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1/8 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 31ST DAY OF AUGUST 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.233/2018
BETWEEN :
THE PR. COMMISSIONER OF INCOME TAX, 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560 095.
THE INCOME TAX OFFICER WARD-11(1), PRESENT ADDRESS WARD-1(1)(2) 2ND FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560 095. ... APPELLANTS (BY SRI. DILIP, ADV. FOR SRI. ARAVIND. K. V, ADV.)
AND:
M/S. ARIBA TECHNOLOGIES INDIA PVT. LTD., RMZ ICON, # 51 PALACE ROAD, BENGALURU-560 052 PAN AADCA 09118P. ... RESPONDENT
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:11/10/2017 PASSED IN IT(TP)A NO.1540/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010 (VIDE ANNEXURE-D)
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO. 1540/BANG/2014 DATED:11/10/2017 AND VIDE ANNEXURE-‘D’ CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE INCOME TZX OFFICER, WARD-1(1)(2), BENGALURU AND ETC.
THIS APPEAL COMING ON FOR ORDERS, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. Dilip, Adv., for Mr. K.V.Aravind, Adv. for Appellants – Revenue.
This Appeal is filed by the Revenue purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, Bangalore Bench ‘B’, Bangalore, in IT[TP]A No.1540/Bang/2014 dated 11.10.2017, (M/s Ariba Technologies India Pvt. Ltd., Vs. The Income-Tax Officer) for AY 2009-10.
The proposed substantial questions of law framed in the Memorandum of Appeal by the
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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Appellant/s Revenue are quoted below for ready reference:
“1. Whether on the facts and circumstances of the case, the Tribunal is correct in confirming the order of Commissioner of Income Tax(Appeals) directing the assessing officer to exclude expenses in foreign currency and other expenses that has been excluded from ETO, from the total turnover also and accordingly recomputed the deduction under Section 10A?”
“Whether on the facts and in circumstances of the case, the Tribunal is right in law in excluding certain comparable’s on the ground of functional dis-similarity by following its earlier decision which has not reached finality?”
The learned counsel appearing for the Appellants – Revenue, Mr. Dilip for K.V. Aravind
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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submitted that he does not press the first Substantial Question of Law raised by him in the present appeal. Same is placed on record.
The learned Tribunal, after discussing the rival contentions of both the Appellants/Revenue and the Respondent-Assessee, has given the following findings:
Regarding Substantial Question of Law No.2:
“ 11. As far as exclusion of Bodhtree Consulting Ltd., is concerned, we find that this issue was examined by the Tribunal in the case of M/s Infinera India Pvt. Ltd.,(supra), wherein the Tribunal following the order of the Tribunal in the case of Cisco Systems India Pvt. Ltd.,(supra) has directed the exclusion of Bodhtree Consulting Ltd. from the list of comparables. The relevant observations of the Tribunal are extracted hereunder: xxxxx xxxxxx xxxxxx
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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Accordingly, following the order of the Tribunal in the case of Infinera India Pvt. Ltd.(supra), we direct that Bodhtree Consulting Ltd. be excluded from the list of comparables.”
However, this Court in a recent judgment in I.T.A. Nos.536/2015 c/w 537/2015 delivered on 25.06.2018 (Prl. Commissioner of Income Tax & Anr. –v- M/s Softbrands India Pvt. Ltd.,) has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable.
The relevant portion of the said judgment is quoted below for ready reference:
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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“Conclusion: 55.
A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, the appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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considered opinion, give rise to any substantial question of law.
We are therefore of the considered opinion that the present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed.
We make it clear that the same yardsticks and parameters will have to be applied, even if such appeals are filed by the Assessees, because, there may be cases where the Tribunal giving its own reasons and findings has found certain comparables to be good comparables to arrive at an ‘Arm’s Length Price’ in the case of the assessees with which the assessees may not be satisfied and have filed such appeals before this Court. Therefore we clarify that mere dissatisfaction with the findings of facts arrived at by the learned Tribunal is not at all
Date of Judgment 31-08-2018, ITA No.233/2018 The Pr. Commissioner of Income Tax & Another Vs. M/s. Ariba Techologies India Pvt. Ltd.,
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a sufficient reason to invoke Section 260-A of the Act before this Court.
The appeals filed by the Revenue are therefore dismissed with no order as to costs.”
Having heard the learned counsel appearing for the Appellants-Revenue, we are therefore of the opinion that no substantial question of law arises in the present case also. The Appeal filed by the Appellants- Revenue is liable to be dismissed and it is dismissed accordingly. No costs. The copy of this judgment be sent to the Respondent – Assessee forthwith.
Sd/- JUDGE
Sd/- JUDGE
Psg*.