Karnataka High Court
The Pr Commissioner Of Income Tax vs Adc India Communications Ltd on 30 September, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
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NC: 2024:KHC:41506-DB
ITA No. 494 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH 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. 494 OF 2022
BETWEEN:
1. THE PR COMMISSIONER OF INCOME TAX
5TH FLOOR BMTC BUILDING
80 FEET ROAD KORMANGALA
BENGALURU-560095.
2. THE ASST COMMISSIONER OF INCOME TAX
CIRCLE-1(1) (1) 2ND FLOOR
BMTC BUILDING 80 FEET ROAD
KORMANGALA
BENGALURU-560095.
...APPELLANTS
(BY SRI. DILIP M, ADVOCATE A/W
Digitally
SRI. RAVI RAJ Y V .,ADVOCATE)
signed by
BHARATHI S AND:
Location:
HIGH ADC INDIA COMMUNICATIONS LTD
COURT OF
KARNATAKA 485/8A AND 8B 14TH CROSS
4TH PHASE P B NO.8512
PEENYA INDUSTRIAL AREA
BENGALURU-560058
PAN-AAACK6553H
...RESPONDENT
(BY SRI. NIKHILESH RAO M.,ADVOCATE)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A
OF INCOME TAX ACT 1961, PRAYING TO
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED
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NC: 2024:KHC:41506-DB
ITA No. 494 of 2022
BY THE INCOME TAX APPELLATE TRIBUNAL, BENGLAURU IN IT(TP)A
NO. 79/BANG/2016 DATED 29/04/2022 FOR ASSESSMENT YEAR
2011-2012 ANNEXURE-D CONFIRMING THE ORDER OF THE DRP AND
CONFIRM THE ORDER PASSED BY THE ASST. COMMISSIONER OF
INCOME TAX, CIRCLE-1(1)(1), BENGALURU AND ETC.
THIS APPEAL, COMING ON FOR ADMISSION, 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 Dilip M along with learned counsel Sri Raviraj Y.V, for appellants/Revenue and learned counsel Sri Nikhilesh Rao, for the 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 29.04.2022 passed by the Income Tax Appellate Tribunal, 'C' Bench, Bengaluru (for short, 'Appellate Authority') in IT(TP)A.No.79/Bang/2016 for the assessment year 2011- 12, raising the following substantial questions of law:
-3-NC: 2024:KHC:41506-DB ITA No. 494 of 2022 "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law include/exclude comparable's namely, M/s. Dynalog (India) Ltd & M/s.
Spanco Limited on the ground that functional dissimilarity when the Transfer Pricing Officer had chosen comparables after satisfying required tests namely, qualitative and quantitative filers and considering their functions and as such the order passed by Tribunal is perverse in nature?
2. Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as Tribunal has directed the assessing authority to exclude comparable even when the TPO has chosen proper comparable by application of all required tests?
3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the assessing authority/transfer pricing officer to exclude comparables on basis of turnover even though the assessing authority/Transfer Pricing Officer had passed order in accordance with Rule 10B of the Rules and by applying RPM method as most appropriate method?
4. Whether on the facts and in the circumstances of the case, The Tribunal is right in law in directing the assessing authority to exclude comparable in list even when the TPO has chosen proper comparable by application of all required tests?
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5. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the assessing authority to exclude certain comparable in list even when the TPO has chosen proper comparable by application of all required tests?
6. Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in setting aside disallowance made under section 40(a)(ia) read with section 9(1)(vii) of the Act to an extent of `1,36,42,976 as assessee failed to deduct TDS on said payment which is towards fees on technical serves ignoring that conditions set out in said provisions were fully satisfied in case of assessee to make such disallowance?
7. Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in setting aside disallowance made under section 40A(7) of the Act on claim of contribution made to approved gratuity fund ignoring that conditions set out in said provisions were fully satisfied in case of assessee to make such allowance?"
3. 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 -5- NC: 2024:KHC:41506-DB ITA No. 494 of 2022 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.
4. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the 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.
5. 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 BS List No.: 4 Sl No.: 0