PR. COMMISSIONER OF vs. M/S TEKTRONIX ENGINEERING

PR. COMMISSIONER OF INCOME TAX-VII BMTC COMPLEX, KORAMANGALA BANGALORE.

THE DY. COMMISSIONER OF INCOME TAX CIRCLE-12(4), BANGALORE.

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, Bangalore Bench ‘B’, Bangalore, dated 19.10.2016 passed in IT(TP)A No.1318/Bang/2012 (M/s.Tektronix Engineering Development (India) Pvt. Ltd., vs. Dy.Commissioner of Income Tax ) for A.Y.2008-09.

This appeal has been admitted on 25.10.2017 to consider the following substantial question of law framed by the learned counsel for the Appellants- Revenue:-

The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and the Respondent-Assessee, has given the following findings:- “Since two comparable companies viz. Bodhtree Consulting Ltd. and Lucid Software Ltd. were accepted by the assessee itself as comparable for the Assessment Year 2006-07 and the Tribunal vide its order dt.20.02.2015 in assessee’s own case has not disturbed the comparability of these two companies therefore

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. The relevant portion of the said judgment is quoted below for ready reference: “ Conclusion:

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. 56. We are therefore of the considered opinion that the present appeals filed by the Revenue do not give rise to any substantial

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.”

Having heard the learned counsels for the parties, we are therefore of the opinion that no substantial question of law arises in the present case