M/s AGS Customer Services I P Ltd, Pune V. Deputy Commissioner of Income-Tax, Circle 1 (1), Pune

CO 22/PUN/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2785 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-08-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 19-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

आयकर अपीलीय अधधकरण “सी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI G.D. PADMAHSHALI, AM आयकर अपील सं. / ITA No.162/PUN/2022 & C.O. No.22/PUN/2022 धनधाारण वषा / Assessment Year : 2010-11 DCIT, Circle -1(1), Pune .......अपीलाथी / Appellant बनाम / V/s. M/s. AGS Customer Services India P.Ltd., Office No.103, P3 Pentagon Magarpatta City, Hadapsar, Pune – 411 013 PAN : AAHCA1940P ......प्रत्यथी/Respondent/Cross-Objector Assessee by : Shri Ajit Kumar Jain & Shri Siddhesh Chaugule Revenue by : Shri Piyush Kumar Singh Yadav सुनवाई की तारीख / Date of Hearing : 30.08.2022 घोषणा की तारीख / Date of Pronouncement : 16.09.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This Revenue’s appeal ITA No.162/PUN/2022 with assessee’s cross objection CO No. 22/PUN/2022 for assessment year 2010-11, arise against CIT(A)-13 Pune’s order dated 30.12.2021 passed in case no.PN/CIT(A)- 13/DCIT, Cir-1(1), New Delhi/10012/2014-15/229, involving proceedings u/s. 143(3) r.w.s.144C of the Income Tax Act, 1961; in short "the Act”. Heard both the parties. Case files perused. 2 ITA No.162/PUN/2022 & C.O. No.22/PUN/2022 A.Y. : 2010-11 M/s. AGS Customer Services India P.Ltd., 2. The Revenue’s appeal ITA No. 162/PUN/2022 raises the following substantive grounds :- “1) The order of the Ld. CIT(A) is contrary to law and to the facts and circumstances of the case. 2) The Ld. CIT(A) has erred in determining the ALP of international transaction related to Business Support Services in the light of terms and conditions of the Advance Pricing Agreement (APA) applicable to AY 2011-12 to AY 2015- 16, without appreciating that the terms and conditions set out in APA cannot be applied to the assessment year AY 2010-11 which is not a apart of APA. 3) The Ld. CIT(A) has erred in determining the ALP of the international transaction related to provision of Business Support Services in the light of terms and conditions of the APA without appreciating that the terms and conditions of APA which is applicable to AY 2011-12 to AY 2015-16 cannot he applied to AY 2010-11 as it would amount to violating the provisions of sub-section(9A) to section 92CC which categorically restricts the application of APA only to 4 roll back years and not beyond. 4) The appellant craves to add, amend, alter or delete any of the above ground of appeal during the course of appellate proceedings before the Hon’ble Tribunal.” 3. It is evident that the Revenue’s sole legal ground herein challenges correctness of the CIT(A)’s action reversing assessment findings making Transfer Pricing adjustment(s) of Rs.3,51,21,912/- in assessee’s back office 3 ITA No.162/PUN/2022 & C.O. No.22/PUN/2022 A.Y. : 2010-11 M/s. AGS Customer Services India P.Ltd., support services segment. The CIT(A)’s admittedly appears to have gone by the assessee’s “advance pricing arrangement (APA)” dated 29.08.2016 with the CBDT adopting cost + 15% mark up to reverse the TPO’s arm’s length price computation coming to 20.75%. The Revenue’s case is that the said agreed mark up is applicable from FYs 2011-12 to 2014-15 whereas we are in AY 2010-11 only. 4. The assessee has drawn strong support from the CIT(A)’s detailed discussion in para 2.6 onwards that the forgoing agreed mark up would indeed carry persuasive value for all collateral purposes. 5. We have given our thoughtful consideration to the forgoing rival pleadings and find forced in the Revenue’s stand since an advance pricing agreement “APA” is applicable only for the specified time span not exceeding five consecutive previous years u/s.92CC(4) r.w. sub section (9A) of the Act. We make it clear that Chapter X in the Act is in the nature of a “SPECIAL PROVISION RELATING TO AVOIDANCE OF TAX” i.e. an anti avoidance measure introduced by the legislature. Hon’ble apex court’s recent landmark decisions PCIT V/s Wipro Ltd. (2022) 140 taxmann.com 223, Commissioner V/s Dilip Kumar & Co. 2018 (9) SCC 1(SC) FB & CIT V/s. GM Knitting Industries (P) Ltd.(2015) 376 ITR 456 (SC) have settled the law that the relevant provisions in the Act ought to be put to stricter interpretation only. Faced with this situation, we reverse the CIT(A)’s findings in issue going against sec. 92CC(4) r.w.s.(9A) of the Act (supra) and direct him to re-decide 4 ITA No.162/PUN/2022 & C.O. No.22/PUN/2022 A.Y. : 2010-11 M/s. AGS Customer Services India P.Ltd., all of the assessee’s grounds in the lower appeal afresh as per law. This Revenue’s appeal ITA No. 162/Pun/2022 is allowed for statistical purposes. 6. The assessee’s cross objection C.O. No. 22/Pun/2022 pleading therein that the CIT(A)’s ought to have decided all the relevant issues on merits; also follows the suit as the necessary corollary. Ordered accordingly. 7. To sum up, this Revenue’s appeal ITA No. 162/Pun/2022 as well as assessee’s Cross Objection C.O No. 22/Pun/2022 are allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files Order pronounced in the Open Court on this 16 th day of September, 2022. Sd/- Sd/- (G.D. PADMAHSHALI) (S.S. GODARA) लेखा सदस्य/ ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER पुणे / Pune; ददनांक / Dated : 16 th September, 2022. Ashwini 5 ITA No.162/PUN/2022 & C.O. No.22/PUN/2022 A.Y. : 2010-11 M/s. AGS Customer Services India P.Ltd., आदेश की प्रधतधलधप अग्रेधषत / Copy of the Order forwarded to : 1. अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A) -13, Pune 4. The CIT-1, Pune. 5. धवभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, “सी” बेंच, पुणे / DR, ITAT, “C” Bench, Pune. 6. गार्ा फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधधकरण, पुणे / ITAT, Pune. 6 ITA No.162/PUN/2022 & C.O. No.22/PUN/2022 A.Y. : 2010-11 M/s. AGS Customer Services India P.Ltd., S.No. Details Date Initials 1 Draft dictated on 02.09.2022 2 Draft placed before author 13.09.2022 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order