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NC: 2024:KHC:40409-DB ITA No. 117 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. 117 OF 2020
BETWEEN:
THE PR. COMMISSIONER OF INCOME-TAX, 5th FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095.
THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 11(3), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. …APPELLANTS
(BY SRI. SUSHAL TIWARI N., ADVOCATE)
Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:40409-DB ITA No. 117 of 2020
AND:
M/S. FESTO INDIA PVT. LTD., 237B, BOMMASANDRA INDUSTRIAL AREA, BENGALURU 560 099, PAN AAACF 2940F …RESPONDENT
(BY SRI. NAGESHWAR RAO, ADVOCATE ; SRI. MALLAHAR RAO, DESIGNATED AS AAG)
THIS ITA / INCOME TAX APPEAL IF FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED
21/11/2019 PASSED IN IT(TP)A NO. 1028/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE 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
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NC: 2024:KHC:40409-DB ITA No. 117 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 Sri. Nageshwar Rao 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 21.11.2019 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.1028/Bang/2014 for the assessment year 2009-10.
This
Court,
admitted the appeal on 06.10.2020 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 consider terms of Advanced Pricing Agreement (APA) entered into by assessee for assessment
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NC: 2024:KHC:40409-DB ITA No. 117 of 2020
years 2014-15 to 2018-19 for present assessment years though it falls it is not covered in APA and mere concurrence of FAR cannot held as a basis to apply APA parameters?
Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature since Tribunal has directed the Transfer Pricing officer to consider terms of Advanced Pricing Agreement (APA) entered into by assessee for assessment years 2014-15 to 2018-19 to consider the same for present assessment years even when the terms of the APA cannot be applied to assessment years under consideration?
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:40409-DB ITA No. 117 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.: 21