DCIT, CIRCLE- 1(1)(2), INTERNATIONAL TAXATION, NEW DELHI vs. BBC MEDIA ACTION (INDIA) LTD., NEW DELHI

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ITA 7886/DEL/2017Status: DisposedITAT Delhi15 July 2021AY 2009-103 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal filed by the Revenue. This was based on the Revenue's submission that the appeal was to be withdrawn due to the tax effect being below the monetary limit prescribed by CBDT circulars.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order concerning assessment year 2009-10. The grounds of appeal related to the exclusion of operating expenses and reimbursement payments from operating costs, and the inclusion of comparable companies for transfer pricing analysis.

What were the issues?

Whether the appeal is maintainable given the low tax effect as per CBDT circulars. The substantive issues raised by the Revenue concerned the treatment of operating expenses and comparable selection in transfer pricing.

Which sections of the Income-tax Act were involved?

Section 195

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “I-1” BENCH: NEW DELHI

Before: SHRI R.K.PANDA & SHRI KUL BHARAT

Hearing: 15.07.2021Pronounced: 15.07.2021

ORDER PER KUL BHARAT, JM :

This appeal filed by the Revenue for the assessment year 2009-10 is directed against the order of Ld. CIT(A)-38, Delhi dated 27.09.2017. The Revenue has raised following ground of appeal:-

" whether on the facts and circumstances of the case, Ld. CIT(A) 1. was justified in law to exclude the other operating expenses from the operating cost without considering the IT Rule 10B(1)(e) which clearly states that the net profit margin realized by the enterprise from an international transaction entered into with an associated enterprise is computed in relation to costs incurred or sales effected or assets employed or to be employed by the enterprise or having regard to any other relevant base? 2. Whether on the facts and circumstances of the case, Ld. CIT(A) was justified in law to exclude the reimbursement payment from the operating cost not appreciating the fact that these reimbursement payment would attract withholding tax u/ s 195 of the IT Act, 1961?

3. Whether on the facts and circumstances of the case, Ld. CIT(A) was justified in law in giving direction to the TPO for inclusion of comparable M/s IDBI Intech Ltd., M/s Cyber Media India Online Ltd. and India Infoline Media & Research Services Ltd. on account of functional similarity without considering the detailed analysis and speaking order of the TPO, that the Ld. TPO has rejected M/s IDBI Intech Ltd. on functional dissimilarity while Cyber Media India Online Ltd. fails the RPT filter and India Infoline Media & Research Services Ltd. fails the service filter applied by the TPO in his order?”

2.

However, Ld. Sr. DR for the Revenue pointed out that the present appeal is to be withdrawn as the tax effect involved in the case is below Rs.50 Lacs.

3.

The CBDT vide Circular No.17/2019 dated 08.08.2019 has revised the monetary limit for filing the appeals before the Tribunal to Rs.50 Lacs.

Further, CBDT vide letter dated 20.08.2019 has also clarified that Circular No.17/2019 would be applicable to all pending appeals. In such circumstances, the present appeal filed by the Revenue in case of low tax effect is not maintainable.

4.

Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for re-institution of appeal, if the requisite material is brought to show that the appeal is protected by the exceptions prescribed in para 10 of the Circular dated 11.07.2018.

5.

In conclusion, by applying the CBDT Circular dated 08.08.2019 and letter dated 20.08.2019 (supra), the captioned appeal of the Revenue is dismissed as withdrawn/not pressed.

6.

In the result, the appeal of Revenue is dismissed.

Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 15th July, 2021.

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