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1/8 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 9TH DAY OF JULY 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.45/2012
BETWEEN :
M/s ALTAIR ENGINEERING INDIA PVT. LTD., MERCURY, 2B BLOCK, 5TH FLOOR PRESTIGE TECH PARK, SARJAPUR MARATHHALI RING ROAD, BANGALORE-560103 REP. BY ITS FINANCIAL CONTROLLER-INDIA SRI P.SRINIVASA RAO S/O SRI P.NARAYANA RAO, AGED ABOUT 38 YEARS
...APPELLANT
(BY SRI TATA KRISHNA, ADV. FOR SRI CHYTHANYA K.K., ADV.)
AND :
THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-11 (1) 5TH FLOOR, R.P.BHAVAN NRUPATHUNGA ROAD BANGALORE-560001
…RESPONDENT
(BY SRI K.V.ARAVIND, ADV.)
THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 11.10.2011 PASSED IN ITA NO.290/BANG/2011, FOR THE ASSESSMENT YEAR 2007-08 ANNEXURE-A, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO: I. FORMULATE THE
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SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDER DATED 11.10.2011 PASSED BY THE ITAT IN ITA NO.290/BANG/2011 ANNEXURE-A.
THIS APPEAL COMING ON FOR HEARING, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. Tata Krishna, Adv. for Mr. Chythanya K.K., Adv. for Appellant – Revenue. Mr. K.V.Aravind, Adv. for Respondent – Assessee.
This Appeal is filed by the Assessee purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, ‘A’ Bench, Bangalore, in IT [TP] A No.290/Bang/2011 dated 11.10.2011 relating to the Assessment Year 2007-08.
This Appeal has been admitted on 12.06.2012 to consider the following substantial questions of law as framed by the Assessee in the Memorandum of Appeal: “1. Whether in law, the Tribunal was justified in approving the ALP determined by the TPO and approved by the DRP without giving any valid reasons through a speaking order ?
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Whether in law, the circumstances being identical and when the Revenue has accepted the ALP determined by the Appellant under CUP method in the preceding year after examination, was justified in deviating from the same by adopting TNMM method to make the impugned addition ?
Whether in law, the DRP and Tribunal were right in ignoring the vital fact that the Appellant was exporting to the parent company only an incomplete product and in the circumstances the comparisons relied on by the TPO were inapplicable while justifying the impugned addition made on account of variance in ALP determined arbitrary by the TPO ?”
The learned Tribunal, after discussing the rival contentions of both the Appellant-Assessee and Respondents-Revenue, has returned a finding with regard to question Nos.1 to 3 as under: “5. After considering the submissions of both the parties and material on record, it is
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noticed that similar issue having identical facts was involved in the assessee’s own case in the preceding year, which has been adjudicated by the ITAT, ‘Bangalore Bench “B”, Bangalore in ITA No.1184/Bang/2010 and the relevant findings are given in paras 4 to 7 of the order dated 14.3.2011, which read as under: Xxxxx 8. After considering the submissions of both the parties and the material on record, it is noticed that an identical issue having similar facts was a subject matter of assessee’s appeal in ITA No.1184/Bang/2010 for the A.Y.2006-07 and the ITAT Bangalore Bench ‘B’, Bangalore, vide para 8 of the order dated 14.3.2011 observed as under:
The second issue raised by the assessee is that disallowance of assessee’s claim of Rs.1,52,58,201/- made u/s 10A is not justified. The very same issue was considered in assessee’s own case for assessment year 2005-06 by ITAT, ‘B’ Bench, Bangalore, through their order dated 21.01.2011 in ITA.762/Bang/2010.
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The very same issue was decided in favour of the assessee for assessment year 2004-05 as well by ITAT, Bangalore Bench. In view of that, the said disallowance of Rs.1,52,58,201/- is deleted and the assessing authority is directed to give consequential benefits.”
The controversy involved herein is no more res integra in view of the decision of this Court in I.T.A. Nos.536/2015 c/w 537/2015 dated 25.06.2018 (Prl. Commissioner of Income Tax & Anr. –v- M/s Softbrands India Pvt. Ltd.,) wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable. The relevant portion of the Judgment is quoted below for ready reference: “Conclusion:
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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.
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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.
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The appeals filed by the Revenue are therefore dismissed with no order as to costs.”
In the circumstances, having heard the learned Counsel appearing for both the sides, We are of the considered opinion that no substantial question of law arises for consideration in the present case. Hence, the Appeal filed by the Appellant-Assessee is liable to be dismissed and is accordingly dismissed. No costs.
Sd/- JUDGE
Sd/- JUDGE
ln.