THE PR. COMMISSIONER OF INCOME TAX vs. M/S INGERSOLL RAND TECHNOLOGIES AND SERVICES PVT LTD.,

THE PR. COMMISSIONER OF INCOME-TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560 095.

THE ASST. COMMISSIONER OF INCOME -TAX, CIRCLE-3(1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560 095. …APPELLANTS

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 04.01.2023 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.2499/Bang/2019 for the assessment year 2015-16, raising the following substantial questions of law: 1. "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in directing Transfer Pricing Officer (for short TPO) to determine the ALP of the international transactions pertaining to cost contribution charges by adopting Transaction Net Margin Method (for short TNMM) as the most appropriate method

"Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in not appreciating that under similar circumstance a uncontrolled comparable would not incur such expenditure, then the ALP will be Nil and there is no necessary to apply a particular method to arrive at such conclusion and when Transfer Pricing Officer has adopted most appropriate method considering the parameters set out in Section 92C of the Act and Rules framed thereunder"?

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.