ITO, BANGALORE vs. M/S INFORMATICA BUSINESS SOLUTIONS PVT. LTD., BANGALORE

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ITA 457/BANG/2011Status: DisposedITAT Bangalore25 May 2016AY 2005-063 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the transfer pricing grounds of appeal no longer survived due to the MAP resolution. For Section 10A, it followed the jurisdictional High Court's decision that items excluded from export turnover must also be excluded from total turnover.

What were the facts?

The revenue appealed against the ITAT's order concerning transfer pricing adjustments and the exclusion of telecommunication expenses from export turnover for Section 10A deduction. The transfer pricing adjustments were resolved through a Mutual Agreement Procedure (MAP).

What were the issues?

Whether transfer pricing adjustments are resolved by MAP, and how telecommunication expenses affect the calculation of Section 10A deduction.

Which sections of the Income-tax Act were involved?

Section 10A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, BANGALORE BENCH B, BANGALORE

Before: SHRI. ABRAHAM P. GEORGE & SHRI. VIJAYPAL RAO

For Appellant: Shri. P. K. Prasad & Shri. Umashankar, CA

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER I.T(TP).A No.457/Bang/2011 (Assessment Year : 2005-06) Income tax Officer (International Taxation), Ward – 11(2), Bengaluru .. Appellant v. M/s. Informatica Business Solutions P. Ltd, No.66/1, Bagmane Tech Park, C. V. Raman Nagar, Bangalore 560 093 .. Respondent PAN : AABCI0762M Assessee by : Shri. P. K. Prasad & Shri. Umashankar, CA Revenue by : Shri. S. Namirajan, JCIT Heard on : 16.05.2016 Pronounced on : .05.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

Revenue in this appeal has altogether taken 15 grounds of which grounds 1, 14 and 15 are general needing no specific adjudication. Grounds 4 to 13 are on transfer pricing issues and ground 3 is on exclusion of telecommunication expenses from both export as well as total turnover ITA.457/Bang/2011 Page - 2 for working out the deduction u/s.10A of the Income-tax Act, 1961 (‘ther Act’ in short).

2.

When the case came up for hearing, Ld. Counsel for the Assessee submitted that transfer pricing adjustments done for the impugned assessment year were subject matter of a mutual agreement procedure (MRP), as per Article 27 of Indian USA Double Taxation Agreement. A copy of order No.F/980/5/2012-FTD-1, dt.04.12.2015, of Foreign Tax & Tax Research Division was placed on record. On the other issue viz., deduction u/s.10A, Ld. AR submitted that Ld. CIT (A)’s order was in line with the judgment of Hon’ble jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd (349 ITR 98). Ld. DR fairly agreed, but stated that judgment of Hon’ble jurisdictional High Court has been appealed against before the Hon’ble Apex Court.

3.

We have heard the contentions and perused the material on record. In so far as TP issues are concerned, adjustments made under TP was subject matter of MAP which has been resolved through FT & TRD order no. F/980/5/2012-FTD-1, dt.04.12.2015. Hence thr grounds relating to TP do not survive anymore. As for the issue relating to computation of deduction u/s.10A of the Act, decision given by the CIT (A) was in line ITA.457/Bang/2011 Page - 3 with the judgment of Hon’ble jurisdictional High Court in the case of Tata Elxsi Ltd (supra). Their Lordship had held that items which were excluded from export turnover had to be excluded from total turnover also for computing the deduction u/s.10A of the Act.

4.

In the result, appeal of the Revenue stands dismissed.

Order pronounced in the open court on ___ day of May, 2016.

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