Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 7676 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 8 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-08-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
22-08-2017
Assessment Year
2009-2010
Appeal Filed On
09-12-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER IT (TP) A NO.874/B/2013 (ASSESSMENT YEAR : 2008 09 ) DCIT CIRCLE 12 (3), BANGALORE APPELLA NT VS M/S SYNOPSYS INDIA PVT. LTD., RMZ INFINITY TOWER A, 4 TH & 5 TH FLOOR, MUNICIPAL NO. 3, OLD MADRAS ROAD, BENNIGANHALLI, BANGALORE 16 PAN: AABCS8847D RESPONDENT & C. O. NO. 154/B/2015 IN IT(TP) A NO. 874/B/2013 (ASSESSMENT YEARS : 2008 09) IT (TP) A NO.1576(BANG) 2014 (ASSESSMENT YEAR : 2009 10) DCIT CIRCLE 6 (1) (2), BANGALORE APPELLA NT VS M/S SYNOPSYS INDIA PVT. LTD., RMZ INFINITY TOWER A, 4 TH & 5 TH FLOOR, MUNICIPAL NO. 3, OLD MADRAS ROAD, BENNIGANHALLI, BANGALORE 16 PAN: AABCS8847D RESPONDENT & CROSS APPEAL NO.IT (TP) A NO. 1622/B/2014 (ASSESSMENT YEARS : 2009 10) ASSESSEE BY : SHRI P. K. PRASAD , ADVOCATE REVENUE BY : MS NEERA MALHOTRA, CIT DR DATE OF HEARING : 22-08-2017 DATE OF PRONOUNCEMENT : 24-08-20 17 O R D E R PER A. K. GARODIA, A. M.: THESE TWO APPEALS ARE FILED BY THE REVENUE AND THE REMAINING ONE APPEAL AND ONE C. O. ARE FILED BY THE ASSESSEE AND THESE A RE DIRECTED AGAINST TWO SEPARATE ITA NOS.874/B/2013, 1576 & 1622/B/2014 & C. O. NO. 154(B) 2015 2 ORDERS OF THE LD. CIT(A) IV, BANGALORE DATED 26-0 3-2013 FOR A. Y. 2008 09 & DATED 20.10.2014 FOR A. Y. 2009 10. ALL THESE APP EALS AND C. OS. WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN EACH YEAR BUT THE GRIEVANCES OF THE REVENUE ARE ONLY TWO IN A. Y. 2008 - 09. THE FI RST GRIEVANCE IS ABOUT THE DIRECTION OF THE LEARNED CIT (A) TO THE A.O. THAT R EIMBURSEMENT OF EXPENSES IN FOREIGN CURRENCY REDUCED BY THE A.O. FROM EXPORT TU RNOVER FOR THE PURPOSE OF COMPUTING THE DEDUCTION ALLOWABLE U/S 10A SHOULD BE REDUCED FROM TOTAL TURNOVER ALSO. THE SECOND GRIEVANCE IS ABOUT THE DIRECTION O F THE LEARNED CIT (A) TO THE A.O. THAT SOME COMPARABLES FOR COMPUTING ALP ARE TO BE E XCLUDED FROM THE FINAL LIST OF COMPARABLES ON THE BASIS OF SIZE AND TURNOVER OF TH ESE COMPANIES AND ON THE BASIS OF HIGH PROFIT MARGIN ETC. APART FROM SOME OT HER ASPECTS OF T P ADJUSTMENT. IN A. Y. 2009 10, THE REVENUE HAS ONLY ONE GRIEVA NCE TO THE EFFECT THAT THE DIRECTION OF CIT (A) TO THE A.O. THAT TELECOMMUNICA TION EXPENSES AND EXPENSES INCURRED IN FOREIGN CURRENCY REDUCED BY THE A.O. FR OM EXPORT TURNOVER FOR THE PURPOSE OF COMPUTING THE DEDUCTION ALLOWABLE U/S 10 A SHOULD BE REDUCED FROM TOTAL TURNOVER ALSO. THIS GRIEVANCE OF THE REVENUE IS COMMON IN BOTH YEARS. THE GRIEVANCES OF THE ASSESSEE IN THE C.O. FILED IN ONE YEAR AND APPEAL FILED IN A.Y. 2009 10 ARE ALSO ON VARIOUS ASPECTS OF T. P. ADJU STMENT UPHELD BY CIT 9A). 3. IN COURSE OF HEARING, BOTH SIDES AGREED THAT THE FIRST ISSUE IN THE APPEAL OF THE REVENUE IN A. Y. 2008 09 AND THE ONLY ASPECT IN ITS APPEAL FOR A. Y. 2009 10 IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMEN T OF HONBLE KARNATAKA HIGH ITA NOS.874/B/2013, 1576 & 1622/B/2014 & C. O. NO. 154(B) 2015 3 COURT RENDERED IN THE CASE OF TATA ELXSI AS REPORTE D IN 349 ITR 98. REGARDING THE SECOND ISSUE OF T P ADJUSTMENT IN THE APPEAL OF THE REVENUE IN A. Y. 2008 09 AND IN THE C.O. OF THE ASSESSEE IN A. Y. 2008 09 AND THE APPEAL OF THE ASSESSEE IN A. Y. 2009 10, BOTH SIDES AGREED THAT THE MAJOR ISSU E ABOUT EXCLUSION OF VARIOUS COMPARABLE ON THE BASIS OF SIZE AND TURNOVER OF SEVERAL COMPAN IES AND ON THE BASIS OF HIGH PROFIT MARGIN IN CASE OF SOME COMPANI ES HAS TO GO BACK TO THE FILE OF AO/TPO FOR A FRESH DECISION IN THE LIGHT OF THE JUD GMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CHRYSCAPITAL INVESTME NT ADVISORS (INDIA0 (P) LTD. VS. DCIT AS REPORTED IN 376 ITR 183 WHEREIN IT WAS HELD THAT HUGE PROFIT OR HUGE TURNOVER, IPSO FACTO DOES NOT LEAD TO THE EXCLUSION OF A COMPARABLE AND THE TPO HAS TO BE SATISFIED THAT SUCH DIFFERENCE DO NOT MAT ERIALLY AFFECT THE PRICE OR COST AND SECONDLY AN ATTEMPT SHOULD BE MADE TO MAKE REAS ONABLE ADJUSTMENT TO ELIMINATE THE MATERIAL EFFECT OF SUCH DIFFERENCES. BOTH SIDES AGREED THAT WHEN THIS MAJOR ISSUE ABOUT T P ADJUSTMENT HAS TO GO BACK, TH E ENTIRE T P ISSUE MAY BE RESTORED BACK IN BOTH YEARS FOR A FRESH DECISION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST, WE DEAL WITH THE FIRST GRIEVANCE OF THE REVENUE. IN THE CASE OF TATA ELXSI (SUPRA), HONBLE KARNATAKA HIGH COURT HAS HELD THAT TOTAL TURNOVER IS SUM TOTA L OF DOMESTIC TURNOVER AND EXPORT TURNOVER AND THEREFORE, IF AN AMOUNT IS REDU CED FROM EXPORT TURNOVER THAN THE TOTAL TURNOVER ALSO GETS REDUCED BY THE SAME AM OUNT. RESPECTFULLY FOLLOWING THIS JUDGMENT, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A) ON THIS ISSUE IN BOTH YEARS. 5. REGARDING THE T P ISSUE RAISED BY BOTH SIDES, IN VIEW OF THE FACTS DISCUSSED ABOVE, WE FEEL IT PROPER THAT THE ENTIRE T P ISSUE IS RESTORED BACK TO THE FILE OF ITA NOS.874/B/2013, 1576 & 1622/B/2014 & C. O. NO. 154(B) 2015 4 AO/TPO FOR A FRESH DECISION IN THE LIGHT OF THE JUD GMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CHRYSCAPITAL INVESTME NT ADVISORS (INDIA) (P) LTD. VS. DCIT (SUPRA) AFTER PROVIDING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. THE OTHER ASPECTS OF T P ISSUE FOR WHICH THIS JUDGM ENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CHRYSCAPITAL INVESTMENT ADV ISORS (INDIA) (P) LTD. VS. DCIT (SUPRA IS NOT RELEVANT SHOULD ALSO BE DECIDED AFRES H AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BECAUSE BEFORE DECIDING THE COMPARABLES ASPECT, VARIOUS OTHER ASPECTS OF T P IS SUE CANNOT BE DECIDED IN A PROPER MANNER. 6. IN THE RESULT, THE APPEAL OF THE REVENUE FOR A. Y. 2008 09 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVE NUE FOR A. Y. 2009 10 IS DISMISSED. THE C.O. AND APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (LALIET KUMAR) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE: D A T E D : 24.08.2017 *MS ITA NOS.874/B/2013, 1576 & 1622/B/2014 & C. O. NO. 154(B) 2015 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.
