Telelogic India Private Limited, Bangalore V. ACIT, Bangalore

ITA 22/BANG/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9258 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 19-10-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 09-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAMALADHAR
• Assessee Lawyers: PADAMCHAND KHINCHA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER IT(TP)A NO.22/BANG/2012 ASSESSMENT YEAR : 2005-06 M/S. TELELOGIC INDIA PVT. LTD., C/O. IBM INDIA PRIVATE LIMITED, III FLOOR, SUBRAMANYA ARCADE, 12, BANNERGHATTA ROAD, BENGALURE560029. PAN: AABCT 3727 D VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-12(4), BENGALURU APPELLANT RESPONDENT ASSESSEE BY : SHRI. PADAM CHAND KHINCHA, CA REVENUE BY : SHRI. KAMALADHAR, STANDING COUNSEL DATE OF HEARING : 20.10.2016 DATE OF PRONOUNCEMENT : 29 .11.2016 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) MAINLY ASSAILING THE TP ADJUSTMENTS MADE BY THE CIT (A). THIS APPEAL WAS DISPOSED OFF BY THE TRIBUNAL VIDE ITS ORDER DATED 16.03.2016 . THEREAFTER THE ASSESSEE HAS MOVED A MISCELLANEOUS APPLICATION WITH THE SUBMISSI ON THAT GROUND NO. 5(B) REMAINS TO BE ADJUDICATED. BEING CONVINCED WITH THE CONTEN TIONS OF THE ASSESSEE, THE IT(TP)A NO.22/BANG/2012 PAGE 2 OF 4 TRIBUNAL VIDE ITS ORDER DATED 17.06.2016 DIRECTED T HE REGISTRY TO LIST THE APPEAL FOR HEARING ON A LIMITED GROUND I.E., 5(B), WHICH READS AS UNDER: THE AO/TPO ERRED IN LAW AND FACTS IN NOT ALLOWING APPROPRIATE ADJUSTMENT FOR THE SPECIFIC NON-OPERATING COSTS INCURRED BY THE AP PELLANT DURING FY 2004-05. 2. ACCORDINGLY, THE APPEAL CAME UP FOR HEARING AND THE ARGUMENTS ADVANCED BY THE PARTIES WERE HEARD ON THIS GROUND. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE TPO HAS NOT GIVEN APPROPRIATE ADJUSTMENTS FOR THE SPECIFIC NON-OPERATING COSTS IN CURRED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, THAT WHILE WORKING ALP, APPROPRIATE ADJUSTMENT ON NON- OPERATING COSTS HAS TO BE ALLOWED, HE PLACED THE RE LIANCE UPON THE FOLLOWING JUDGMENTS: II. MARKET TOOLS RESEARCH (P.) LTD VS. DCIT (2014) 43 TAXMANN.COM 195 (HYDERABAD TRIB.) III. TRANSWITCH INDIA PVT LTD VS. DCIT (2012) 21 TA XMANN.COM 257 (DEL.) IV. BRIGADE GLOBAL SERVICES (P.) LTD VS. ITO (2013) 33 TAXMANN.COM 618 (HYDERABAD TRIB.) 3. LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE TELECALLING AGREEMENT APPEARING AT PAGE NO. 192 OF THE COMPILATION AND ORDER OF THE TPO RELATING TO COMPUTATION OF PROFIT LEVEL INDICAT OR/OPERATING PROFIT/OPERATING COST AT PAGE NOS. 99 AND 100 OF THE ORDER. 4. THE LEARNED DR ON THE OTHER HAND HAS CONTENDED T HAT EXCEPT THE ORAL SUBMISSIONS, THE ASSESSEE HAS NOT FURNISHED THE DET AILS RELATING TO NON-OPERATING IT(TP)A NO.22/BANG/2012 PAGE 3 OF 4 COST INCURRED BY THE ASSESSEE DURING THE IMPUGNED F INANCIAL YEAR AND FOR WANT OF COMPLETE DETAILS, THE APPROPRIATE ADJUSTMENT WAS NO T POSSIBLE. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE APPROPRIATE ADJ USTMENT FOR THE SPECIFIC NON- OPERATING COST SHOULD BE ALLOWED TO THE ASSESSEE WH ILE COMPUTING THE OPERATING COSTS AND THE ALP, BUT FOR VERIFICATION, COMPLETE D ETAILS ARE REQUIRED TO BE PRODUCED BEFORE THE COMPETENT AUTHORITIES. 6. IN THE INSTANT CASE, THOUGH THE ASSESSEE HAS RAI SED THE SUBMISSIONS BEFORE THE TPO AND THE TPO HAD DISCUSSED THE SAME WHILE CO MPUTING THE ALP AND THE PLI BUT BEFORE THE CIT(A), NEITHER THE SPECIFIC GROUNDS IN THIS REGARD WAS RAISED NOR THE COMPLETE DETAILS FOR WHICH THE ASSESSEE WANTS AN AP PROPRIATE ADJUSTMENT WERE PLACED. SIMILAR IS THE POSITION BEFORE US AND IN T HE ABSENCE OF COMPLETE DETAILS OF NON-OPERATING COSTS IT CANNOT BE SPECIFICALLY HELD WHETHER APPROPRIATE ADJUSTMENT IS POSSIBLE OR NOT. HOWEVER, IT HAS BEEN REPEATEDLY H ELD THAT AFTER MAKING NECESSARY VERIFICATION, APPROPRIATE ADJUSTMENT FOR THE NON-OP ERATING COST SHOULD BE ALLOWED WHILE COMPUTING THE ALP. THEREFORE, WE ARE OF THE VIEW THAT LET THIS MATTER BE EXAMINED BY THE CIT(A) IN THE LIGHT OF THE DETAILS OF NON OPERATING COSTS. WE ACCORDINGLY RESTORE THE MATTER TO THE CIT(A) FOR RE -ADJUDICATION OF THE ISSUE. IT(TP)A NO.22/BANG/2012 PAGE 4 OF 4 7. IN THE RESULT, THE APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF NOVEMBER, 2016. SD/- SD/- (S. JAYARAMAN) (SUNIL KUMAR Y ADAV) ACCOUNTANT MEMBER J UDICIAL MEMBER BANGALORE. DATED: 29 TH NOVEMBER, 2016. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.