BMC Software India Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 1(1), Pune

ITA 1938/PUN/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9722 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 23-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40(a)(ia); 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, PUNE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA No. 1938/PUN/2018 & 2038/PUN/2018 A.Y. 2014-15 & 2015-16 ITA No. 476/PUN/2017 & 2442/PUN/2017 A.Y. 2012-13 & 2013-14 BMC Software India Pvt. Ltd. Business Bay, Wing 1, Tower B 9 th floor, Survey No. 103, Hissa No. 2, Airport Road, Yerawada, Pune-411 06 PAN; AABCB 6110 E Appellant Vs. The Dy. CIT Cir. 1(1), Pune Respondent Appellant by : Shri Madhur Agarwal (through virtual) Respondent by : Shri Subhakanta Sahu CIT (through virtual) Date of Hearing : 06-06-2022 Date of Pronouncement : 07-06-2022 ORDER PER BENCH These appeals preferred by the assessee emanates from separate orders of the Disputes Resolution Panel-3, WZ dated 27-08-2018 for A.Y. 2014-15, dated 23-09-2019 for A.Y. 2015-16, dated 03-10-2016 for A.Y. 2012- 13 and dated 27-06-2017 for A.Y. 2013-14, passed u/s 144C(5) of the Income- tax Act, 1961 (hereinafter referred to as “the Act”) as per the grounds of appeal on record. 2. At the time of hearing, the parties agreed that the facts and circumstances of the issues involved in all these appeals are absolutely identical and similar. These cases are therefore, heard together and are disposed of by this consolidated order. 3. ITA No. 2038/PUN/2019 for A.Y. 2015016 The assessee has submitted revised/modified grounds of appeal and at the time of hearing, the ld. Counsel submitted that broadly there are three 2 ITA No. 1938/PUN/2018 and and 2038/PUN/2019 and 476 & 2442/PUN/2017 A.Y. 2014-15 & 2015-16, 2012-13 & 2013-14 BMC Software India issues for adjudication in the present appeal. The first issue is addition in respect of disallowance of Primary Rate Interface (PRI) Line charges paid to Telecom Companies amounting to Rs. 60,45,238/- on account of non- withholding of taxes. The submission of the assessee is that the subordinate authorities have erred in disallowing the charges paid to Telecom Companies such as Bharati Airtel, Tata Communications and Vodafone Cellular u/s 40(a)(ia) of the Act by treating the same as leased line charges and not appreciating the fact that the above charges were for standard PRI line charges which require no human intervention and consequently does not qualify as fees for technical services. In this regard, at the very outset, the ld. Counsel submitted that the issue is squarely covered by the decision of the Hon‟ble Jurisdictional High Court in favour of the assessee in the case of Pr. CIT-2 Vs. Lee & Murihead (P) Ltd. [2020] 119 taxmann.com 499 (Bombay). It was held by the Hon‟ble Bombay High Court as follows: “The last question (i.e. question No. (d) pertains to the disallowance u/s 40(a)(ia) of the Act on account of non-deduction of tax at source by the assessee while making payment to Vi9desh Sanchar Nigam Ltd. Towards leased line charges. On merits, the Revenue had placed reliance on a decision of this Court in case of CIT Vs. Kotak Securities Ltd. [2012] 20 taxmann.com 846/340 ITR 333 (Bom. The Tribunal however, held that the amount in question was below Rs. 10 lakhs which was a minimum monetary limit enabling the Revenue to prefer appeal against the Commissioner’s Appellate orders before the Tribunal. Revenue argues before us that the Tribunal should have seen the monetary limit of the combined appeals of the assessee as well as the Revenue arising out of the common judgment of the CIT(A) pertaining to the assessee for the same assessment year. In our opinion, this question is not required to be examined in view of the fact that the decision of this Court in case of Kotak Securities (supra) has been revised by the Supreme Court in the case of CIT Vs. Kotak Securities Ltd. [2016] 67 taxmann.com 356/239 Taxman 139/383 ITR 1 (SC). Resultantly, on the merits also, the Revenue would have no ground to succeed.” 4. Respectfully following the aforesaid decision, we direct the A.O/T.P.O to delete the addition on lease line charges from the hands of the assessee. Accordingly, this ground of appeal of the assessee is allowed. 5. The ld. Counsel thereafter submitted that the other issue in the present appeal relates to additions with respect to transfer pricing adjustments which they are not pressing. The ld. D.R raised no objection in this regard. 3 ITA No. 1938/PUN/2018 and and 2038/PUN/2019 and 476 & 2442/PUN/2017 A.Y. 2014-15 & 2015-16, 2012-13 & 2013-14 BMC Software India 6. After hearing the parties, we dismiss the grounds relating to transfer pricing adjustment additions as not pressed. 7. The ld. Counsel further submitted that there is a ground of education cess which again they are not pressing. The ld. D.R raised no objection. 8. Having heard the parties, this ground of education cess is dismissed as not pressed. 9. In the result, this appeal of the assessee is partly allowed in above terms. 10. ITA No. 1938/PUN/2018 for A.Y. 2014-15. The ld. Counsel for the assessee submitted that the only dispute in this regard is in respect of addition on account of lease line charges. We have decided the said issue in ITA No. 2038/PUN/2019 for A.Y. 2015-16. The parties agreed that the facts and circumstances are absolutely identical and similar for this year also. Therefore, our decision in ITA No. 2038/PUN/2019 shall apply mutatis mutandis to ITA No. 1938/PUN/2018. Accordingly we direct the ld. A.O/TPO to delete the addition on account of lease line charges. The ground of appeal is allowed. In the result, this appeal is allowed. 11. ITA No. 476/PUN/2017 for A.Y. 2012-13 and 2442/PUN/2017 for A.Y. 2013-14 The ld. Counsel for the assessee submitted that the first issue in both these appeals is in respect of addition on account of lease line charges. We have decided the said issue in ITA No.; 2038/PUN/2019 for A.Y. 2015-16. The parties agreed that the facts and circumstances are absolutely identical and similar for this year also. Therefore, our decision in ITA No. 2038/PUN/2019 shall apply mutatis mutandis to ITA No. 476/PUN/2017 and 2442/PUN/2017. 4 ITA No. 1938/PUN/2018 and and 2038/PUN/2019 and 476 & 2442/PUN/2017 A.Y. 2014-15 & 2015-16, 2012-13 & 2013-14 BMC Software India Accordingly we direct the ld. A.O/TPO to delete the addition on account of lease line charges. The ground of appeal is allowed. 12. The ld. Counsel thereafter submitted that the other issue in both these appeals relates to additions with respect to transfer pricing adjustments which they are not pressing. The ld. D.R raised no objection in this regard. 13. After hearing the parties, we dismiss the ground relating to transfer pricing adjustment additions as not pressed. 14. In the result, both these appeals are partly allowed in above terms. 15. In the combined result, appeal in ITA No. 1938/PUN/2018 is allowed whereas appeals in ITA No. 2038/PUN/2018, ITA No. 476/PUN/2017 and 2442/PUN/2017 are partly allowed. Order pronounced in the open Court on this 07 th day of June 2022 Sd/- sd/- (INTURI RAMA RAO) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune; Dated, the 7 th day of June 2022 Ankam Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT IT & TP Pune. 4. The DRP Panel 3, Bombay 5. D.R. ITAT „C‟ Bench 5. Guard File BY ORDER, + /// TRUE COPY Sr. Private Secretary ITAT, Pune. 5 ITA No. 1938/PUN/2018 and and 2038/PUN/2019 and 476 & 2442/PUN/2017 A.Y. 2014-15 & 2015-16, 2012-13 & 2013-14 BMC Software India 1 Draft dictated on 06-06-2022 Sr.PS/PS 2 Draft placed before author 06-06-2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on 07-06-2022 Sr.PS/PS 7 Date of uploading of order 07-06-2022 Sr.PS/PS 8 File sent to Bench Clerk 07-06-2022 Sr.PS/PS 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