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Income Tax Appellate Tribunal - Hyderabad

Hbl Power Systems Limited, Hyderabad, ... vs Dcit, Circle-2(2), Hyderabad on 30 September, 2021

         IN THE INCOME TAX APPELLATE TRIBUNAL
          HYDERABAD BENCHES "A" : HYDERABAD
              (THROUGH VIDEO CONFERENCE)

       BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER
                         AND
     SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
                    M.A. No.45/HYD/2021
                 (Arising out of ITA No.189/Hyd/2017)
                  Assessment Year: 2012-13
     M/s.HBL Power Systems        Deputy Commissioner of
     Limited,                Vs Income Tax,
     HYDERABAD                    Circle-2(2),
     [PAN: AAACH8421K]            HYDERABAD
            (Appellant)                       (Respondent)
            For Assessee     : Shri P.V.S.S.Prasad, AR
            For Revenue      : Shri Y.V.S.T.Sai, CIT-DR
            Date of Hearing              :   27-08-2021
            Date of Pronouncement        :   30-09-2021

                            ORDER
PER S.S.GODARA, J.M. :

This assessee's instant Miscellaneous Application filed u/s.254(2) of the Income Tax Act, 1961 [in short, 'the Act'] seeks to recall/rectify the tribunal's order dated 23-04-2021 upholding the Assessing Officer's action making transfer pricing adjustment of interest @12% on trading receivables.

Heard both the parties. Case file perused.

2. We notice at the outset with the able assistance of both the parties that the tribunal's foregoing order had relied upon the assessee's alleged letter dt.23-11-2016 filed before the Assessing Officer in furtherance to DRP's directions dt.31-10- 2016 regarding computation of interest.

3. Learned CIT-DR fails to dispute that the said letter had been filed "without prejudice to our right of appeal". Meaning :- 2 -:

thereby that the assessee had never closed its option of challenging the impugned adjustment on all factual as well as legal aspects. We thus hold that it is a fit instance wherein our order affirming the impugned adjustment based on the said letter and without taking into consideration the assessee's conditional submission, suffers from an apparent error which deserves to be recalled. We accordingly recall our order dt.23- 04-2021 passed in the assessee's appeal ITA No.189/Hyd/2017.

This M.A.No.45/Hyd/2021 is accepted.

4. We now revert again to the assessee's foregoing sole substantive grievance and notice that the TPO's order dt.30- 01-2016 had taken the assessee's AE as comparables than independent parties in the very segment. Case law Addl.CIT Vs. Technimont ICB India (P) Ltd. [138 ITD 23] (ITAT, Bom) (TM) holds that an assessee's AE itself could not be taken as a comparable since not involving un-controlled transactions. We apply the very ratio herein to delete the impugned adjustment pertaining to interest on receivables of Rs.1,69,22,957/-. The assessee succeeds in its sole substantive ground as well as the main appeal ITA No.189/Hyd/2017.

5. The assessee's M.A.No.45/Hyd/2021 as well as ITA No.189/Hyd/2017 are allowed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 30 t h September, 2021 Sd/- Sd/-

(LAXMI PRASAD SAHU)                               (S.S.GODARA)
ACCOUNTANT MEMBER                               JUDICIAL MEMBER
Hyderabad, Dated: 30-09-2021
TNMM
                              :- 3 -:
                                                  MA No. 45/Hyd/2021




Copy to :

1.M/s.HBL Power Systems Limited, C/o.Prasad & Prasad Chartered Accountants, Flat No.301, MJ Towers, 8-2-698, Road No.12, Banjara Hills, Hyderabad.

2.The Deputy Commissioner of Income Tax, Circle-2(2), Hyderabad.

3. Dispute Resolution Panel (DRP), Bengaluru.

4. Director of Income Tax (IT & TP), Hyderabad.

5.Addl. Commissioner of Income Tax (Transfer Pricing), Hyderabad.

6. D.R. ITAT, Hyderabad.

7. Guard File.