Loading judgment…
No AI summary yet for this case.
1/8 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 6TH DAY OF AUGUST 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.270/2017
BETWEEN:
PR. COMMISSIONER OF INCOME TAX - 4 BMTC COMPLEX KORAMANGALA BANGALORE
DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(4) BANGALORE
... APPELLANTS
(BY SRI.SANMATHI E I, ADV.) AND:
M/S JDA SOFTWARE PVT. LTD. (SINCE MERGED WITH JDA SOFTWARE PVT. LTD. ERSTWHILE I2 TECHNOLOGIES INDIA PVT. LTD.) NO.132, 133, DIVYASHREE TECHNOLOGIES, YAMLUR POST OFF OLD AIRPORT ROAD BANGALORE – 37
... RESPONDENT
(BY SRI SANDEEP HUILGOL, ADV. FOR SRI. T. SURYANARAYANA, ADV.,)
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 2/8
THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:21/09/2016 PASSED IN IT(TP)A NO.56/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010 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:21/09/2016 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE'S CASE, IN APPEAL PROCEEDINGS IN IT(TP)A NO.56/BANG/2014 FOR A.Y. 2009-10 ANNEXURE – A & GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
THIS APPEAL COMING ON FOR HEARING, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. E.I. Sanmathi, Adv. for Appellants – Revenue. Mr. Sandeep Huilgol, Adv., for Mr. T. Suryanarayana, Adv. for Respondent – Assessee.
This Appeal is filed by the Revenue purportedly raising substantial question of law arising from the Order of the Income Tax Appellate Tribunal, Bench ‘B’, Bangalore in IT[TP]A No.56/Bang/2014 dated 21.09.2016, relating to the Assessment Year 2009-10.
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 3/8
This Appeal has been admitted on 05.12.2017 to consider the following substantial question of law. “Whether on the facts and in the circumstances of the case, the Tribunal erred in holding that certain companies are different from assessee – company by following its earlier orders, when it satisfies all the qualitative and quantitative filters applied by the TPO and the Tribunal has used a narrower functionality filter that the TPO, but has not tested other comparables against the narrower functionality filter applied by it?”
The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and Respondent-Assessee, has returned findings as under:
“11. KALS Information Systems Ltd., has been considered in assessee’s own case in JDA Software Pvt. Ltd., in ITA No.1428/Bang/2010 for asst. year 2006-07 and JDA has merged with i2 Technologies India Pvt. Ltd., in IT[TP]A
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 4/8
No.1189/Bang/2011 asst. year 2007-08 similar issue has been dealt with.
Respectfully following the decision of co-ordinate Bench in the assessee’s own case, we direct the Assessing Officer to follow the same.
xxxx xxxx
Persistent Systems Ltd., the comparable is functionally dissimilar as the company is engaged in product design services and into software product development. The issue is covered by the decision of i2 Tech. Vs. DCIT, in IT[TP] No.1189/Bang/2011 for asst. year 2007-08.
Tata Elxsi Ltd., [Seg] is functionally dissimilar as the company is engaged in the development NACH product and development services. Further the company is engaged in product design services. This comparable is covered by the decision of JDA Software Pvt. Ltd., in IT[TP] 1428/Bang/2010 for asst. year 2006-07 and
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 5/8
JDA has merged with i2 Technologies Pvt. Ltd., Vs. DCIT in IT[TP] No.1189/Bang/2011 asst. year 2007-08. The TPO is directed to follow the order in assessee’s own case [supra].
The ld TPO shall also follow the decision in the case of McAfee Software [India] Pvt. Ltd., [supra] with respect to rejection of Tata Elxsi.”
For the similar reasons, the Tribunal has excluded other comparables also.
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
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 6/8
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 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
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 7/8
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. 56. 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
Date of Judgment 6-8-2018, ITA No.270/2017 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. JDA Software Pvt. Ltd., 8/8
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.”
Having heard the learned counsels appearing for the parties, 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.
Sd/- JUDGE
Sd/- JUDGE
AN/-