DCIT-13(1)(1), MUMBAI V. M/S ORACLE FINANCIAL SERVICES SOFTWARE LTD., MUMBAI

ITA 3996/MUM/2019

AI Insights

This case involves cross-appeals by Oracle Financial Services Software Limited and the Assistant Commissioner of Income Tax, Mumbai, concerning several assessment years. The appeals were based on issues related to the retention of revenue by overseas subsidiaries, the benefit of +/-5% variation computed on Arm's Length Price, and various deductions under section 10A of the Income Tax Act. The Tribunal decided to follow the precedent set in a similar case for A.Y. 2008-09, where the issues were examined in detail. The Tribunal's decision was based on the principle of judicial consistency, applying the same reasoning and conclusions to the subsequent assessment years.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837749 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2019
• Other Referred Cases: Ron Tapmeyer Ltd. vs ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PANKAJ KUMAR; DR; OVERSEAS
• Assessee Lawyers: G.C. SRIVASTAVA VIRTUALLY PRESENT
• Keywords: Period of limitation; TDS; Rectification of order; Notional interest
• Section: 14A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) & SHRI GIRISH AGRAWAL, (ACCOUNTANT MEMBER) I.T.A. No. 1474/Mum/2018 Assessment Year: 2007-08 I.T.A. No. 3431/Mum/2019 Assessment Year: 2009-10 I.T.A. No. 4794/Mum/2019 Assessment Year: 2010-11 Oracle Financial Services Software Limited Oracle Park, Off Western Express Highway Goregaon(East) Mumbai - 400063 [PAN: AAACC1448B] Vs. Assistant Commissioner of Income Tax, Range 13(1)(1), Mumbai (Appellant) (Respondent) I.T.A. No. 1580/Mum/2019 Assessment Year: 2007-08 I.T.A. No. 3996/Mum/2019 Assessment Year: 2009-10 I.T.A. No. 5377/Mum/2019 Assessment Year: 2010-11 Assistant Commissioner of Income Tax, Range 13(1)(1), Mumbai Vs. Oracle Financial Services Software Limited Oracle Park, Off Western Express Highway Goregaon(East) Mumbai - 400063 [PAN: AAACC1448B] (Appellant) (Respondent) Assessee by Shri G.C. Srivastava (virtually present), AR Revenue by Shri Pankaj Kumar, CIT D/R Printed from counselvise.com Date of Hearing 29.01.2026 Date of Pronouncement 20.02.2026 ORDER Per Bench: Present cross-appeals filed by the assessee as well as the Revenue arise out of the separate orders passed by the Ld. CIT(A)-57, Mumbai [hereinafter referred to as the “Ld. CIT(A)”] for A.Ys. 2007- 08, 2009-10 and 2010-11. The date of order of Ld.CIT(A) against which the cross-appeal are filed, are as follows:- Assessment Year Order of Ld. CIT(A) Dated 2007-08 19/12/2017 2009-10 14/03/2019 2010-11 07/05/2019 2. Since common issues are involved in these appeals, they were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity. 3. At the outset, Ld. AR submitted that the issues involved in the present appeals are identical to those already heard by this by this Tribunal in the assessee’s own case for A.Y. 2008-09 in ITA No. 3432/Mum/2019, heard on 27/01/2026. He submitted that the facts and circumstances remain unchanged and no fresh material has been brought on record by the Revenue to warrant a different view. The Ld. AR therefore contended that, in the interest Printed from counselvise.com of judicial consistency, the decision of the Tribunal for A.Y. 2008- 09 may be followed and the issues raised in the present appeals be decided accordingly. The assessee was thus directed to file chart for each year highlighting the issues raised in the grounds. Accordingly, following charts summarising the Grounds issue wise raised by the assesse as well as revenue for each Assessment Years are filed which is reproduced as under:- A.Y. 2007–08 ITA No. 1474/Mum/2018 (Assessee’s Appeal) Ground No. Issue 1 General ground – Order bad in law 2 Disallowance u/s 14A – Not pressed due to smallness of amount 3 Retention of revenue by overseas subsidiaries in Singapore & Netherlands 4 Benefit of +/-5% variation computed on Arm’s Length Price 5 (Additional) Reliance on Shelf Drilling Ron Tapmeyer Ltd. vs ACIT – Withdrawn ITA No. 1580/Mum/2018 (Department Appeal) Ground No. Issue 1 Loss of units eligible u/s 10A to be set off against profits of eligible units 2 Telecommunication expenses to be reduced from export turnover while computing deduction u/s 10A 3–13 Retention of revenue by overseas subsidiaries in Singapore & Netherlands Printed from counselvise.com Ground No. Issue 14 Notional interest receivable on delayed receivables 15 Interest undercharged in respect of loan to AEs 16 & 17 General ground A.Y. 2009-10 ITA No. 3431/Mum/2019 (Assessee’s Appeal) Ground No. Issue 1 General ground – Order bad in law 2 Disallowance u/s 14A in respect of exempt interest income – Not pressed due to smallness of amount 3 Retention of revenue by overseas subsidiaries in Singapore and Netherlands 4 Benefit of +/-5% variation computed on Arm’s Length Price ITA No. 3996/Mum/2020 (Department Appeal) Ground No. Issue 1 Deduction of training income while computing deduction u/s 10A 2 Telecommunication expenses to be reduced from export turnover while computing deduction u/s 10A 3 CIT(A) not empowered to direct AO to pass rectification order u/s 155(11A) 4 CIT(A) erred in directing AO to grant additional TDS credit Printed from counselvise.com Ground No. Issue 5 Retention of revenue by overseas subsidiaries in Singapore & Netherlands 6 Notional interest receivable on delayed receivables 7 Interest undercharged in respect of loan to AEs 8 Interest charged on capital contribution treated as loan 9 Customization fees paid to AEs 10 & 11 General ground A.Y. 2010–11 ITA No. 4794/Mum/2019 (Assessee’s Appeal) Ground No. Issue 1 General ground – Order bad in law 2 Retention of revenue by overseas subsidiaries in Singapore and Netherlands 3 Benefit of +/-5% variation computed on Arm’s Length Price ITA No. 5377/Mum/2019 (Department Appeal) Ground No. Issue 1 Deduction of training income while computing deduction u/s 10A 2 Telecommunication expenses to be reduced from export turnover while computing deduction u/s 10A 3 Retention of revenue by overseas subsidiaries in Singapore & Netherlands Printed from counselvise.com Ground No. Issue 4 Notional interest receivable on delayed receivables 5 Interest undercharged in respect of loan to AEs 6 Interest charged on capital contribution treated as loan 7 & 8 General ground The Ld.AR also submitted that additional ground raised challenging validity of the final assessment order being passed beyond the period of limitation stands withdrawn vide letter dated 10/02/2026. The same is scanned and reproduced as under: Printed from counselvise.com Accordingly, additional ground raised in assessment year 2007-08 stands dismissed. 3.1. The Ld.DR fairly conceded that the issues arising in the present appeals are identical to those heard by the Tribunal in A.Y. 2008-09(supra) on 27/01/2026. He submitted that all appeals may therefore be decided in accordance with the decision of the Tribunal for A.Y. 2008-09(supra). We have heard the submissions advanced by both sides and in light of the material placed on record. 4. At the time of hearing, both the Ld. AR and the Ld. DR fairly submitted that the issues arising in the present cross appeals are identical to the appeal in assessee’s own case for A.Y. 2008–09 (supra) heard by this Tribunal on 27/01/2026, and that the decision rendered therein would apply mutatis mutandis to the years under consideration. 4.1. We find that this Tribunal, vide order dated 19.02.2026, has examined the identical issues in the assessee’s own case for A.Y. 2008–09 in considerable detail. After taking into account the submissions advanced by both sides, the findings of fact recorded and the view taken therein are respectfully followed and applied mutatis mutandis to the assessment years under consideration. 4.2. For the sake of brevity and to avoid repetition, we do not consider it necessary to reproduce the entire discussion on each issue. We shall instead refer to the relevant paragraphs of the order dated 19.02.2026 wherein all the common issues arising in the Printed from counselvise.com present appeals have been examined and adjudicated. The relevant paragraph references are set out hereinbelow: S.No. Issue Factual discussion in paras Conclusion in Paras 1. Deduction u/s 10A – inclusion of training income Discussion in para 10.1 to 11.3 11.4 2. Deduction u/s 10A – telecommunication expenses exclusion from export turnover Discussion in para 11.5 11.5 3. Computation aspects of deduction u/s 10A (export vs total turnover parity) Para 11.6 11.6 4. Retention of revenue by overseas subsidiaries (Singapore & Netherlands) Discussion in Para 8.1 to 8.8 5. Selection of tested party & TP benchmarking approach 9.4 6. Benefit of ±5% tolerance range u/s 92C(2) Discussion in para 9.5 9.6 7. Notional interest on delayed receivables from AEs Discussion in para 12.1 to 14.5 15 to 15.1 8. Interest charged in respect of Loan to AE Discussion in para 16 to18.2. 19 to 19.4. 9. Interest on capital contribution treated as loan Discussion in para 20 to 21.12 22 to 22.4 10. Customization / marketing support fees paid to AEs Discussion in para 23.1 to 25 26 to 26.2 11. Disallowance u/s 14A Discussed in Para 7 7 12. General grounds Paras 6 and 27 Paras 6 & 27 We have already tabulated hereinabove the issues which stand covered by the decision of the Coordinate Bench of this Tribunal in the assessee’s own case for A.Y. 2008–09 (supra), vide order dated 19.02.2026, which is annexed to the present order and marked as Printed from counselvise.com “Annexure – A”. For the sake of convenience and brevity, the relevant paragraphs of the said decision, dealing with the identical issues arising in the years under consideration, have been referred to in the table set out above. Accordingly, in the absence of any distinguishing facts having been brought on record by either side, the findings of fact and the conclusions recorded by the Coordinate Bench in A.Y. 2008–09 (supra) are respectfully followed and applied mutatis mutandis to the grounds raised by both the assessee and the Revenue on the common issues for the years under consideration. In the result assesse appeal stands allowed and revenue appeal stands partly allowed as indicated herein above. Order pronounced in the open court on 20/02/2026 Sd/- Sd/- (GIRISH AGRAWAL) Accountant Member (BEENA PILLAI) Judicial Member Mumbai Dated: 20/02/2026 SC Sr. P.S. Printed from counselvise.com Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "