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1/7 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 6TH DAY OF JULY 2018
PRESENT
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
AND
THE HON’BLE Mrs.JUSTICE S.SUJATHA
I.T.A.No.830/2017
BETWEEN:
THE PR. COMMISSIONER OF INCOME-TAX, CIT(A) 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560 095.
THE DEPUTY COMMISSIONER OF INCOME-TAX
CIRCLE-3(1)(2), 2ND FLOOR,
BMTC BUILDING, 80 FEET ROAD,
KORMANGALA, BENGALURU-560 095.
…APPELLANTS (BY Mr. ARAVIND K.V. ADV.)
AND:
M/S. GE INTELLIGENT PLATFORM PVT. LTD. 1ST FLOOR, BUILDING 9, 43, ELECTRONIC CITY, HOSUR ROAD BENGALURU-560 100 PAN:AAACG 7573K
…RESPONDENT (BY MR.C.K.NANDAKUMAR, ADV.)
Date of Judgment 06-07-2018 I.T.A.No.830/2017 The Pr. Commissioner of Income-tax, CIT(A) & Anr. Vs. M/s. GE Intelligent Platform Pvt. Ltd.,
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THIS I.T.A IS FILED U/S.260-A OF INCOME TAX ACT, 1961 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BENTALURU IN IT(TP)A NO.164/BANG/2015 DATED 4/4/2017 AND CONFIRM THE ORDER OF THE DRP CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(2), BENGALURU.
THIS I.T.A. COMING ON FOR HEARING, THIS DAY S.SUJATHA J. DELIVERED THE FOLLOWING:-
JUDGMENT
Mr. Aravind K.V. Adv. for Appellants-Revenue Mr.C.K.Nandakumar, Adv. for Respondent-assessee
The Appellants-Revenue have filed this appeal u/s.260A of the Income Tax Act, 1961, raising purportedly certain substantial questions of law arising from the order of the ITAT, ‘A’ Bench, Bengaluru, dated 04.04.2017 passed in IT(TP)A No.164/Bang/2015 for the A.Y.2010-11.
Date of Judgment 06-07-2018 I.T.A.No.830/2017 The Pr. Commissioner of Income-tax, CIT(A) & Anr. Vs. M/s. GE Intelligent Platform Pvt. Ltd.,
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The proposed substantial questions of law framed in the Memorandum of appeal by the Appellants-Revenue are quoted below for ready reference:-
“Whether, on the facts and circumstances of the case, the Tribunal is right in law in holding that the income of Rs.2,33,97,997/- received as administrative services is part of operating revenue even when this income is attributable to the business but cannot be considered as operating revenue rather they are in nature of income from other sources since it is not derived from operating activity of the of assessee?”
The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and the Respondent-assessee, has given the following findings against Revenue with regard to various issues raised before it with regard to ‘Transfer Pricing’ and ‘Transfer Pricing Adjustments’ made by the concerned authorities below. We consider it appropriate to quote relevant portion of the order of Tribunal as hereunder:-
Date of Judgment 06-07-2018 I.T.A.No.830/2017 The Pr. Commissioner of Income-tax, CIT(A) & Anr. Vs. M/s. GE Intelligent Platform Pvt. Ltd.,
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“12. The revenue is in appeal challenging the direction of the DRP directing income from administrative services as part of operating revenue. The revenue raised the following grounds of appeal:
xxxxx The finding of the DRP is based on settled position of law and do not require any interference.”
This Court 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 and the relevant portion of the said judgment is quoted below for ready reference:
Date of Judgment 06-07-2018 I.T.A.No.830/2017 The Pr. Commissioner of Income-tax, CIT(A) & Anr. Vs. M/s. GE Intelligent Platform Pvt. Ltd.,
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“ 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. 56. We are therefore of the considered opinion that the present appeals filed by the
Date of Judgment 06-07-2018 I.T.A.No.830/2017 The Pr. Commissioner of Income-tax, CIT(A) & Anr. Vs. M/s. GE Intelligent Platform Pvt. Ltd.,
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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.”
Having heard the learned counsels for the parties, we are therefore of the opinion that no
Date of Judgment 06-07-2018 I.T.A.No.830/2017 The Pr. Commissioner of Income-tax, CIT(A) & Anr. Vs. M/s. GE Intelligent Platform Pvt. Ltd.,
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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