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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:
PR. COMMISSIONER OF INCOME TAX -2 BMTC COMPLEX, KORAMANGALA BANGALORE
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.
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.
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"?
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
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.: 33