Income Tax Appellate Tribunal - Bangalore
M/S Tejas Networks Limited, Bengaluru vs The Deputy Commissioner Of Income Tax, ... on 7 October, 2020
M.P. No.79/Bang/2020
M/s. Tejas Networks Limited, Bangalore
IN THE INCOME TAX APPELLATE TRIBUNAL
"C''BENCH: BANGALORE
BEFORE SHRI B.R. BASKARAN, ACCOUNTANTMEMBER
AND
SMT BEENA PILLAI, JUDICIAL MEMBER
M.P. No.79/Bang/2020
(Arising out of IT(TP)A No.281/Bang/2014 &
IT(TP) No.237/Bang/2014)
AssessmentYear:2009-10
M/s. Tejas Networks Limited Deputy
Plot No.25, 5th Floor, J.P.Software Park Commissioner of
Electronic City, Phase-1 Income-tax
Hosur Road Vs. Circle 12(4)
Bengaluru-560 100 Bangalore
PAN NO : AABCT1670M
APPELLANT RESPONDENT
Appellant by : Shri K.R. Vasudevan, A.R.
Respondent by : Shri Priyadarshi Mishra, D.R.
Date of Hearing : 31.07.2020
Date of Pronouncement : 07.10.2020
ORDER
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
The assessee has filed this miscellaneous application submitting that there are mistakes apparent from record in the order dated 1.10.2019 passed in IT(TP)A No.237/Bang/2014 & IT(TP)A No.281/Bang/2014 relating to assessment year 2009-10.
2. The first mistake pointed out by the assessee relates to the transfer pricing adjustment made in respect of interest on loan advanced by the assessee. The Ld. DRP had directed the A.O. to M.P. No.79/Bang/2020 M/s. Tejas Networks Limited, Bangalore Page 2 of 6 compute interest at LIBOR rate + 500 basis point. The Tribunal directed the A.O. to determine 12 months LIBOR + 300 basis point.
3. It is the plea of the assessee that the assessee had sought for LIBOR rate + 150 basis point and hence the order passed by the ITAT in directing the A.O. to adopt 12 months LIBOR + 300 basis point is mistake apparent from record.
4. We heard the parties on this issue and perused the record. We notice that the Tribunal has taken a view on this issue i.e. as against the DRP's direction to adopt interest rate of LIBOR + 500 basis point, the Tribunal has directed the A.O. to adopt 12 months LIBOR + 300 basis point. Non-acceptance of the plea of the assessee does not amount to a mistake apparent from record. There should not be any dispute that the scope of power of rectification of mistake given to the Tribunal u/s 254(2) of the Act is limited and it is well settled proposition of law that the Tribunal is not entitled to review its order under the garb of rectification of mistake apparent from record. The decision taken by the Tribunal in respect of the rate of interest to be adopted is a conscious decision taken by the Tribunal. Since the Tribunal has taken a view on this matter, the same does not constitute mistake apparent from record within the meaning of sec. 254(2) of the Income-tax Act,1961 ['the Act' for short]. Accordingly, we reject this prayer of the assessee.
5. The next mistake pointed out by the assessee is that the Tribunal has not adjudicated ground No.3 relating to mistake in computing the TP adjustment after the directions given by Ld. DRP.
6. We notice that this issue has not been adjudicated by the Tribunal. However, we notice that ground no.3 is a without M.P. No.79/Bang/2020 M/s. Tejas Networks Limited, Bangalore Page 3 of 6 prejudice ground relating to transfer pricing adjustment pertaining to loans advanced to the AE. In ground no.3, the assessee is pointing out an arithmetic error committed by A.O./TPO while giving effect to the direction given by Ld DRP.
7. In fact, this ground does not require separate adjudication, since the Tribunal has already modified the directions given by Ld DRP. Hence the ground no.3 urged by the assessee shall become infructuous, while giving effect to the order passed by the Tribunal. Accordingly, the decision rendered by the Tribunal on ground no.2 urged by the assessee would take care of ground no.3 also. Accordingly, we reject this plea of the assessee.
8. The next mistake pointed out by the assessee relates to disallowance made u/s 35(2AB) of the Act. The Tribunal has adjudicated the same in paragraphs 10 to 12 of the order.
9. At the time of hearing of the appeals, it was submitted that the assessee had challenged the disallowance made by the A.O. u/s 35(2AB) of the Act by filing the writ petition before Hon'ble Karnataka High Court. It was submitted that the Hon'ble Karnataka High Court, vide its order passed in writ petition No.7004/2014, has quashed the assessment order to the extent of disallowance made u/s 35(2AB) of the Act. When these facts were brought to the notice of the ITAT, the Tribunal has restored this issue to the file of the A.O. with a direction to examine the issue afresh in the light of orders passed by Hon'ble Karnataka High Court.
10. It is the plea of the assessee that the Tribunal has committed an error in remanding the issue to the file of A.O. for fresh examination. According to the assessee, the Tribunal cannot remand the matter to the AO for fresh examination.
M.P. No.79/Bang/2020M/s. Tejas Networks Limited, Bangalore Page 4 of 6
11. We heard the parties on this issue and perused the record. As submitted by assessee during the course of hearing the appeal, the assessment order to the extent of disallowance made u/s 35(2AB) of the Act has been quashed by the Hon'ble Karnataka High Court, meaning thereby, the claim made by the assessee u/s 35(2AB) of the Act would require fresh examination at the end of the A.O. Accordingly, the Tribunal, after considering the facts relating to the issue, has restored the same to the file of the A.O for examining it afresh in the light of order passed by Hon'ble Karnataka High Court, i.e., the AO should take into account the observations made by the Hon'ble Karnataka High Court while examining the issue of deduction u/s 35(2AB) of the Act. Thus, we notice that the Tribunal has taken a conscious view on this matter. Hence we find that the plea made by the assessee by expressing that this issue cannot be restored to the file of AO for fresh examination sounds strange. In any case, we are of the view that such a plea cannot be made in the miscellaneous petition filed u/s 254(2) of the Act. Accordingly, we do not find any mistake apparent from record in respect of this issue as alleged by the assessee. Accordingly, we reject this plea of the assessee.
12. The next mistake pointed out by the assessee relates to disallowance of deduction claimed by the assessee u/s 35(1)(i) of the Act. It is the submission of the assessee that this issue has already been decided in favour of the assessee by the coordinate bench in its order passed for assessment year 2002-03, which has already been upheld by Hon'ble High Court and Hon'ble Supreme Court. It is further stated that the above said decision is being followed consistently in other years also. However, the Tribunal has restored the issue to the file of the assessing officer for examining it afresh in the light of orders passed by the Hon'ble Karnataka High Court and co-ordinate benches.
M.P. No.79/Bang/2020M/s. Tejas Networks Limited, Bangalore Page 5 of 6
13. It is the plea of the assessee that the Tribunal has committed a mistake apparent from record in remitting the issue to the file of the A.O.
14. We heard the parties on this issue and perused the record. We notice that the Tribunal has restored the issue relating to deduction u/s 35(1)(i) of the Act to the file of the A.O. for examining it afresh in the light of decision rendered by the coordinate bench in ITA No.1684/Bang/2012 relating to assessment year 2008-09, meaning thereby, the A.O. is required to follow the decision rendered by the coordinate bench (referred above), if there is parity of facts on this issue. Thus, we notice that the Tribunal has taken a view on this matter also and hence, we are of the view that the order passed by Tribunal on this issue also does not suffer from any mistake apparent from record. Accordingly, we reject this plea of the assessee.
15. In the result, the miscellaneous application filed by the assessee is dismissed.
Order pronounced in the open court on 7th Oct' 2020 Sd/- Sd/-
(Beena Pillai) (B.R. Baskaran) Judicial Member Accountant Member Bangalore, Dated 7th Oct, 2020. VG/SPS M.P. No.79/Bang/2020 M/s. Tejas Networks Limited, Bangalore Page 6 of 6 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.