THE PR. COMMISSIONER OF INCOME TAX vs. M/S. CERNER HEALTHCARE SOLUTIONS PVT LTD

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

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

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the expenses have crystallized even before the vesting period?

Whether, based on the facts and circumstances of the case in law, the tribunal was right in holding that difference between market price of the shares at the time of grant of option and offer price amounts to discount and the same has to be treated as employee cost in the hand of the assessee and not in hands of the holding company?

Whether, based on the facts and circumstances of the case and in law, the Tribunal's order can be said as perverse in nature was right in holding that the services offered by the secondee to the assessee was not in the nature of Fees for Technical Services without verifying if any enduring benefit was "made available" to the assessee as per Article 12 of India-US DTAA?

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the secondment fee was mere reimbursement made by the assessee in India to overseas entity towards seconded employees and cannot be regarded as "Fees for Technical Services"?

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the reimbursement of expenses made to the holding company was not in the nature of Royalty' without verifying in detail the nature of the bandwidth services received by the assessee from the non-resident services provider?

Whether based on the facts and circumstances of the case and in low, the Tribunal was right in holding that the discount on issue of ESOP is allowable deduction in computing the Income under the head profits and gains of the business?

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the expenses have crystallized even before the vesting period?

Whether, based on the facts and circumstances of the case in law, the tribunal was right in holding that difference between market price of the shares at the time of grant of option and offer price amounts to discount and the same has to be treated as employee cost in the hand of the assessee and not in hands of the holding company?

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the services offered by the secondee to the assessee was not in the nature of Fees for Technical Services without verifying if any enduring benefit was "made available" to the assessee as per Article 12 of India-US DTAA?

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the secondment fee was mere reimbursement made by the assessee in India to overseas entity towards seconded employees and cannot be regarded as "Fees for Technical Services"?

Whether, based on the facts and circumstances of the case and in law, the Tribunal was right in holding that the reimbursement of expenses made to the holding company was not in the nature of Royalty' without verifying in detail the nature of the bandwidth services received by the assessee from the non- resident services provider?”

Heard Shri M.Dilip, learned standing counsel for the Revenue both on delay and merits.

Shri Dilip submitted that the assessee is engaged in development of software. The AO2 has passed the assessment order making Transfer Pricing and other adjustments. The CIT(A)3 allowed assessee’s appeal vide order dated 28.11.2019. Revenue challenged the said order before the ITAT. By impugned order, the ITAT has remitted the matter to the file of the AO. Shri Dilip mainly contended that the ITAT has failed to notice that communication expenses paid for bandwidth services partakes the character of technical services.

A careful perusal of the impugned order shows that the ITAT has followed judgment of division bench of this court in M/s.Flipkart Internet Pvt.Ltd Vs. DCIT (IT)4 and ultimately allowed the appeal in part and remitted the matter to the file of the AO. Revenue does not dispute that assessee’s case is covered by the said judgment. The order is passed based on the decision of this court, which is jurisdictional High Court and the said order is not under challenge. Hence, we see no ground to interfere. Since the ITAT has remitted the matter to the file of the AO, questions of law are not answered. Resultantly, this appeal fails and it is accordingly dismissed. Consequently, I.A.No.2/2023 also stands disposed of.