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1/8 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 21ST DAY OF AUGUST 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.953/2017
BETWEEN : 1. PR. COMMISSIONER OF INCOME TAX-7 BMTC COMPLEX, KORMANGALA BANGALORE.
DEPUTY COMMISSIONER
OF INCOME TAX, CIRCLE-12[5]
BANGALORE.
...APPELLANTS
(BY SRI SANMATHI.E.I., ADV.)
AND : M/s. UE DEVELOPMENT INDIA PVT. LTD., No.60, WELLINGTON STREET RICHMOND TOWN BANGALORE-560025.
…RESPONDENT
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 05.05.2017 PASSED IN IT[TP]A No.347/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010, VIDE ANNEXURE-A, PRAYING TO: [1] 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 05.05.2017 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH,
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BANGALORE AS SOUGHT FOR, IN THE RESPONDENT- ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN IT[TP]A No.347/BANG/2014 FOR A.Y. 2009-2010 & GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
THIS APPEAL COMING ON FOR ORDERS, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. Sanmathi.E.I., 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.347/Bang/2014 dated 05.05.2017, 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 the Tribunal is right in law in holding that in mirror transactions ALP adjustments cannot be done, i.e., if one transaction is treated as at Arm’s Length, no
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adjustment can be made on the other related corresponding transaction of the AE without appreciating that this stand is against the provisions of Section 92[3] of the Act?”
The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and Respondent-Assessee, has returned the findings as under: “4. We have heard the learned Departmental Representative as well as learned Authorised Representative and considered he relevant material on record. The assessee is a subsidiary of United Engineers Mauritius Co. Ltd., which in turn a subsidiary of United Engineers Malaysia [UEM], Berhad. In order to participate in the international bidding for the development, maintenance and management of National Highways under National Highway Authority of India [NHA], UEM had formed a joint venture with S R Projects Limited and along with the joint venture partner has secured three highway projects in India for the purpose of improving and four laning of national highways under the contract awarded under NHAI. Part of the work was given to the assessee through
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supplementary arrangement which was reported as international transaction. The issue is arising from the same arrangement between the assessee and the Associated Enterprise [AE] which was considered by this Tribunal in assessee’s own case for the Assessment Years 2004-05 to 2007-08 vide order dated 30.08.2013 in IT[TP]A Nos.284 to 286/Bang/2012 in paras 13 to 15 as under:
“xxxxx”
Since the issue arising from the identical facts and circumstances and therefore it is covered by the decision of the co-ordinate bench of this Tribunal in assessee’s own case. Hence, following the earlier order of this Tribunal, we do not find any reason to interfere with the impugned order of the CIT [Appeals]. ”
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
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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 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
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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 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
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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.”
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.
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Copy of this Order be sent to the Respondent- Assessee forthwith.
Sd/- JUDGE
Sd/- JUDGE
NC.