Loading judgment…
No AI summary yet for this case.
- 1 -
NC: 2024:KHC:40450-DB ITA No. 398 of 2022
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.398 OF 2022
BETWEEN:
THE PR. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE C R BUILDING QUEENS ROAD BENGALURU-560001.
THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, LTU, PRESENT ADDRESS DCIT, CENTRAL CIRCLE-2(1) C R BUILDING QUEENS ROAD BENGALURU-560001.
…APPELLANTS
(BY SRI. DILIP.M., A/W SRI. RAVIRAJ Y.V., ADVOCATES)
Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA
- 2 -
NC: 2024:KHC:40450-DB ITA No. 398 of 2022
AND:
M/S. TEJAS NETWORKS LTD, PLOT NO.25, 5TH FLOOR JP SOFTWARE PARK ELETRONIC CITY, PHASE I BENGALURU-560100. PAN: AABCT1670M.
…RESPONDENT (BY SRI. ANNAMALAI S, ADVOCATE)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 09/02/2022 PASSED IN IT(TP)A NO.296/BANG/2015, FOR THE ASSESSMENT YEAR 2010-2011 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ETC.
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
- 3 -
NC: 2024:KHC:40450-DB ITA No. 398 of 2022
ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)
Heard the learned counsel Sri.Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for appellants/Revenue and learned counsel Sri. Annamalai.S., 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 09.02.2022 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.296/Bang/2015 for the assessment year 2010-11.
This
Court,
admitted the appeal on 09.01.2023 to consider the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal is justified in directing Transfer Pricing Officer to adopt 0.5% as
- 4 -
NC: 2024:KHC:40450-DB ITA No. 398 of 2022
Corporate guarantee by relying on the decision rendered by co-ordinate bench in case of Medrich Ltd, Manipal Global Education Services and Xchanging Solutions ignoring the facts of the case and TP Study put up by Transfer Pricing Officer analyzing the risk assessment, credit rating, debt to equity ratio of Associated Enterprises and viability of AE getting the loan without corporate guarantee"?
Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in directing Transfer Pricing Officer to adopt 0.5% as Corporate guarantee ignoring the findings of DRP and TPO which were well supported with materials establishing the need for variation from claim made by assessee"?
Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in holding no notional interest can be charged on the outstanding balance from AE's
- 5 -
NC: 2024:KHC:40450-DB ITA No. 398 of 2022
ignoring that TPO had rightly made said adjustments considering the facts and materials on record"?
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
- 6 -
NC: 2024:KHC:40450-DB ITA No. 398 of 2022
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.: 39