SAP Labs India Pvt. Ltd. v. ACIT

44 SOT 156Income Tax Appellate Tribunal2011#1114 most cited

What is SAP Labs India Pvt. Ltd. v. ACIT authority for?

Foreign exchange fluctuation gains or losses are operational in nature and must be included in the computation of the operating margin for both the assessee and comparable companies when determining the Arm's Length Price.

100

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 2012 to 2022.

Also referred to as

SAP Labs India v ACIT · 44 SOT 156 · 6 ITR (Trib) 81 · foreign exchange fluctuation gain loss · operating margin computation · Arm's Length Price · transfer pricing adjustment · operational income · comparable companies · section 92C(2) · associated enterprises · TNMM

Also reported as

6 ITR (Trib) 81

Issues it is cited on

functional analysissection 92c(2)working capital adjustmentrelated party transactionarms length pricecomparable companiesmost appropriate methodarm's length priceassociated enterprisestransfer pricing adjustmentassociated enterprisetnmm

Judgments citing SAP Labs India Pvt. Ltd. v. ACIT

Deputy Commissioner of Income Tax Officer Circle-3(1)(1), Bangalore vs. M/S Fmc India Private Limited, Bangalore

In the result, appeal filed by assessee stands partly allowed and appeal filed by revenue stands allowed for statistical purposes

ITA 2732/BANG/2018[2013-14]Status: DisposedITAT Bangalore29 Sept 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2013-14 M/S. Fmc India Pvt. The Assistant Ltd., Commissioner Of Embassy Star 1St Floor, Income Tax, No. 8 Palace Road, Circle 3(1)(1), Bangalore – 560 052. Bangalore. Vs. Pan: Aaacf4579N Appellant Respondent & Assessment Year : 2013-14 (By Revenue) Assessee By : Shri Nageswar Rao, Advocate Revenue By : Smt. S. Praveena, Cit Drp-2 Date Of Hearing : 07-07-2022 Date Of Pronouncement : 29-09-2022 Order Per Beena Pillaipresent Cross Appeals Are Filed By The Assessee & Revenue Against Order Dated 23/07/2018 Passes By The Ld.Cit(A)-3, Bangalore For Assessment Year 2013-14 On Following Grounds Of Appeal:

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Smt. S. Praveena, CIT DRP-2
Section 250Section 37(1)

…have duly been considered. The issue has been discussed in detail by the TPO on page 4 of her order. In relation to treatment of "foreign exchange fluctuation gain/loss", the jurisdiction bench of ITAT in the case of SAP LABS India (P) Ltd v Asstt CIT [2011] 44 SOT 156 (Bang), held that the foreign exchange fluctuation income cannot be excluded from the computation of the operating margin of the assessee- company. In the case of Petrofac Engineering Services India (P) Ltd v ITO [20141 46 taxmann.com 126 (Chennai - Trib), ITAT held that in case of international transactions entered into by assessee with its AE, f…

M/S Fmc India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-3(1)(1), Bangalore

In the result, appeal filed by assessee stands partly allowed and appeal filed by revenue stands allowed for statistical purposes

ITA 2611/BANG/2018[2013-14]Status: DisposedITAT Bangalore29 Sept 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2013-14 M/S. Fmc India Pvt. The Assistant Ltd., Commissioner Of Embassy Star 1St Floor, Income Tax, No. 8 Palace Road, Circle 3(1)(1), Bangalore – 560 052. Bangalore. Vs. Pan: Aaacf4579N Appellant Respondent & Assessment Year : 2013-14 (By Revenue) Assessee By : Shri Nageswar Rao, Advocate Revenue By : Smt. S. Praveena, Cit Drp-2 Date Of Hearing : 07-07-2022 Date Of Pronouncement : 29-09-2022 Order Per Beena Pillaipresent Cross Appeals Are Filed By The Assessee & Revenue Against Order Dated 23/07/2018 Passes By The Ld.Cit(A)-3, Bangalore For Assessment Year 2013-14 On Following Grounds Of Appeal:

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Smt. S. Praveena, CIT DRP-2
Section 250Section 37(1)

…have duly been considered. The issue has been discussed in detail by the TPO on page 4 of her order. In relation to treatment of "foreign exchange fluctuation gain/loss", the jurisdiction bench of ITAT in the case of SAP LABS India (P) Ltd v Asstt CIT [2011] 44 SOT 156 (Bang), held that the foreign exchange fluctuation income cannot be excluded from the computation of the operating margin of the assessee- company. In the case of Petrofac Engineering Services India (P) Ltd v ITO [20141 46 taxmann.com 126 (Chennai - Trib), ITAT held that in case of international transactions entered into by assessee with its AE, f…

S&P Capital Iq (India) Private Limited (Successor in Interest of Snl Financial (I) Pvt Ltd), Hyderabad vs. Dy. Commissioner of Income Tax, Circle-3(1), Hyderabad

In the result, the appeal of assessee is treated as allowed for statistical purposes

ITA 1652/HYD/2019[2009-10]Status: DisposedITAT Hyderabad11 Aug 2022AY 2009-10

Bench: Shri Rama Kanta Panda & Shri K.Narasimha Chary

For Appellant: Shri K.C.Devdas, ARFor Respondent: 01/08/2022
Section 10TSection 143(3)Section 144C

…rectly linked with the export business carried out by the assessee and therefore it has to be treated as income derived by an undertaking. Further we are in agreement with the submission of the Ld. AR that in the case of SAP LABS India (P) Ltd vs. ACIT (2011) 44 SOT 156 the Bangalore Bench of the Tribunal held that the foreign exchange gain is operating in nature. We therefore, while accepting the contention of the assessee, direct the learned Assessing Officer/Ld. TPO to consider the foreign exchange gain as operating in nature for calculating the margin of the assessee. 9. Coming to the grievance of the assess…

M/S. Emerson Automation Solutions Intelligent Platforms Private Limited (Formerly M/S Ge Intelligent Platforms Private Limited), Bangalore vs. The Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

In the result, grounds 10 and 11 are allowed for statistical purposes

ITA 356/BANG/2018[2013-14]Status: DisposedITAT Bangalore24 May 2022AY 2013-14

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(Tp)A No.356/Bang/2018 : Asst.Year 2013-2014 M/S.Emerson Automation The Assistant Commissioner Solutions Intelligent Platforms Of Income-Tax, Circle 3(1)(2) V. Bangalore. Private Limited (Formerly Known As M/S.Ge Intelligent Platforms Private Limited) Velankani Tech Park, Building 9 First Floor, 43 Hosur Road Bangalore 560 100 Pan : Aaacg7573K (Appellant) (Respondent) Appellant By : S/Sri.Sachit Jolly & Aayush Nagpal, Advocates Respondent By : Sri.Sumer Singh Meena, Cit-Dr Date Of Pronouncement : 24.05.2022 Date Of Hearing : 17.05.2022 O R D E R Per George George K, Jm : This Appeal At The Instance Of The Assessee Is Directed Against Final Assessment Order Dated 30.10.2017 Passed U/S 143(3) R.W.S. 144C Of The I.T.Act. The Relevant Assessment Year Is 2013-2014. 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In The Business Of Process Industrial Automation That Includes Manufacture & Trading Of Automation Products, Solutions & Services For The Process Controlled Application. For The Relevant Assessment Year The Return Of Income Was Filed By The Assessee On 29.11.2013 Declaring Total Loss Of Rs.1,06,46,560. The 2 It(Tp)A No.356/Bang/2018 M/S.Emerson Automation Solutions Intelligent Platforms Pvt.Ltd Assessment Was Selected For Scrutiny By Issuance Of Notice U/S 143(2) Of The I.T.Act. During The Course Of Assessment Proceedings, The Matter Was Referred To The Transfer Pricing Officer (Tpo) To Determine The Arm’S Length Price (Alp) Of The International Transactions Undertaken By The Assessee With Its Associated Enterprises (Aes). The Tpo Vide Order Dated 31.10.2016 Passed U/S 92Ca Of The I.T.Act Proposed The Following Adjustments:- Segment Value Of Adjustment (Rs.) Manufacturing Segment 4,43,23,760 Hq Charges 86,39,654 Total 5,37,40,836

For Appellant: S/Sri.Sachit Jolly & Aayush Nagpal, AdvocatesFor Respondent: Sri.Sumer Singh Meena, CIT-DR
Section 143(2)Section 143(3)Section 71Section 92C

…the foreign exchange fluctuation loss / gain as operational in computing the operating income of both the assessee and the comparable companies. The DRP has followed the decision of the ITAT Bangalore Bench in the case of Sap Labs India P Ltd. v. ACIT (2011) 44 SOT 156, Cisco Systems Services BE in IT(TP)A No.270/Bang/2014, wherein it was held that foreign exchange fluctuation arising to the assessee on realization of trade debtors payment to creditors etc, were nothing but operational income. We, therefore, do not find any infirmity in the TPOs / DRPs finding that the foreign exchange fluctuation gain / loss as…

Novell Software Development (India) Private Limited, Bangalore vs. ITO, Bangalore

In the result, appeal filed by assessee stands allowed and appeal filed by the revenue stands dismissed

ITA 319/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 280/Bang/2016 Assessment Year : 2011-12 M/S. Micro Focus Software India Pvt. Ltd. (Earlier Known As Novell Software Development The Income Tax (India) Pvt. Ltd.), Officer, Bagmane Tech Park ‘D’ Ward – 4 (1)(3), Block, Bangalore. ‘Laurel’ 65/2, Vs. C V Raman Nagar, Byrasandra, Bangalore – 560 093. Pan: Aaacn6992K Appellant Respondent & It(Tp)A No. 319/Bang/2016 Assessment Year : 2011-12 (By Assessee) : Smt. Tanmayee Rajkumar, Assessee By Advocate : Dr. Manjunath Karkihalli, Cit Revenue By (Dr) Date Of Hearing : 03-03-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Cross Appeals Has Been Filed By Revenue As Well As Assessee Against Order Dated 29.12.2015 Passed By Ld.Ito Ward 5(1)(1)

Section 143(3)Section 144C(13)Section 92C(3)

…isions of various Benches of ITAT that foreign exchange gain, to the extent it relates to or connected with the business for which ALP is determined, is to be regarded as operating revenue or loss as the case may be. In the case of SAP Labs India (Pvt.) Ltd. [6 ITR (Trib) 81] and Trilogy E Business Software India (Pvt.) Ltd. vs. DCIT [(2011) 12 taxmann.com 464], which decisions have subsequently been consistently followed by this Tribunal, lays down the proposition that foreign exchange gain or loss has to be regarded as operating revenue or loss. The learned DR however brought to our notice a decision of the ITA…

ITO Ward - 5(1)(1), Bangalore vs. M/S Novell Software Development (India) Pvt. Ltd., Bangalore

In the result, appeal filed by assessee stands allowed and appeal filed by the revenue stands dismissed

ITA 280/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 280/Bang/2016 Assessment Year : 2011-12 M/S. Micro Focus Software India Pvt. Ltd. (Earlier Known As Novell Software Development The Income Tax (India) Pvt. Ltd.), Officer, Bagmane Tech Park ‘D’ Ward – 4 (1)(3), Block, Bangalore. ‘Laurel’ 65/2, Vs. C V Raman Nagar, Byrasandra, Bangalore – 560 093. Pan: Aaacn6992K Appellant Respondent & It(Tp)A No. 319/Bang/2016 Assessment Year : 2011-12 (By Assessee) : Smt. Tanmayee Rajkumar, Assessee By Advocate : Dr. Manjunath Karkihalli, Cit Revenue By (Dr) Date Of Hearing : 03-03-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Cross Appeals Has Been Filed By Revenue As Well As Assessee Against Order Dated 29.12.2015 Passed By Ld.Ito Ward 5(1)(1)

Section 143(3)Section 144C(13)Section 92C(3)

…isions of various Benches of ITAT that foreign exchange gain, to the extent it relates to or connected with the business for which ALP is determined, is to be regarded as operating revenue or loss as the case may be. In the case of SAP Labs India (Pvt.) Ltd. [6 ITR (Trib) 81] and Trilogy E Business Software India (Pvt.) Ltd. vs. DCIT [(2011) 12 taxmann.com 464], which decisions have subsequently been consistently followed by this Tribunal, lays down the proposition that foreign exchange gain or loss has to be regarded as operating revenue or loss. The learned DR however brought to our notice a decision of the ITA…

M/S. Transworld Ict Solutions (P) Ltd., Bangalore vs. DCIT, Bangalore

In the result, the appeal for Assessment Year 2005-06 is partly allowed

ITA 1308/BANG/2010[2005-06]Status: DisposedITAT Bangalore11 Mar 2022AY 2005-06

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.1305 To 1308/Bang/2010 Assessment Years : 2002-03, 2003-04, 2004-05, 2005-06 Dcit, M/S. Transworld Ict Solutions Pvt. Ltd., Vs. No.15, Hoody, Whitefield Road, Central Circle – 2(1), Mahadevapura Road, Bengaluru. Bengaluru – 560 048. Pan : Aabct 3824 F Assessee Respondent Assessee By : Shri. G. S. Prashanth, Ca Revenue By : Shri. Dilip, Advocate, Standing Counsel For Department Date Of Hearing : 03.03.2022 Date Of Pronouncement : 11.03.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. G. S. Prashanth, CAFor Respondent: Shri. Dilip, Advocate, Standing Counsel for Department
Section 132Section 143(3)Section 153ASection 92C(2)

…0 Page 17 of 56 functionally comparable. The 6 companies seeks to exclude on the basis of functional comparability are as follows: (i) Infotech Enterprises : As far as this company is concerned, this Tribunal in the case SAP Labs India Ltd., Vs. ACIT (2011) 44 SOT 156 (Bengaluru) a case in which the Assessee was a software development company such as the assessee in this appeal. The said decision was rendered for Assessment Year 2003-04. The tribunal took the view that the functions of Infotech Enterprises are different and that the said company operated in several segments, GIS Services, Engineering Services a…

M/S. Transworld Ict Solutions (P) Ltd., Bangalore vs. DCIT, Bangalore

In the result, the appeal for Assessment Year 2005-06 is partly allowed

ITA 1307/BANG/2010[2004-05]Status: DisposedITAT Bangalore11 Mar 2022AY 2004-05

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.1305 To 1308/Bang/2010 Assessment Years : 2002-03, 2003-04, 2004-05, 2005-06 Dcit, M/S. Transworld Ict Solutions Pvt. Ltd., Vs. No.15, Hoody, Whitefield Road, Central Circle – 2(1), Mahadevapura Road, Bengaluru. Bengaluru – 560 048. Pan : Aabct 3824 F Assessee Respondent Assessee By : Shri. G. S. Prashanth, Ca Revenue By : Shri. Dilip, Advocate, Standing Counsel For Department Date Of Hearing : 03.03.2022 Date Of Pronouncement : 11.03.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. G. S. Prashanth, CAFor Respondent: Shri. Dilip, Advocate, Standing Counsel for Department
Section 132Section 143(3)Section 153ASection 92C(2)

…0 Page 17 of 56 functionally comparable. The 6 companies seeks to exclude on the basis of functional comparability are as follows: (i) Infotech Enterprises : As far as this company is concerned, this Tribunal in the case SAP Labs India Ltd., Vs. ACIT (2011) 44 SOT 156 (Bengaluru) a case in which the Assessee was a software development company such as the assessee in this appeal. The said decision was rendered for Assessment Year 2003-04. The tribunal took the view that the functions of Infotech Enterprises are different and that the said company operated in several segments, GIS Services, Engineering Services a…

M/S. Transworld Ict Solutions (P) Ltd., Bangalore vs. DCIT, Bangalore

In the result, the appeal for Assessment Year 2005-06 is partly allowed

ITA 1306/BANG/2010[2003-04]Status: DisposedITAT Bangalore11 Mar 2022AY 2003-04

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.1305 To 1308/Bang/2010 Assessment Years : 2002-03, 2003-04, 2004-05, 2005-06 Dcit, M/S. Transworld Ict Solutions Pvt. Ltd., Vs. No.15, Hoody, Whitefield Road, Central Circle – 2(1), Mahadevapura Road, Bengaluru. Bengaluru – 560 048. Pan : Aabct 3824 F Assessee Respondent Assessee By : Shri. G. S. Prashanth, Ca Revenue By : Shri. Dilip, Advocate, Standing Counsel For Department Date Of Hearing : 03.03.2022 Date Of Pronouncement : 11.03.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. G. S. Prashanth, CAFor Respondent: Shri. Dilip, Advocate, Standing Counsel for Department
Section 132Section 143(3)Section 153ASection 92C(2)

…0 Page 17 of 56 functionally comparable. The 6 companies seeks to exclude on the basis of functional comparability are as follows: (i) Infotech Enterprises : As far as this company is concerned, this Tribunal in the case SAP Labs India Ltd., Vs. ACIT (2011) 44 SOT 156 (Bengaluru) a case in which the Assessee was a software development company such as the assessee in this appeal. The said decision was rendered for Assessment Year 2003-04. The tribunal took the view that the functions of Infotech Enterprises are different and that the said company operated in several segments, GIS Services, Engineering Services a…

M/S. Transworld Ict Solutions (P) Ltd., Bangalore vs. DCIT, Bangalore

In the result, the appeal for Assessment Year 2005-06 is partly allowed

ITA 1305/BANG/2010[2002-03]Status: DisposedITAT Bangalore11 Mar 2022AY 2002-03

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.1305 To 1308/Bang/2010 Assessment Years : 2002-03, 2003-04, 2004-05, 2005-06 Dcit, M/S. Transworld Ict Solutions Pvt. Ltd., Vs. No.15, Hoody, Whitefield Road, Central Circle – 2(1), Mahadevapura Road, Bengaluru. Bengaluru – 560 048. Pan : Aabct 3824 F Assessee Respondent Assessee By : Shri. G. S. Prashanth, Ca Revenue By : Shri. Dilip, Advocate, Standing Counsel For Department Date Of Hearing : 03.03.2022 Date Of Pronouncement : 11.03.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. G. S. Prashanth, CAFor Respondent: Shri. Dilip, Advocate, Standing Counsel for Department
Section 132Section 143(3)Section 153ASection 92C(2)

…0 Page 17 of 56 functionally comparable. The 6 companies seeks to exclude on the basis of functional comparability are as follows: (i) Infotech Enterprises : As far as this company is concerned, this Tribunal in the case SAP Labs India Ltd., Vs. ACIT (2011) 44 SOT 156 (Bengaluru) a case in which the Assessee was a software development company such as the assessee in this appeal. The said decision was rendered for Assessment Year 2003-04. The tribunal took the view that the functions of Infotech Enterprises are different and that the said company operated in several segments, GIS Services, Engineering Services a…

Societe Generale Global Solution Centre Private Limited, Bangalore vs. DCIT, Bangalore

In the result, appeal is partly allowed

ITA 1188/BANG/2011[2007-08]Status: DisposedITAT Bangalore29 Nov 2021AY 2007-08

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.1188/Bang/2011 Assessment Year : 2007-08

For Appellant: Shri. T. Suryanarayana, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143(3)

…t if the gains relate to the rendering of the main service, the same ought to be treated as operating in nature. Reliance in this regard was placed on the following decisions: IT(TP)A No.1188/Bang/2011 Page 4 of 12 - SAP LABS India (P.) Ltd. v. ACIT ([2011] 44 SOT 156 (Bangalore) at para 42); - PCIT v. B.C. Management Services (P.) Ltd. ([2018] 89 taxmann.com 68 (Delhi), at paras 7 and 8); - PCIT v. Ameriprise India Pvt. Ltd. (Order dated 23.03.2016 passed in ITA No. 206/2016 at paras 3 and 4) The Hon’ble Delhi High Court in the case of PCIT Vs. B.C.Management Services (P) Ltd., (supra) held that foreign excha…

Capco Technologies Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, appeal of the assessee is partly allowed

ITA 204/BANG/2021[2016-17]Status: DisposedITAT Bangalore18 Nov 2021AY 2016-17

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.204/Bang/2021 Assessment Year : 2016-17 M/S. Capco Technologies Private Limited, Vs. The Deputy Commissioner Of Income Tax, Sjr I-Park, Ground Floor, Tower 2, Block Circle -2(1)(1), Phi, Ramagondanahalli, Whitefield S.O, Bengaluru. Bengaluru. Pan : Aadcc 4204 G Appellant Respondent Appellant By : Shri. Sandeep Huilgol, Advocate Respondent By : Shri. Srinivas T Bidari, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 16.11.2021 Date Of Pronouncement : 18.11.2021 O R D E R Per N. V. Vasudevan: This Appeal By The Assessee Is Directed Against The Final Order Of Assessment Dated 26.04.2021 By The National E-Assessment Centre, Delhi, (Hereinafter Referred To As The Assessing Officer, “Ao” In Short) Passed U/S.143(3) Read With Section 144C(13) Of The Income Tax Act, 1961 (Act) In Relation To Ay 2016-2017. 2. The Assessee In Engaged In The Business Of Provision Of Software Development Services (Swd Services), To Capco Group. The Assessee Is A Wholly Owned Subsidiary Of Capco Belgium Bvba, Belgium. In Terms Of The Provisions Of Sec.92-A Of The Act, The Assessee & Its It(Tp)A No.204/Bang/2021 Page 2 Of 27

For Appellant: Shri. Sandeep Huilgol, AdvocateFor Respondent: Shri. Srinivas T Bidari, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

…ain/loss were regarded as part of the operating gain or loss as the case may be. In this regard, we find that the DRP in coming to the above conclusion has rightly followed the decision of the ITAT Bangalore Bench in the case of Sap Labs India Pvt.Ltd. (2011) 44 SOT 156 (Trib.-Bang.) wherein it has been held that foreign exchange fluctuation to the extent it relates to the business of the Assessee which is subject matter of the TP adjustment should be IT(TP)A No.204/Bang/2021 Page 25 of 27 regarded as operating in nature. We find no grounds to take a different view and refuse to interfere with the order of the D…

DCIT, Bangalore vs. M/S Lam Research (India) Pvt. Ltd., Bangalore

In the result appeal by the Assessee is partly allowed and the appeal by the Revenue is dismissed

ITA 468/BANG/2016[2011-12]Status: DisposedITAT Bangalore17 Sept 2021AY 2011-12

Bench: Shri N.V. Vasudevan & Shri Chandra Poojari

For Appellant: Shri. Darpan Kirpalani, AdvocateFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Section 10ASection 143(3)Section 92

…TP)A Nos.405, 468/Bang/2016 Page 11 of 16 As the gains relate to the rendering of the main service, the same ought to be treated as operating in nature. Reliance in this regard was placed on the following decisions: - SAP LABS India (P.) Ltd. v. ACIT ([2011] 44 SOT 156 (Bangalore) at para 42); - PCIT v. B.C. Management Services (P.) Ltd. ([2018] 89 taxmann.com 68 (Delhi), at paras 7 and 8); - PCIT v. Ameriprise India Pvt. Ltd. (Order dated 23.03.2016 passed in ITA No. 206/2016 at paras 3 and 4) The learned DR reiterated the stand of the Revenue as reflected in the grounds of appeal raised by the Revenue in this…

Lam Research (India) Private Limited, Bangalore vs. DCIT, Bangalore

In the result appeal by the Assessee is partly allowed and the appeal by the Revenue is dismissed

ITA 405/BANG/2016[2011-12]Status: DisposedITAT Bangalore17 Sept 2021AY 2011-12

Bench: Shri N.V. Vasudevan & Shri Chandra Poojari

For Appellant: Shri. Darpan Kirpalani, AdvocateFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Section 10ASection 143(3)Section 92

…TP)A Nos.405, 468/Bang/2016 Page 11 of 16 As the gains relate to the rendering of the main service, the same ought to be treated as operating in nature. Reliance in this regard was placed on the following decisions: - SAP LABS India (P.) Ltd. v. ACIT ([2011] 44 SOT 156 (Bangalore) at para 42); - PCIT v. B.C. Management Services (P.) Ltd. ([2018] 89 taxmann.com 68 (Delhi), at paras 7 and 8); - PCIT v. Ameriprise India Pvt. Ltd. (Order dated 23.03.2016 passed in ITA No. 206/2016 at paras 3 and 4) The learned DR reiterated the stand of the Revenue as reflected in the grounds of appeal raised by the Revenue in this…

M/S. Flint Group India Private Limited, Gujarat vs. Deputy Commissioner of Income Tax, Circle 3(1)(1), Bengaluru

In the result, appeal by the Assessee is partly allowed for statistical purpose

ITA 2750/BANG/2017[2013-14]Status: DisposedITAT Bangalore06 Sept 2021AY 2013-14

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.2750/Bang/2017 Assessment Year : 2013-14 M/S. Flint Group India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Plot#2, Shiv Indl. Infrastructure Park, Circle -3(1)(1), Nirma Canal Road, Bengaluru. Lamdapura – 391 775 Ta Savil, District – Vododara, Gujarat. Pan : Aaaci 5639 L Appellant Respondent Appellant By : Shri. Tanmayee, Advocate Respondent By : Shri. Pradeep Kumar, Cit(Dr-Iii)(Itat), Bengaluru Date Of Hearing : 02.09.2021 Date Of Pronouncement : 06.09.2021 O R D E R Per N. V. Vasudevan: This Is An Appeal By The Assessee Against The Final Order Of The Assessment Dated 27.10.2017 Passed By The Dcit, Circle 3(1)(1), Bengaluru, U/S.143(3) Read With Sec.144C (13) Of The Income Tax Act, 1961 (Act).

For Appellant: Shri. Tanmayee, AdvocateFor Respondent: Shri. Pradeep Kumar, CIT(DR-III)(ITAT), Bengaluru
Section 143(3)Section 144CSection 92Section 92(1)Section 92C

…xchange currency has to be treated as part of the operating expenses/gain respectively. 16. We have carefully considered the rival submissions. In the context of transfer pricing, the Bangalore Bench of the Tribunal in SAP Labs India Pvt. Ltd. Vs ACIT (2011) 44 SOT 156 (Bangalore) has held that foreign exchange fluctuation gain is part of operating profit of the company and should be included in the operating revenue. In the light of above IT(TP)A No.2750/Bang/2017 Page 11 of 16 judgement, which is being followed consistently by the various Benches of ITAT, we hold that the amount of foreign exchange gain/loss…

M/S.Asm Technologies Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-1(1)(2), Bangalore

In the result, appeal of the assessee is treated as partly allowed

ITA 66/BANG/2017[2012-13]Status: DisposedITAT Bangalore30 Jun 2021AY 2012-13

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.66/Bang/2017 Assessment Year : 2012-13 M/S. Asm Technologies Ltd., Vs. Dcit, No.80/2, Lusanne Court, Circle – 1(1)(2), Richmond Road, Bengaluru. Bengaluru – 560 025. Pan : Aabca 4362 P Appellant Respondent Assessee By : Shri. Suresh Muthukrishnan, Ca Revenue By : Ms. Neera Malhotra, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 23.06.2021 Date Of Pronouncement : 30.06.2021 O R D E R Per N. V. Vasudevan

For Appellant: Shri. Suresh Muthukrishnan, CAFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 92Section 92C

…its of the claim made by the assessee is concerned, the legal position with regard to considering foreign exchange fluctuation as a part of the operating profit is well settled and it has been held in the following cases:  SAP LABS India(P.) Ltd., vs ACIT - 44 SOT 156 (Bang..) M/s.Electronics for Imaging India Pvt. Ltd. vs DCIT - IT(TP)A No.212/Bang/2015 M/s. KHF Components Pvt.Ltd vs ITO - IT(TP)A No.1748/Bang/2013 Amba Research India (P.) Ltd. vs DOT - IT(TP)A No.1376/Bang/2014 IT(TP)A No.66/Bang/2017 Page 12 of 12 19. In the aforesaid decisions, foreign exchange has been treated as the part of the opera…

The DCIT, Circle-4, Ahmedabad vs. Ghcl Limited, Ahmedabad

ITA 976/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad05 Mar 2021AY 2009-10
For Appellant: Shri S. N. Soparkar, Sr. A.R. &For Respondent: Shri Mohd. Usman, CIR-D.R. &
Section 143(2)Section 144C(2)(b)Section 144C(5)Section 14ASection 37(1)Section 92C

…nsaction. Eventually, the Special Bench held that such exchange rate gain arising from export cannot be viewed in a different shade. 4.8 In the context of transfer pricing, the Bangalore Bench of the Tribunal in SAP Lab.-; India (P.) Ltd v. Asset. C/7T20I I I 44 SOT 156/F20121 134 1TD 253/17 Laxmiinn.com 16 has held that foreign exchange fluctuation gain is part of operating profit of the company and should be included in the operating revenue. Similar view has been taken in Trilogy1 E Business Software India (P) Ltd. v. Dy. CIT 120111 47 SOT 45 (URO)/12 raxmann.com 464 (Bangalore). The Mumbai Bench of the Tribun…

Ghcl Limited, Ahmedabad vs. The Dy.CIT., Circle-4, Ahmedabad

ITA 1042/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad05 Mar 2021AY 2009-10
For Appellant: Shri S. N. Soparkar, Sr. A.R. &For Respondent: Shri Mohd. Usman, CIR-D.R. &
Section 143(2)Section 144C(2)(b)Section 144C(5)Section 14ASection 37(1)Section 92C

…nsaction. Eventually, the Special Bench held that such exchange rate gain arising from export cannot be viewed in a different shade. 4.8 In the context of transfer pricing, the Bangalore Bench of the Tribunal in SAP Lab.-; India (P.) Ltd v. Asset. C/7T20I I I 44 SOT 156/F20121 134 1TD 253/17 Laxmiinn.com 16 has held that foreign exchange fluctuation gain is part of operating profit of the company and should be included in the operating revenue. Similar view has been taken in Trilogy1 E Business Software India (P) Ltd. v. Dy. CIT 120111 47 SOT 45 (URO)/12 raxmann.com 464 (Bangalore). The Mumbai Bench of the Tribun…

Synechron Technologies Pvt.Ltd, Pune vs. Assistant Commissioner of Income-Tax, Circle - 6, Pune

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 1692/PUN/2018[2014-15]Status: DisposedITAT Pune20 Jan 2021AY 2014-15

Bench: Shri R.S.Syal, Vp & Shri Partha Sarathi Chaudhury, Jm आयकर अपीऱ सं. / Ita No. 1692/Pun/2018 नििाारण वषा / Assessment Year : 2014-15 Synechron Technologies Private Limited Cedar Building, Ascendas International, Tech Park Pune, Plot No.18, Rajiv Gandhi Infotech Park, Hinjewadi, Phase-Iii, Pune-411 057. Pan : Aaics2894R .......अऩीऱाथी / Appellant बिाम / V/S. The Assistant Commissioner Of Income Tax, Circle-6, Pune. ……प्रत्यथी / Respondent

For Appellant: Shri M.P. LohiaFor Respondent: Shri Sardar Singh Meena
Section 144C(5)Section 92C(2)

…cannot be viewed differently from sale proceeds. What is true for exports is also true for other items of expenses/income of revenue nature. 22. In the context of transfer pricing, the Bangalore Bench of the Tribunal in SAP Labs India Pvt. Ltd. Vs ACIT (2011) 44 SOT 156 (Bangalore) has held that foreign exchange fluctuation gain is part of operating profit of the company and should be included in the operating revenue. Similar view has been taken in several ITA No.2331/PUN/2017 M/s. Extentia Information Technology Pvt. Ltd. 20 decisions including Trilogy E Business Software India (P) Ltd. Vs DCIT (2011) 47 SOT 45…

Global E-Business Operations Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

In the result, the appeal of the assessee is treated as allowed

ITA 725/BANG/2017[2012-13]Status: DisposedITAT Bangalore04 Dec 2020AY 2012-13

Bench: Shri George George K. & Shri B.R. Baskaranit(Tp)A No.725/Bang/2017 Assessment Year: 2012-13

For Appellant: Shri Sarath Rao, A.RFor Respondent: Shri Sanjay Kumar, D.R
Section 143(3)

…ign exchange gain, to the extent it relates to or connected with the business for which ALP is determined, is to be regarded as operating revenue or loss as the case may be. In the case of SAP Labs India (P.) Ltd. v. Asstt. CIT [2010] 8 taxmann.com 207/[2011] 44 SOT 156 (Bang.) and Trilogy E Business Software India (P.) Ltd. v. Dy. CIT [2011] 12 taxmann.com 464/47 SOT 45 (Bang)(URO), which decisions have subsequently been consistervs followed by this Tribunal, lays down the proposition that foreign exchange gain or loss has to be regarded as IT(TP)A No. 352/Bang/2017 operating revenue or loss. The learned DR howe…