9911796707
TMI Blog2022 (1) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... . 35 to 38 of the Revenue's appeal: 2.1. We wish to respectfully submit that the Ground Nos. 35 to 38 of the Revenue's appeal have been adjudicated together in the Appellate order in Para 155. However, the mention of Ground No. 38 in Para 66 on Page 38 of the order has inadvertently been omitted. Prayer 1: It is therefore, prayed that for the sake of clarity Para 66 on Page 38 of ITAT order be modified to include Ground No 38 of the Revenue's appeal. 2.2. We wish to further respectfully submit that the Ground Nos. 35 and 36 of the Revenue's appeal are in connection with comparables, i.e. exclusion of Allsec Technologies and inclusion of Axis Integrated Systems Limited, respectively. 2.3. Your Honours have dismissed all 4 grounds of appeal (i.e. ground of appeal no 35 to 38) of the revenue together vide para 155 of the order, however there are certain factual discrepancies which may kindly be rectified as under: a. As regards Ground No 35, on the comparable Allsec Technologies Ltd, it is humbly submitted that the Learned Commissioner of Income-tax (Appeals) ["the CIT(A)"] has included Allsec Technologies as valid comparable and Revenue's ground is for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is therefore, prayed that for the sake of clarity, a clear finding may be given in para 155 of the ITAT order that the revenues appeal in Ground Nos. 37 and Ground No. 38 has been rejected and order of the Learned CIT(A) deciding M/s. Empire Industries Limited as a valid comparable and rejecting M/s, BVG India Limited as a comparable, is upheld. 3. Further, the ld. Counsel of the assessee has made further submissions in this regard as under:- 1. The Department had challenged the first appellate order in their appeal, bearing ITA No. 136/Mum/2018. In relation to the validity of the several comparables, while benchmarking Business Support Services and Management Support Services availed and given by the Assessee. The Department had raised following grounds on validity of four comparables: i. Ground No. 35, objecting to the inclusion of comparable "Allsec Technologies Ltd." ii. Ground No. 36, objecting the exclusion of "Axis Integrated Systems Ltd.", iii. Ground No. 37, challenging inclusion of comparable "Empire Industries"; and iv. Ground No. 38,- objecting exclusion of comparable "BVG India Limited". 2. On the other hand, the Assessee had raised ground No. 9 in its app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , have been considered while adjudicating the issue of selection of correct comparables, in the first 6 lines of the Para 155 of the ITAT order. Hence, it is also clear that Ground No. 37 and 38 of the Department's appeal is also dealt with in Para 155 of the ITAT order and has also been dismissed. 11. Even so, the Department, while giving effect to the ITAT order, is reluctant to accept the same and is interpreting that the decision in relation to ground no. 35 to 38 has not been taken by the Hon'ble Bench. 12. In view of the aforesaid difficulty, the Applicant Assessee is requesting the Hon'ble Bench to: a) include Ground No. 38 in para 66 of the order to clarify that the Ground No. 38 is also dealt with the ground no. 9 of the Assessee's Appeal; and/or b) expressly mention the ground numbers 35 to 38 while dismissing the revenue's grounds on Pg. 103 in Para 155 of the ITAT order; and c) record in para 155 of the ITAT order that the inclusion of the comparable "Allsec Technologies" and exclusion of the comparable "Axis Integrated Systems Ltd." is covered by the ITAT order for AY 2012-13; and d) remove the lines "As regards, Allsec Technologies the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly Asian Business Exhibition & Conference Limited. 5. The ITAT has dealt with the issues as under:- Para 66. The Revenue's ground No. 35,36 & 37 are related to ground No. 9 in assessee's appeal. We are dealing with these grounds in ground No. 9 of the assessee dealt with in assessee's appeal. Para 145 to 156 Ground No. 9 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(A) erred in determining the arm's length mark-up of 8.20% on the cost of the services without considering the mark-up of 5.90% as determined by the Appellant and proposing the transfer pricing adjustment of INR 3,40,64,984; ; 9.2 The learned CIT(A) erred in rejecting the comparable companies namely Cameo Corporate Services Limited, Neilsoft Limited and Goldmine Advertising Limited without providing any cogent reasons. 9.3 On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the action of the learned AO in cherry picking the comparable company namely Asian Business Exhibition & Conference Limited. 146. Brief facts of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a rectification application with the TPO, requesting to rectify the margin of the alleged comparable company M/s. BVG India Limited from 24.08% to 22.49% (correct margin). The TPO recomputed the margin and revised it to 23.47%, accordingly the arm's length margin was revised to 17.78% restricting the alleged adjustment to INR 13,60,47,029/-. 150. Upon the assessee's appeal, the learned CIT(A) gave part relief by retaining some of the comparables. He held as under :- "I have carefully perused the order of the TPO and the submissions made by the Appellant during the course of the Appellate proceedings and the findings are tabulated as under: As regards Cameo Corporate Services Ltd, Neilsoft Limited and Goldmine Advertising Limited the same are not discussed in TPOs order hence not considered. 'Considering the above the arm's length price is as follows: 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 ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned CIT(appeals) has duly appreciated the submissions and found the voracity thereof. The revenue has not produced any cogent submission rebutting the finding of the learned CIT(appeals). As regards Alsec Technologies the revenue's ground is misplaced as TPO himself has excluded it from final comparable. Moreover, as pointed out by learned Counsel of the assessee that the ITAT in assessee's own case for A.Y. 2012-13 has held that this is not a valid comparable to assessee. Hence the grounds raised by the revenue in this regard are dismissed. 156. As regards assessee's plea of inclusion of cameo corporate services, neilsoft ltd and goldmine advertising Ltd, we find 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). On scrutiny of the said order, the Applicant observes that there is following apparent mistake rectifiable u/s. 254{2) of the Act. [Copy of ITAT order is attached herewith as Annexure 'A'] 2. As regard Additional Ground of Appeal No. 6 of Assessee's Appeal: 2.1. The Applicant Assessee had filed this ground of appeal, vide its letter dated 29.03.2019, for claiming long term capital loss on sale of equity and certain preference shares to its subsidiary company which was inadvertently not claimed in the return of income. [Copy of the letter is attached herewith as Annexure 'B'], However, the said ground has not been adjudicated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purely legal in nature and all the facts are on record. Considering that the Appellate authorities have jurisdiction to entertain claim which were not made before lower authorities or in return of income and relying on the Hon'ble Supreme Court judgement in the case of National Thermal Power Company Ltd (229 ITR 383). we request your Honour to kindly grant leave for admission of 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
