PR COMMISSIONER OF INCOME TAX -2 vs. M/S EYGBGS (INDIA) PVT LTD

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ITA/78/2022HC KarnatakaKAHC01037178202127 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal, granting liberty to the Revenue to revive it if the matter falls within exceptions to CBDT circulars. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order concerning the assessment year 2011-12. The appeal raised questions about the eligibility for deduction under Section 10AA on income offered to tax pursuant to a Voluntary Transfer Pricing Adjustment.

What were the issues?

Whether income from Voluntary Transfer Pricing Adjustment is eligible for deduction under Section 10AA, and if the ITAT order was perverse for not considering materials and conditions of Section 10AA.

Which sections of the Income-tax Act were involved?

Section 10AA,Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:40419-DB ITA No. 78 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. 78 OF 2022 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX -2 BMTC COMPLEX, KORAMANGALA BANGALORE

2.

THE DEPUTY COMMISISONER OF INCOME TAX CIRCLE-3(1)(2), BMTC COMPLEX KORAMANGALA, BENGALURU …APPELLANTS (BY SRI. SANMATHI E.I., ADVOCATE) AND:

M/S EYGBS (INDIA) PVT LTD (EARLIER KNOWN AS EYGBS (INDIA) PVT LTD RMZ INFINITY TOWER C, 3RD FLOOR, OLD MADRAS ROAD, K.R. PURAM, BANGALORE-560016. …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE)

THE ITA/INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 23/11/2020 PASSED IN IT[TP]A NO.2342/BANG/2019 (ANNEXURE-A), FOR THE ASSESSMENT YEAR 2011-2012 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:

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40419-DB ITA No. 78 of 2022

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri. E.I.Sanmathi for the appellants/Revenue and Smt. Tanmayee Rajkumar, learned counsel for the respondent/assessee.

2.

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 23.11.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.2342/Bang/2019 for the assessment year 2011-12.

3.

This

Court,

admitted the appeal on 26.07.2022 to consider the following substantial questions of law: (1) "Whether under the facts and in circumstances of the case the Tribunal was right in law in holding that

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NC: 2024:KHC:40419-DB ITA No. 78 of 2022

income offered to tax pursuant to Voluntary Transfer Pricing Adjustment should be regarded as profit of business for purpose of computing deduction under section 10AA of the Act the assessee is entitled for deduction under section 10AA of the Act without considering that no deduction under said section will be allowed as the Gurgoan Unit had incurred a loss and voluntary Transfer Pricing adjustment shall be included in the total income of the assessee"?

(2) "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as Tribunal has failed to consider materials on record, findings of authorities and when conditions set out in section 10AA are not satisfied by assessee"?

4.

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:40419-DB ITA No. 78 of 2022

5.

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.

6.

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.: 33

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