TaxTMI 
TaxTMI 
2013 (1) TMI 647
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....CIT (A) erred in directing the AO to exclude US Branch sales from the total turnover as well as from the export turnover while computing the deduction u/s 10B of the Act. The Tribunal while deciding this issue gave a finding that it should be excluded from the export turnover as well as from the total turnover and the assessee is not entitled for benefit of section 10B on the branch sales and it is to be excluded both from export turnover as well as from total turnover. According to the learned AR, there is no necessity of physically bringing back actual receipts to India. The assessee has deposited the proceeds of foreign branch sales in a separate bank account with the approval of RBI which is in compliance of Explanation 2 to section 10A....
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....e Indian Principal Company and foreign customer, the branch sales may be considered as head office sales and hence can be considered as export sales. In support his contention, the learned AR has relied on the judgment of Delhi High Court in the case of CIT v. Interra Software India (P.) Ltd. [2011]. The learned AR relied on the order of the 3rd Member case in the case of Zylog Systems Ltd. v. ITO [2011] 128 ITD 105 wherein it held that AO is not justified in excluding a part of export proceeds retained by the assessee abroad in accordance with the RBI guidelines while computing the deduction u/s 10B of IT Act. In view of the above, the learned AR for the assessee prayed for recalling the order of the Tribunal in the instant case and rectif....
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....acts remain that the goods have not been physically exported out of India and therefore the important and necessary condition precedent for claiming deduction u/s 10B has not been satisfied. The judgment cited by the learned AR is with regard to incurring of expenditure in foreign currency on computer software development on site at client's place outside India and with regard to this, the Special Bench held that it should not be excluded from the export turnover for computing deduction u/s 10B of the Act. In the present case, we are dealing with branch sales outside India and not on site development expenditure outside India. Therefore, that judgment is not considered by us. Because the order is not in favour of the assessee, it cannot be ....
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....ed in the above background the order passed by the Tribunal is indefensible. 5. The words used in s. 254(2) are 'shall make such amendment, if the mistake is brought to its notice'. Clearly, if there is a mistake, then an amendment is required to be carried out in the original order to correct that particular mistake. The provision does not indicate that the Tribunal can recall the entire order and pass a fresh decision. That would amount to a review of the entire order and that is not permissible under the IT Act. The power to rectify a mistake under s. 254(2) cannot be used for recalling the entire order. No power of review has been given to the Tribunal under the IT Act. Thus, what it could not do directly could not be allowed to be don....