DCIT, Bangalore V. Scicom Contact Centre Services Pvt. Ltd., Bangalore

ITA 173/BANG/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9354 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TSHERING ONGDA
• Assessee Lawyers: S RAMASUBRAMANIAN
• Keywords: Related party transaction; Transfer pricing
• Section: 92C

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH SMC, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNANT MEMBER ITA NO. 173(BANG) 2012 (ASSESSMENT YEAR : 2005 06) THE DCIT, CIRCLE 12 (3), BANGALORE APPELLANT VS M/S SCICOM CONTACT CENTRE SERVICES PVT. LIMITED, UNIT NO. 2, LEVEL 3, INNOVATOR BUILDING, INTERNATIONAL TECH PARK, WHITEFIELD ROAD, BANGALORE 560066 PAN : AAJCS3726P RESPONDENT ASSESSEE BY : SHRI S. RAMASUBRAMANIAN, C. A. REVENUE BY : SHRI TSHERING ONGDA, JCIT DATE OF HEARING : 10-08-2016 DATE OF PRONOUNCEMENT : 16-09-2016 O R D E R PER A. K. GARODIA, A.M.: THIS APPEAL IS FILED BY THE REVENUE. THIS IS DIRE CTED AGAINST THE ORDER OF LEARNED CIT (A) IV, BANGALORE DATED 30.11.2011 F OR A. Y. 2005 06. 2. THE GROUNDS RAISED ARE AS UNDER:- 1. THE ORDER OF THE LEARNED CIT (A) IN SO FAR AS IT RE LATES TO THE FOLLOWING GROUNDS IS OPPOSED TO LAW AND FACTS OF TH E CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) ERRED IN HOLDING THAT THE TPO ERRED IN NOT EXCL UDING COMPARABLES HAVING ANY RELATED PARTY TRANSACTIONS. ITA NO. 173(BANG) 2012 2 3. THE LD. CIT (A) ERRED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR A STANDARD DEDUCTION OF 5% FROM ARMS LENGTH PRICE (A LP) UNDER THE PROVISO TO SECTION 92C (2) OF THE I. T. ACT, 1961. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT (A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER AMEND AND/ OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 3. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER. 4. LEARNED AR OF THE ASSESSEE SUPPORTED THE ORDER O F CIT (A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. GROUND NO. 1,4 AND 5 ARE GENERAL AND NO SEPARATE ADJUDICATION IS CALLED FOR IN RESPECT OF THESE GROUNDS. REGARDING GROUND NO. 2, I FIND THAT THIS I S NOW A SETTLED POSITION THAT IF RELATED PARTY TRANSACTIONS (RPT) ARE ABOVE 15% OF TURNOVER THEN THE CONCERNED COMPANY IS NOT AN UNCONTROLLED COMPANY AN D THEREFORE, IT CANNOT BE CONSIDERED AS A COMPARABLE. HENCE, I MODIFY THE ORDER OF THE LEARNED CIT (A) ON THIS ISSUE AND RESTORE THIS MATTER TO THE A. O. WITH THE DIRECTION THAT HE SHOULD EXCLUDE THOSE COMPANIES WHICH ARE HAVING RPT ABOVE 15% FROM THE FINAL LIST OF COMPARABLES. REGARDING GROUND NO. 3, I FIND THAT THIS IS NOW A SETTLED POSITION THAT IF THE DIFFERENCE IN THE ALP AND THE PRICE CHARGED BY THE ASSESSEE IS BELOW +/- 5% THEN NO T P ADJUSTMENT IS TO BE MADE BUT IF IT IS MORE THAN 5% THAN THE ASSESSEE GETS NO BENEFIT AS PER PROVISO TO SECT ION 92C (2) OF THE I. T. ACT, ITA NO. 173(BANG) 2012 3 1961. I HOLD ACCORDINGLY AND THE ORDER OF CIT (A) O N THIS ISSUE IS REVERSED AND THAT OF THE A.O. IS RESTORED. GROUND NO. 3 IS A LLOWED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE: D A T E D : 16.09.2016 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE ITA NO. 173(BANG) 2012 4 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 THE SR. P. S. .. 4 DATE ON WHI CH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADE D, FURNISH THE REASON FOR DOING SO. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH TH E FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER