Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore V. M/s The Textron India Private Limited , Bangalore

ITA 113/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3731 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-11-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 18-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PRASAD
• Assessee Lawyers: M VIJAY KUMAR
• Keywords: Transfer pricing; International transaction; Retrospective amendment; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CBENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.113/BANG/2019 ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-7(1)(1), BENGALURU. VS. M/S TEXTRON INDIA PVT. LTD., FLOOR-2, B LOCK-B, TOWER-2, SEZ CAMPUS, GLOBAL VILLAGE, RVCE POST, MYLASANDRA, OFF MYSORE ROAD, BENGALURU-560 059. PAN AACCT 0118 M APPELL ANT RESPONDENT CO NO.53/BANG/2019 ASSESSMENT YEAR : 2009-10 M/S TEXTRON INDIA PVT. LTD., FLOOR-2, B LOCK-B, TOWER-2, SEZ CAMPUS, GLOBAL VILLAGE, RVCE POST, MYLASANDRA, OFF MYSORE ROAD, BENGALURU-560 059. PAN AACCT 0118 M VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-7(1)(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI A.K PRASAD, ADVOCATE RESPONDENT BY : SHRI M VIJAY KUMAR, ADDL. CIT DATE OF HEARING : 07.11.2019 DATE OF PRONOUNCEMENT : 27.11.2019 O R D E R ITA NO.113/BANG/2019 CO NO.53/BANG/2019 PAGE 2 OF 5 PER BENCH :- THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJE CTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATE D 07-11-2018 PASSED BY LD CIT(A)-7, BENGALURU AND THEY RELATE TO THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD C IT(A) IN DIRECTING EXCLUSION OF THREE COMPARABLE COMPANIES U NDER SOFTWARE DEVELOPMENT ACTIVITIES. THE ASSESSEE IS SUPPORTING THE ORDER PASSED BY LD CIT(A) IN THE CROSS OBJECTION FILED BY IT. 3. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE TAX EFFECT INVOLVED IN THE APPEAL FILED BY THE REVENUE IS LESS THAN RS.50.00 LAKHS, BEING THE NEW MONETARY LIMIT PRESCRIBED BY C BDT IN CIRCULAR NO.17/2019 DATED 08-08-2019, WHICH HAS ALSO BEEN CL ARIFIED AS HAVING RETROSPECTIVE EFFECT BY CBDT. 4. EXPLAINING FURTHER, THE LD A.R SUBMITTED TH AT THE ASSESSEE HAD ENTERED INTO INTERNATIONAL TRANSACTIONS WITH IT S ASSOCIATED ENTERPRISES (AES) AND FOR THE PURPOSE OF BENCH MARK ING, THEY WERE CLASSIFIED INTO TWO CATEGORIES, VIZ., US RELATED AND NON-US RELATED. THE ASSESSEE HAD SETTLED THE US RELATED TRANSACTIONS UNDER MAP PROCEEDINGS AND HENCE THE TRANSFER PRICIN G ADJUSTMENT MADE IN RESPECT OF US RELATED TRANSACTIONS WAS WI THDRAWN BY THE ASSESSEE BEFORE LD CIT(A). ACCORDINGLY, THE LD CIT (A) HAS PASSED THE ORDER IN RESPECT OF NON-US RELATED TRANSACTIO NS ONLY. THE TP ITA NO.113/BANG/2019 CO NO.53/BANG/2019 PAGE 3 OF 5 ADJUSTMENT MADE BY THE TPO IN RESPECT OF NON-US REL ATED TRANSACTION WAS RS.48.89 LAKHS ONLY. AFTER THE ORD ER PASSED BY LD CIT(A), THE VARIATION COMES TO RS.29.06 LAKHS ONLY. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE TAX EFFECT INVOLVED IN TH E RELIEF GRANTED BY LD CIT(A), ON WHICH THE REVENUE IS IN APPEAL, WOULD BE LESS THAN RS.50.00 LAKHS. ACCORDINGLY HE SUBMITTED THAT THE REVENUE IS PRECLUDED FOR PURSUING THIS APPEAL. 5. THE LD D.R SUBMITTED THAT THE TAX EFFECT IN VOLVED IN THIS APPEAL NEEDS TO BE CHECKED BY THE AO. ACCORDINGLY THE BENCH GRANTED TWO WEEKS TIME TO FURNISH THE DETAILS OF TA X EFFECT. HOWEVER, TILL DATE NO REPLY HAS BEEN RECEIVED FROM THE REVENUE. 6. FROM THE SUBMISSIONS MADE BY LD A.R, WE NOT ICE THAT THE TAX EFFECT INVOLVED IN THE ISSUES CONTESTED BY THE REVE NUE APPEARS TO BE LESS THAN RS.50.00 LAKHS AND HENCE, AS PER THE CBDT CIRCULAR REFERRED SUPRA, THE REVENUE IS PRECLUDED FROM PURSU ING THIS APPEAL. ACCORDINGLY WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE. HOWEVER, LIBERTY IS GIVEN TO THE REVENUE TO MOVE AP PROPRIATE APPLICATION FOR RECALL OF THIS ORDER IN ACCORDANCE WITH LAW, IF IT IS FOUND LATER THAT THE ABOVE SAID CIRCULAR IS NOT APP LICABLE TO THIS APPEAL. 7. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ONLY SUPPORTS THE ORDER OF LD CIT(A), WE DISMISS THE CROSS OBJECTION FILED BY THE ASSESSEE ALSO. ITA NO.113/BANG/2019 CO NO.53/BANG/2019 PAGE 4 OF 5 8. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2019. SD/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER SD/- (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 27TH NOVEMBER, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.113/BANG/2019 CO NO.53/BANG/2019 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX &ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED