Karnataka High Court
Principal Commissioner vs M/S Maxim Ndia Integrated Circuit ... on 24 September, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
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NC: 2024:KHC:39701-DB
ITA No. 48 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF SEPTEMBER, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
INCOME TAX APPEAL NO. 48 OF 2021
BETWEEN:
1. PRINCIPAL COMMISSIONER
OF INCOME TAX-4,
BMTC COMPLEX,
KORAMANGALA, BENGALURU
2. DEPUTY COMMISSIONER OF INCOME TAX
CIRCLE - 12(1)
BMTC COMPLEX, KORAMANGALA,
BENGALURU
...APPELLANTS
(BY SRI.SANMATHI.E.I., ADVOCATE)
Digitally signed
by AND:
MARIGANGAIAH
PREMAKUMARI 1. M/S. MAXIM NDIA INTEGRATED CIRCUIT
Location: HIGH DESIGN PVT LTD.,
COURT OF 4TH FLOOR, TOWER 'B'
KARNATAKA
COMMERCIO @ MANTRI
SURVEY NO.51/2, 51/3,
DEVARABISANAHALLI, SURVEY NO.39/5,
KARIYAMMANA AGRAHARA VILLAGE,
VARTHUR HOBLI, BANGALORE-560103.
PAN AACCM 9437E
...RESPONDENT
(BY SRI.NARENDRA KUMAR JAYANTILAL JAIN., ADVOCATE)
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NC: 2024:KHC:39701-DB
ITA No. 48 of 2021
THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME
TAX ACT 1961, ARISING OUT OF ORDER DATED 05/07/2019
PASSED IN IT(TP)A NO.287/BANG/2014, FOR THE
ASSESSMENT YEAR 2009-2010, PRAYING TO DECIDE THE
FOREGOING QUESTION OF LAW AND / OR SUCH OTHER
QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE
COURT AS DEEMED FIT; SET ASIDE THE APPELLATE ORDER
DATED 05/07/2019 PASSED BY THE INCOME TAX APPELLATE
TRIBUNAL, B BENCH, BENGALURU, IN APPEAL PROCEEDINGS
NO.IT(TP)A NO.287/BANG/2014 (ANNEXURE-A) FOR THE
ASSESSMENT YEAR 2009-2010 AS SOUGHT FOR IN THIS
APPEAL.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT
and
HON'BLE MR JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.Narendra Kumar J. Jain for respondent/assessee.
2. The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, 'the Act') questioning the correctness and legality of order dated -3- NC: 2024:KHC:39701-DB ITA No. 48 of 2021 05.07.2019 passed by the Income Tax Appellate Tribunal, 'B' Bench, Bengaluru (for short, 'Appellate Authority') in IT(TP)A.No.287/Bang/2014 for the assessment year 2009-10.
3. This Court, admitted the appeal on 20.09.2021 to consider the following substantial questions of law:
"1) Whether on the facts and circumstances of the case and in law, the Tribunal is right in holding that Kals Information Systems Ltd and Bodhtree Consulting Ltd., cannot be taken as comparable holding that these companies are functionally dissimilar without considering the FAR analysis and evidence brought on record by Transfer Pricing Officer?
2) Whether on the facts and circumstances of the case and in law, the Tribunal is right in excluding/including certain comparable's chosen by Transfer Pricing Officer even though the comparable's chosen by said officer is in accordance with Rule 10B of the Act?
3) Whether on the facts and circumstances of the case and in law, the Tribunal is right in -4- NC: 2024:KHC:39701-DB ITA No. 48 of 2021 holding that, Infosys Technologies Limited, L&T Infortech Limited, Mindtree Limited (Seg.), Persistent Systems Ltd., R.S. Software Ltd., Sasken Communications Ltd., Tata Elxsi Ltd (Seg) and Zylog Systems Ltd cannot be taken as comparable holding that the size and turnover of the company are deciding factors for treating a company as a comparable?
4) Whether on the facts and circumstances of the case and in law, the Tribunal is right in setting aside the issue of the claim of the assessee for deduction under section 10A of the Act and restoring back the file to assessing officer for verification ignoring the fact that the assessee had not claimed such deduction under section 10A in original return of income and also no revised return was filed and when position of law being amply clear in this regard as laid down in the Hon'ble Apex Court judgment delivered in the case of Goetze (India) Ltd?
5) Whether on the facts and circumstances of the case and in law, the Tribunal is right in holding that the ECB loan used for purchase of land were utilized for continuation / expansion of the existing business and not for extension of business, hence disallowance of interest paid on the ECB loan under section 36(1)(iii) is deleted without -5- NC: 2024:KHC:39701-DB ITA No. 48 of 2021 appreciating that the word expansion is no different from extension of business and hence in this case, the interest disallowance is sustainable?
6) Whether on the facts and circumstances of the case and in law, the Tribunal is right in holding that the Computers are plant and machinery and thus eligible for additional depreciation without appreciating that there is a separate block of 60% depreciation for Computers and Computer Software as prescribed under the rules hence additional depreciation of 20% would not apply to computers as it does not fall under Plant and Machinery?"
4. Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.
5. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the -6- NC: 2024:KHC:39701-DB ITA No. 48 of 2021 appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.
6. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding.
Sd/-
(S.G.PANDIT) JUDGE Sd/-
(C.M. POONACHA) JUDGE MPK List No.: 2 Sl No.: 15