SUNDAR PUJARI vs. THE GOVERNMENT OF KARNATAKA

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WP/220/2020HC KarnatakaKAHC01049670201919 January 2021Bench: ARAVIND KUMAR,B.A.PATIL5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal with liberty to the revenue to revive it if it falls within exceptions under CBDT circulars. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order concerning the assessment year 2012-13. The appeal raised questions about the exclusion of comparable companies by the Transfer Pricing Officer based on functional dissimilarity and onsite revenue filters.

What were the issues?

Whether the ITAT's direction to exclude comparable companies based on functional dissimilarity and onsite revenue filters was correct, and if the revenue's appeal is maintainable in light of CBDT circulars regarding tax effect.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39700-DB ITA No. 220 of 2020

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 220 OF 2020 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX-4 BMTC COMPLEX, KORAMANGALA BANGALORE

2.

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-4(1)(1) BENGALURU …APPELLANTS

(BY SRI.SANMATHI.E.I., ADVOCATE)

AND: 1. M/S LM WIND POWER BLADES (INDIA) PVT LTD (ERSTWHILE LM WINDPOWER TECHNOLOGIES (INDIA) PVT LTD RMZ INFINITY, NO.801 TOWER B, 8TH FLOOR, OLD MADRAS ROAD BENNIGANAHALLI, BANGALORE-560016 PAN AABCL3160C …RESPONDENT

(BY SRI.RAGHURAM CADAMBI., ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 29/11/2019 PASSED IN IT(TP)A NO.1692/BANG/2016, FOR THE

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39700-DB ITA No. 220 of 2020

ASSESSMENT YEAR 2012-2013, PRAYING TO 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; SET ASIDE THE APPELLATE ORDER DATED 29/11/2019 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE'S CASE, IN APPEAL PROCEEDINGS NO. IT(TP)A NO.1692/BANG/2016 (ANNEXURE-A) FOR ASSESSMENT YEAR 2012-2013.

THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.G.PANDIT AND HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.Raghuram Cadambi for respondent/assessee.

2.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated

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NC: 2024:KHC:39700-DB ITA No. 220 of 2020

29.11.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.1692/Bang/2016 for the assessment year 2012-13.

3.

This

Court,

admitted the appeal on 10.02.2022 to consider the following substantial questions of law: “(1) Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature since Tribunal has directed the Transfer Pricing Officer/Assessing authority to exclude certain comparable's on basis of functional dissimilarity and onsite revenue filter even though the Transfer Pricing officer has chosen comparable's on basis of FAR analysis and in accordance with parameters set out Rule 10B of the I.T. Rules?

(2) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to exclude comparable's namely, M/s.Cades Digitech Pvt. Ltd and M/s.Holtech Consulting Pvt. Ltd and Tractable Consulting Engineers Pvt. Ltd on basis of functional dissimilarity and onsite revenue filter

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NC: 2024:KHC:39700-DB ITA No. 220 of 2020

even though the said comparable's satisfied qualitative and quantitative filters applied by Transfer Pricing Officer?

(3) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to exclude M/s.Cades Digitech Pvt. Ltd as comparable on the basis of onsite revenue filter by even though the said comparable chosen by the Transfer Pricing Officer is in accordance with parameter set out in Rule 10B (2) of I.T.Rules?”

4.

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

5.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under

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NC: 2024:KHC:39700-DB ITA No. 220 of 2020

the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

6.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

MPK List No.: 2 Sl No.: 14

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