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NC: 2024:KHC:40411-DB ITA No. 131 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH 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.131 OF 2020
BETWEEN:
THE PR. COMMISSIONER OF INCOME-TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095.
THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-2(4) (1), PRESENT ADDRESS DCIT, CIRCLE -2(1) (1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. …APPELLANTS
(BY SRI. SUSHAL TIWARI, ADVOCATE)
Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:40411-DB ITA No. 131 of 2020
AND:
24/7 CUSTOMER PVT. LTD., 2/1, 2/2, 2/3 AND 5/1, EMBASSY GOLF LINKS BUSINESS PARK, CHALLAGHATTA VILLAGE, VARTHUR HOBLI, OFF INTERMEDIATE RING ROAD,
BENGALURU-560 071 PAN AAACZ 1014A …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDERDATED20/09/2019 PASSED IN IT(TP)A NO.498/BANG/2015, FOR THE ASSESSMENT YEAR 2010-2011 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE.
THIS APPEAL, COMING ON FOR 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
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NC: 2024:KHC:40411-DB ITA No. 131 of 2020
ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)
Heard the learned counsel Sri. Sushal Tiwari for appellants/Revenue and learned counsel Smt.Tanmayee Rajkumar for respondent/assessee.
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 20.09.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.498/Bang/2015 for the assessment year 2010-11.
This
Court,
admitted the appeal on 29.09.2020 to consider the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to apply Turnover filter of 200Cr and also apply = 0% filter by confirming order
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NC: 2024:KHC:40411-DB ITA No. 131 of 2020
passed by Dispute Resolution Panel ignoring the norms set out in Rule 10B of I.T. Rules?.
Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing to apply RPT filter of 15% when application of 25% RPT is appropriate as per general practice adopted in Transfer Pricing cases across the Country?.
Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing TPO to consider provision for bad and doubtful debts as operating in nature without checking, if these expenses are merely an extraordinary items and are included in the normal course of business over the years?"
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.
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NC: 2024:KHC:40411-DB ITA No. 131 of 2020
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.
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
SMJ List No.: 4 Sl No.: 23