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1/7 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 30TH DAY OF AUGUST 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.252/2018
BETWEEN : 1. PR. COMMISSIONER OF INCOME TAX-6 BMTC COMPLEX, KORAMANGALA, BENGALURU.
THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12 (3), BENGLAURU.
...APPELLANTS
(BY SRI E.I.SANMATHI, ADV.)
AND : M/s. SLING MEDIA PVT. LTD., PSS PLAZA No.6, WING TUNNEL ROAD, BENGLAURU 560052 PAN: AACCD 0297 R.
…RESPONDENT
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 27.10.2017 PASSED IN IT[TP]A No.253/BANG/2014, FOR THE ASSESSMENT YEAR: 2009-2010, PRAYING TO: DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED: 27.10.2017 PASSED BY THE
Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd.,
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INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BANGALORE, IN APPEAL PROCEEDINGS NO. IT[TP]A No.253/BANG/2014 FOR ASSESSMENT YEAR: 2009-2010, AS SOUGHT FOR IN THIS APPEAL.
THIS APPEAL COMING ON FOR ORDERS, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. E.I.Sanmathi, 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 ‘A’, Bangalore, in IT[TP]A No.253/Bang/2014 dated 27.10.2017, relating to the Assessment Year 2009-10.
The substantial question of law framed by the Revenue in the Memorandum of Appeal is as under: “Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in excluding comparable’s namely, M/s. Bodhtree Consulting Ltd and M/s. Kals Information Systems Ltd., as comparables on functional dissimilarity?”
Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd.,
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The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and Respondent-Assessee, has returned the findings as under: “9. We heard rival submissions and perused the material on record. The issue of comparability of KALS Information Systems Ltd., [Seg.] had come up for consideration before the co-ordinate bench of Tribunal in the case of CISCO Systems [India] Pvt. Ltd., [Supra] wherein it has been held as under:
“xxxxx”
The comparability of Bodhtree Consulting Co., with a software development services company such as the Assessee for AY 09-10 was considered by this Tribunal in the case of M/s. Cisco Systems [India] Pvt. Ltd., IT[TP]A No.271/Bang/2014 for AY 09-10 order dated 14.8.2014. This Tribunal held as follows:
“xxxxx”
Respectfully following the above decisions, we direct deletion of KALS Information Systems
Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd.,
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Ltd., and Bodhtree Consulting Co., 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: “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
Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd.,
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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 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
Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd.,
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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 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.”
Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd.,
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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.
Copy of this Order be sent to the Respondent- Assessee forthwith.
Sd/- JUDGE
Sd/- JUDGE
NC.