PR COMMISSIONER OF INCOME TAX vs. M/S MAXIM INDIA INTEGRATED CIRCUIT DESIGN PVT LTD

PR. COMMISSIONER OF INCOME TAX, BMTC COMPLEX, KORAMANGALA, BENGALURU.

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4(1)(2), BMTC COMPLEX, KORAMANGALA, BENGALURU. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE)

M/S MAXIM INDIA INTEGRATED CIRCUIT DESIGN PVT LTD., 4TH FLOOR, TOWER B, COMMERCIO @ MANTRI, SURVEY NO.51/2, 51/3, DEVARABISANAHALLI, SURVEY NO.39/5, KARIYAMMANA AGRAHARA VILLAGE, VARTHUR HOBLI, BANGALORE - 560 103. PAN AACCM9437E. …RESPONDENT

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 02.11.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.1573/Bang/2017 for the assessment year 2013-14.

This

Whether on the facts and circumstances of the case and in law, the Tribunal is right in excluding certain comparable's chosen by Transfer Pricing Officer even though the comparable's chosen by said officer is in accordance with Rule 10B of the Act?

Whether on the facts and circumstances of the case and in law, the Tribunal is right in directing assessing authority/Transfer Pricing Officer to allow working capital adjustment when the assessee was not able to demonstrate that difference in its working capital vis-a-vis the comparable-companies had affected its profit margin?

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in rejecting comparable's on ground of high turnover without acknowledging that there is no direct relationship between brand value and margin earned by the Company, brand may generate revenue of the Company but does not increase the profit margin?”

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 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.