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Income Tax Appellate Tribunal, BANGALORE BENCHES “ A ” BENCH: BANGALORE
Before: SHRI A.K. GARODIA & SHRI PAVAN KUMAR GADALE
O R D E R
PER SHRI PAVAN KUMAR GADALE, JM :
The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals)-5, Bangalore passed under Section 143(3) r.w.s. 144C(3) and 250 of the Income Tax Act, 1961 ('the Act').
2 IT(TP)A No.1041/Bang/2018 2. The assessee has raised the following grounds of appeal :
The Brief facts of the case are that the assessee company provides services to the group companies which include providing assistance in customization and implementation of software. Further registered under STPI Scheme and filed the Return of Income for the Assessment Year 2008-09 on 29.09.2008 with total income of Rs.87,81,038. Subsequently, the case was selected for scrutiny and Notice under Section 143(2) of the Act was issued. In compliance, the learned
3 IT(TP)A No.1041/Bang/2018 Authorized Representative of the assessee appeared from time to time and submitted the details. The Assessing Officer found that assessee has international transactions exceeding the limit, and with the prior approval of CIT referred to the Transfer Pricing Officer for determination of Arm’s Length Price (ALP). Whereas the TPO has rejected the documentation maintained by the assessee and selected comparables and granted Working Capital Adjustment and worked out the transfer Pricing Adjustment of Rs.320,581,011 in software services and passed the order under Section 92CA of the Act dt.31.10.2011. Subsequently, Draft assessment order was passed in December, 2011 with Transfer Pricing Adjustment. Whereas The assessee has filed a letter requesting the Assessing Officer for issue of final assessment order to file the appeal before the CIT(Appeals). The Assessing Officer has passed final assessment order on 9.2.2012 with Transfer Pricing Adjustments under Section 92CA of Rs.320,581,011 and disallowance under Section 40a(ia) of the Act of Rs.364,157. Aggrieved by the order, the assessee has filed an appeal with the CIT(Appeals). Whereas the CIT(Appeals) considering the submissions on the MAP proceedings of mark up has observed at paras 5.1 and 5.2 as under :
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Finally, the CIT(Appeals) has partly allowed the appeal. Aggrieved by the CIT(Appeals) order, the assessee has filed an appeal with the Tribunal.
At the time of hearing, the learned Authorized Representative submitted that the same percentage has to be applied for non-map entities and there is no finding of the lower authorities on this issue. The learned Authorized Representative relied on catena of judgments, and further emphasized that the CIT(Appeals) has not adjudicated on non-MAP activities and prayed for allowing the appeal. Contra, the learned Departmental Representative supported the order of CIT(Appeals) and relied on the order of coordinate bench decision in the case of DCIT Vs. Global e-Business Operations Ltd in IT (TP) A no208&318 (Bang) 2014 dt.16.08.2017.
We heard the rival contentions and perused the material on record. Prima facie, the contention of the learned Authorized Representative that there is no 5 IT(TP)A No.1041/Bang/2018 finding by the CIT(Appeals) and non-adjudication of Map percentage on other entities. We find the co-ordinate bench of the Tribunal in the case of DCIT Vs. Global e-Business (supra) has dealt on the margin accepted in the Map and non- Map transactions at page 10 para 6.5.5 which is read as under:
6 IT(TP)A No.1041/Bang/2018 We found that the facts of the present case are similar to the decision dealt by the tribunal, and fallow the judicial precedence. Accordingly, we restore the disputed issue to the file of CIT(Appeals) for fresh adjudication and findings on the margin adopted for UK transactions and non-UK transactions and pass a speaking order, and the assessee should be allowed adequate opportunity of hearing and shall cooperate in early disposal of appeal and allow the grounds of appeal of assessee for statistical purposes.
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In the result, the assessee appeal is allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page.