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1/7 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 29TH DAY OF AUGUST 2018
PRESENT
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
AND
THE HON’BLE Mrs.JUSTICE S.SUJATHA
I.T.A.No.621/2017
BETWEEN:
PR. COMMISSIONER OF INCOME TAX-IV BMTC COMPLEX, KORAMANGALA BANGALORE.
THE ASSISTANT COMMISSIONER OF INCOME TAX GANDHINAGAR, AHMEDABAD GANDHINAGAR CIRCLE.
…APPELLANTS
(By Mr. E.I. SANMATHI, ADV.)
AND:
M/S. MOLEX MAFATLAL MICRON PVT LTD (NOW MERGED WITH M/S. MOLEX INDIA LTD.,) PLOT N.6(A), SADARMANGALA, BANGALORE.
…RESPONDENT
THIS I.T.A. IS FILED UNDER SECTION 260-A OF THE IT ACT, 1961, PRAYING TO DECIDE THE FOREGOING QUESTIONS
Date of Judgment 29-08-2018 I.T.A.No.621/2017 Pr. Commissioner of Income Tax-IV & Anr. Vs. M/s. Molex Mafatlal Micron Pvt Ltd.,
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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: 10-01-2017 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, BANGALORE, IN APPEAL PROCEEDINGS NO. IT(TP)A No.1197/Ahd/2010 FOR A.Y.2005-06 VIDE ANNEXURE A AS SOUGHT FOR IN THIS APPEAL AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
THIS I.T.A. COMING ON FOR ORDERS THIS DAY, S. SUJATHA J. DELIVERED THE FOLLOWING:-
JUDGMENT
Mr. Sanmathi E.I. Adv. for Appellants- Revenue
The Appellants-Revenue have filed this appeal u/s.260A of the Income Tax Act, 1961, raising purportedly one substantial question of law arising from the order of the ITAT, ‘B’ Bench, Bangalore, dated 10.01.2017 passed in IT(TP)A No.1197/Ahd/2010 for the A.Y.2005-06.
The proposed substantial question of law framed in the Memorandum of appeal by the
Date of Judgment 29-08-2018 I.T.A.No.621/2017 Pr. Commissioner of Income Tax-IV & Anr. Vs. M/s. Molex Mafatlal Micron Pvt Ltd.,
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Appellants-Revenue is quoted below for ready reference:- “Whether on the facts and in the circumstances of the case and in law, the Tribunal was erred in directing the assessing authority to allow the benefit of 5% variation by following its earlier order in case of SAP Labs which has been challenged before this Hon’ble Court in ITA no.23 and 24/2011?”.
ITA Nos.23/2011 and 24/2011. referred to by the learned counsel for the appellants-Revenue in the substantial question of law have already been dismissed by this Court on 09.07.2018 holding that no substantial question of law arises for consideration.
The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and the Respondent-Assessee, has given the following findings:- “17. Ground No.1 is general in nature, do not required any adjudication. Ground No.2 is
Date of Judgment 29-08-2018 I.T.A.No.621/2017 Pr. Commissioner of Income Tax-IV & Anr. Vs. M/s. Molex Mafatlal Micron Pvt Ltd.,
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already decided in departmental appeal in ground No.1 which has been adjudicated at page No.12. Ground Nos.3 and 3.1 has been decided in the case of Deloite Consulting in ITA No.1082/Hyd/2010 vide order dated 22.7.2011 and SAP Labs in ITA No.418/Bang/2008. Respectively following the coordinate bench’s decision, we direct the AO to give the benefit of 5% variation to the assessee. Ground No.4 is conceptual for which no adjudication is necessary. Ground No.5 is already decided in departmental appeal in para 13. Ground No.6 is consequential and the TPO is directed to rework the interest.”
However, this Court in a recent judgment in ITA No.536/2015 C/w ITA No.537/2015 delivered on 25.06.2018 (Prl. Commissioner of Income Tax & Anr. Vs. 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.
Date of Judgment 29-08-2018 I.T.A.No.621/2017 Pr. Commissioner of Income Tax-IV & Anr. Vs. M/s. Molex Mafatlal Micron Pvt Ltd.,
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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 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.
Date of Judgment 29-08-2018 I.T.A.No.621/2017 Pr. Commissioner of Income Tax-IV & Anr. Vs. M/s. Molex Mafatlal Micron Pvt Ltd.,
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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 a sufficient reason to invoke Section 260-A of the Act before this Court. 58. The appeals filed by the Revenue are therefore dismissed with no order as to costs.”
Date of Judgment 29-08-2018 I.T.A.No.621/2017 Pr. Commissioner of Income Tax-IV & Anr. Vs. M/s. Molex Mafatlal Micron Pvt Ltd.,
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Having heard the learned counsel 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.
Sd/- JUDGE
Sd/-
JUDGE