioned in the MoA, the assessee should be treated as carried out the said activity, which is contrary to the facts. The Hon'ble ITAT never stated that the assessee is prevented in carrying out object 1. Hon'ble ITAT state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the issue raised by the assessee is highly debatable and it is not a simple mistake apparent from record. 5. At paragraph 6.19 of the order, Hon'ble ITAT rejected the argument of business connection which was demanded on the basis that directors of the assessee are also directors of SPVs. In the present MA, the assessee states that directors of Level - 3 companies are appointed on the basis of shareholding rights of the assessee in the said companies. As per the assessee, this is to protect the rights of the shareholders, oversee the business operations and take strategic decisions. It is submitted that even if the directors of the assessee are nominee directors on the Boards of Level - 3 companies on the basis of shareholding rights, as both the entities are different legal entities, the business of the assessee and that of a Level - 3 company cannot be termed as the same. This is a farfetched argument, more so when the investment is through Level-2 companies. It is humbly submitted that this is also a highly debatable issue which needs detailed verification and not a mistake apparent from record. 6. At paragraph 6.20, the Hon'ble IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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