THE PR. COMMISSIONER OF INCOME TAX, vs. M/S TEXAS INSTRUMENTS (INDIA) PVT. LTD.,

THE PR. COMMISSIONER OF INCOME TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560095.

THE JOINT COMMISSIONER OF INCOME TAX LTU, PRESENT ADDRESS DCIT, CIRCLE - 7 (1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560095. …APPELLANTS (BY SRI. DILIP M.,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE)

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 17.05.2022 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA No.1075/Bang/2019 for the assessment year 2012-13, raising the following substantial question of law:

Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in law in ignoring the parameters of analysis prescribed under Rule 10B, which are exhaustive and if so, whether it is legally permissible to bypass the same partially or by implication?

Whether on the facts and in the circumstances of the case, for the Ay.2010- 11, the Tribunal was right in law and in fact holding that M/s. Killick Agencies and Marketing Ltd. fails expo turnover filter. The relevant extract of Annual report reproduced below:

Earnings in Foreign Currency

Whether on the facts and in the circumstances of the case, the Tribunal was right in relying upon the decisions of coordinate benches in the cases of Electronics for Imaging India Pvt. Ltd. (supra) without appreciating the dissimilarities between the facts in case of the taxpayer and that of those relied upon.

Whether on the facts and in the circumstances of the case, the Tribunal is correct in fact and in law in seeking exact comparability, which searching for comparable companies of the assessee under TNMM whereas the requirement of law and international jurisprudence require seeking similar comparable companies?

Whether on the facts and in the circumstances of the case the Tribunal's order can be said as perverse in nature in law in directing that the operating margin decided in the Bilateral APA with USA for the US AE which was decided by the APA authorities after examining the FAR of the US AE, be applied to the Malaysian AE without

Whether on the facts and in the circumstances the Tribunal was right in relying upon the decisions of coordinate benches in the cases of Nokia India Ltd., (supra) without appreciating the dissimilarities between the facts in case of the taxpayer and that of those relied upon? 12. Whether on the facts and in the circumstances of the case, Whether the Tribunalwas correct in holding that M/s. I Media Corp Ltd., cannot be taken as comparables as the company has earned revenue from event management not from advertisements and there is an extraordinary event of amalgamation, whereas as annual report of the company for AY 2014-15, the company earns revenue from advertisement which is similar to the support services and since the activities of fellow subsidiary that has been merged with IMCL are also in the nature of routine support services only and a part of the overall services provided by the group and merger of two entities which are in the same line of business, will not impact the functional comparability of IMCL with the taxpayer? 13. Whether on the facts and in the facts and circumstances of the case, Whether the Tribunal was correct in holding that M/s. IRunway India Pvt. Ltd.cannot be taken as comparables as the company has failed RPT filter and the functions carried out by this company are not very clear from the notes to the financial statements without appreciating the fact that RPT revenue to sales ratio for this comparable works out to 3.7%(ie.Rs.282.97 lakhs/Rs.7655.85 lakhs) and seen from page 24 of the annual; report of the company, iRunway is a knowledge services company that provides technology analysis and research services to corporations, law firms and

Whether amount written-off by the assessee could be allowed as deduction under section 28 when written-off loss did not spring directly from business of the assessee company and was not incidental to it?

Whether the tribunal is right in law in treating the loss/expenditure as revenue in nature and thereby allowing deduction under section 28 r.w.s. 29 of the Act when the said expenditure was purely capital in nature?’’

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.

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

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 questions of law is kept open to be adjudicated in an appropriate proceeding.