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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 4TH DAY OF JULY 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A.No.275/2016
BETWEEN : 1. THE Pr. COMMISSIONER OF INCOME TAX-6
BMTC COMPLEX
KORAMANGALA
BANGALORE.
JOINT COMMISSIONER OF INCOME TAX [OSD]
CIRCLE 12[2]
BANGALORE.
...APPELLANTS
(BY SRI SANMATHI.E.I., ADV.)
AND : M/s. SUPPORT.COM INDIA PRIVATE LTD., [ERSTWHILE SUPPORTSOFT INDIA PVT. LTD.,] No.15, GOLD COURSE ROAD OFF. HAL AIRPORT ROAD BANGALORE-560008 PAN: AANCS3904R.
…RESPONDENT
(BY SRI S.SHARATH, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 08.10.2015 PASSED IN IT[TP]A NO.293/BANG/2013, FOR
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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THE ASSESSMENT YEAR 2008-2009, ANNEXURE-A, PRAYING TO [a]. 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. [b] SET ASIDE THE APPELLATE ORDER DATED 08.10.2015 PASSED BY THE ITAT, ‘C’ BENCH, BENGALURU, IN APPEAL PROCEEDINGS No.IT[TP]A No.293/BANG/2013 FOR ASSESSMENT YEAR 2008-09, ANNEXURE-A, AS SOUGHT FOR IN THIS APPEAL AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, Dr. VINEET KOTHARI, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. Sanmathi.E.I., Adv. for Appellants – Revenue. Mr. S.Sharath, Adv. for Respondent – Assessee.
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 ‘C’, Bangalore, in I.T.[T.P]A. No.293/Bang/2013 dated 08.10.2015, relating to the Assessment Year 2008-09.
The appeal has been admitted on 10.10.2017 to consider the substantial question of law
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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formulated at para 10[1] in the appeal memorandum, which reads thus: “Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that few companies are functionally different from the assessee when it satisfied all the qualitative and quantitative filters applied by the TPO. The Tribunal has used a narrower functionality filter than 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 a finding as under: “II. Persistent systems ltd. We have heard the learned DR as well as the learned authorized representative of the assessee and considered the relevant material on record. The comparability of this company has been examined and decoded by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd [supra] in para.17 as under: Xxxxxxxx
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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We find that a similar view has been taken by the Tribunal in the other decisions as relied on by the assessee. Following earlier decision of this Tribunal, we direct the AO/TPO to exclude this company from the list of comparables. Accordingly, we are not inclined to interfere with the order of the CIT[A] in respect of this company.
III. Tata Elsxi Ltd.: We have heard the learned DR as well as the learned authorized representative of the assessee and considered the relevant material on record. The comparability of this company has been examined and decided by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd [supra] in para.13 to 13.5 as under:
Xxxxx
We find that a similar view has been taken by the Tribunal in the other decisions as relied on by the assessee. Accordingly, following earlier decision of this Tribunal, we direct the AO/TPO to exclude this company from the list of comparables. We are, therefore, not inclined to
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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interfere with the order of the CIT[A] in respect of this company.
IV. Wipro Ltd.: We have heard the learned DR as well as the learned authorized representative of the assessee and considered the relevant material on record. The comparability of this company has been examined and decided by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd [supra] in para.12 to 12.5 as under:
Xxxxx
We find that a similar view has been taken by the Tribunal in the other decisions as relied on by the assessee. Following the earlier decision of this Tribunal, we direct the AO/TPO to exclude this company from the list of comparables. Accordingly, we decline to interfere with the order of the CIT[A] in respect of this company.”
On similar grounds, the Tribunal has distinguished the other comparables also.
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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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/s. 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:
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
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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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 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.
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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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.”
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.
Date of Judgment 04-07-2018, ITA No.275/2016 The Pr. Commissioner of Income Tax-6 & another Vs. M/s. Support.com India Private Ltd.,
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Hence, the Appeal filed by the Appellants- Revenue is liable to be dismissed and is accordingly dismissed. No costs.
Sd/- JUDGE
Sd/- JUDGE
NC.