The Pr Commissioner Of Income Tax vs. IQVIA RDS (INDIA) PVT LTD

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ITA/94/2024HC KarnatakaKAHC01007180202430 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the tax effect in the appeal was below Rs. 2 Crores, making it not maintainable under CBDT Circular No. 09/2024. The appeal was disposed of with liberty to revive if exceptions applied.

What were the facts?

The Revenue appealed against an ITAT order concerning the assessment year 2009-10. The appeal raised substantial questions of law regarding the rejection of comparable companies under the TNMM method.

What were the issues?

Whether the ITAT erred in rejecting comparable companies based on functional differences and whether exact comparability is required under the TNMM method.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41147-DB ITA No. 94 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH 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. 94 OF 2024 BETWEEN:

1.

THE PR COMMISSIONER OF INCOME TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU 560095

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-3(1)(1), BENGALURU TRANSFERRED FROM DCIT CIRCLE-5 AHMEDABAD PRESENT ADDRESS DCIT CIRCLE 3(1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA BENGALURU-560095 …APPELLANTS (BY SRI. SUSHAL TIWARI N.,ADVOCATE)

AND:

IQVIA RDS (INDIA) PVT LTD (EARLIER QUINTILES RESEARCH INDIA PVT LTD AND ITS SUCCESSOR), II FLOOR, ETAMIN BLOCK, PRESTIGE TECHNOLOGY PARK-II, SARJAPUR-MARATHAHALLI OUTER RING ROAD, BENGALURU-560103 PAN AAACQ0935H …RESPONDENT (RESPONDENT SERVED)

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41147-DB ITA No. 94 of 2024

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 1162/AHD/2017 DATED 24/11/2021 FOR ASSESSMENT YEAR 2009- 2010 ANNEXURE-A AND CONFIRM THE ORDER OF THE DRP CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1), BENGLAURU AND ETC.

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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. Sushal Tiwari. N., for appellants/Revenue.

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 24.11.2021 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1162/AHD/2017 for the assessment year 2009-10, raising the following substantial questions of law:

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NC: 2024:KHC:41147-DB ITA No. 94 of 2024

“1. Whether the Hon’ble ITAT erred in fact and in law, rejecting the company as comparable on the grounds that is functionally different when the primary source of income of the comparable is form ITES services?

2.

Whether the Hon’ble ITAT is correct in law and in fact in disregarding the position of the law that there could be differences between the enterprises compared under the TNMM method are method that are not likely to materially affect the price or cost or the price accruing to such enterprises? 3. Whether the Hon’ble ITAT was right in seeking exact comparability while searching for the comparable companies under the TNMN method whereas requirement of law and international jurisprudence require seeking similar comparable companies?”

3.

It is noticed that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not be maintainable 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:41147-DB ITA No. 94 of 2024

4.

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. 5. 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

BS List No.: 1 Sl No.: 29

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