DCIT 10 (2)(1), MUMBAI vs. J.P.MORGAN SERVICES (I) PVT. LTD., MUMBAI

At the very outset, Shri Porus Kaka, the learned Senior Counsel for the assessee and Shri Anand Mohan, the learned Departmental Representative fairly submitted that all the issues raised in the Revenue’s appeals are covered by a number of decisions of not only the Tribunal but also by the judgments of the Hon'ble Jurisdictional High Court and the Hon'ble Supreme Court as well. In view of the aforesaid submissions of the learned Counsels appearing for the parties, we proceed to dispose of the appeals as under:–

The first issue raised by the Revenue in its appeal being ITA no. 677/Mum./2019, and the only issue raised in appeals being ITA no. 678/Mum./2019 and ITA no.679/Mum./2019, is on the applicability of the Mutual Agreement Procedure (MAP) resolution to non–United States of America (US) transactions.

Brief facts relevant for disposal of this issue are, the assessee is a resident company and engaged in the business of development of software and rendering Information Technology Enabled Services (ITES). As stated by the Assessing Officer, the assessee has three units at Mumbai, Bangalore and Hyderabad. All these units have been set–up in Software Technology Park of India (STPI) and are eligible for deduction of 10A of the Income Tax Act, 1961. During the year under consideration, the assessee had entered into certain international

Before the first appellate authority, the assessee pleaded that though the MAP resolution was arrived at in respect of transaction with the AE in USA, however, the same would also be applicable to transactions entered with non–US AEs. The first appellate authority having found that the aforesaid pleading of the assessee was accepted

Having considered rival submissions, we find that while considering identical claim of the assessee in assessment year 2006– 07 and 2007–08 in ITA no.8987/Mum./2010 and ITA no.7822/Mum./2011 dated 30th November 2015, the Tribunal having found that the material fact on the basis of which the MAP resolution was arrived at in respect of transactions with US AEs are identical to the facts relating to international transactions with non–US AEs, concluded that the result of MAP proceedings in case of US transactions would also apply to non–US international transactions. The same view was expressed by the Tribunal in assessee’s own case in assessment year 2008–09 vide ITA no.477/Mum./2013, dated 25th May 2016. Again the Tribunal reiterated identical view while disposing of appeals in assessee’s own case in assessment year 2009–10 vide ITA no.784/Mum./2014 dated 31st January 2017, and for the assessment year 2010–11, in ITA no.998/Mum./2015 and ITA

The only other issue which survives is ground no.3, raised by the Revenue in its appeal being ITA no. 677/Mum./2019 and the issue is,

It is noticed that during the year under consideration, the assessee has earned certain interest income from fixed deposits which was treated as part of profit of STPI unit for claiming deduction under section 10A of the Act. This claim of the assessee was rejected by the Assessing Officer. However, learned Commissioner (Appeals) having found that the issue has been decided in favour of the assessee by the Tribunal, allowed assessee’s claim.

As fairly submitted before us by the learned Counsels for the parties, this issue has been decided in favour of the assessee right from the assessment year 2004–05 till Assessment Year 2010–11. It is also observed that the decision of the Tribunal in assessment years 2005–06, 2006–07, 2007–08 and 2008–09 has been upheld by the Hon'ble Jurisdictional High Court. This being the admitted factual position, we do not find any reason to interfere with the decision of learned Commissioner (Appeals). Accordingly, dismiss the grounds raised.

In the result, appeals are dismissed. Order pronounced in the open Court on 22.04.2021