The Asstt. Commissioner of Income Tax, Circle-2(1)(2), Baroda V. M/s. Talent Anywherw Services Pvt. Ltd., (Formerly Known as Quickstart Resources Management India Pvt. Ltd.), Vadodara

ITA 349/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9390 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-09-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IT(TP)A NOS. 348 & 349/AHD/2017 ACIT VS. TALENT ANYWHERE SERVICES PVT LTD ASSESSMENT YEAR: 2011-12 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR VP AND RAJPAL YADAV JM] IT(TP)A NO. 348/AHD/2017 ASSESSMENT YEAR: 2011-12 ASSISTANT COMMISSIONER OF INCOME-TAX ............ ......APPELLANT CIRCLE 2(1)(2), BARODA VS. TALENT ANYWHERE SERVICES PVT LTD ...........................RESPONDENT (FORMERLY KNOWN AS QUICKSTART RESOURCES MANAGEMENT INDIA PVT LTD), 1 ST FLOOR, VADODARA HYPER, DR. VIKRAM SARABHAI MARG, ALKAPURI, VADODARA-7 [PAN : AAAFQ 1992 C] IT(TP)A NO. 349/AHD/2017 ASSESSMENT YEAR: 2011-12 DEPUTY COMMISSIONER OF INCOME-TAX ............ ......APPELLANT CIRCLE 2(1)(2), BARODA VS. TALENT ANYWHERE SERVICES PVT LTD ...........................RESPONDENT (FORMERLY KNOWN AS QSG RESOURCES MANAGEMENT INDIA PVT LTD), 1 ST FLOOR, VADODARA HYPER, DR. VIKRAM SARABHAI MARG, ALKAPURI, VADODARA-7 [PAN : AAACQ 1629 C] APPEARANCES BY: VINOD TANWANI, FOR THE APPELLANT SANJAY R SHAH, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 24.09.2019 DATE OF PRONOUNCING THE ORDER : 24.09.2019 O R D E R PER PRAMOD KUMAR, VICE PRESIDENT : THE PRESENT TWO APPEALS, FILED BY THE ASSESSING OFF ICER, ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 18 TH / 17 TH NOVEMBER 2016 PASSED BY THE CIT(A)-2, VADODARA, IN THE RESPECTIVE CASES, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 92CA R.WS. 144C(4) OF T HE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2011-12. IT(TP)A NOS. 348 & 349/AHD/2017 ACIT VS. TALENT ANYWHERE SERVICES PVT LTD ASSESSMENT YEAR: 2011-12 PAGE 2 OF 4 2. THE GRIEVANCES RAISED BY THE ASSESSING OFFICER, WHICH ARE COMMON IN BOTH THE APPEALS, ARE AS FOLLOWS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE A.O. TO CONSIDER QUINTEGRA SOLUTION LTD., WITHOUT APPRECIATING THAT UNLIKE M/S. QUINTEGRA SOL UTION LTD., NO MERGER AND ACQUISITION EVENT HAD TAKEN PLACE IN THE CASE O F M/S. CTIL LTD. AND M/S SPY RESOURCE INDIA LTD. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) ERRED IN DIRECTING THE A.O. TO CONSIDER QUINTEGRA SOLUTION LTD AS COMPARABLE FOR DETERMINATION OF ALP WITHOUT APPR ECIATING THAT ECONOMIC CIRCUMSTANCES OF M/S. QUINTEGARA SOLUTIONS LTD WERE NOT COMPARABLE WITH THAT OF THE ASSESSEE COMPANY, SINCE IT WAS MENTIONED IN THE ANNUAL REPORT OF M/S. QUINTEGRA SOLUTION LTD . FOR A.Y. 2011-12 THAT MARGIN WERE ADVERSELY IMPACTED IN VIEW OF ACQU ISITIONS CARRIED OUT IN EARLIER FINANCIAL YEAR. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. C.I.T.(A) ERRED IN DIRECTING THE AO/TPO TO EXCLUDE THE FOREX LOSS/G AIN FROM THE OPERATING REVENUE OF BOTH COMPARABLES AND TESTED PA RTY, WITHOUT DISTINGUISHING AS TO HOW THE SAME WERE IDENTICAL TO BOTH COMPARABLES AND TESTED PARTY, AND WITHOUT APPRECIATING THAT THE TEST FOR EXCLUDING THE FOREX LOSS GAIN FROM OPERATING REVENUE VARIES FROM CASE TO CASE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. C.I.T. (A) ERRED IN DIRECTING THE AO/TPO TO EXCLUDE THE MISC. INCOME FROM THE OPERATING REVENUE OF BOTH COMPARABLES AND TESTED PARTY WITHOU T EXAMINING THE NATURE OF SUCH INCOME. 3. WHEN THESE APPEALS WERE CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE APPEALS OF THE REVENU E NEED TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE RECENT CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 WHEREBY THE MONETARY LIMITS F OR FILING THE APPEAL BY THE REVENUE BEFORE THE TRIBUNAL WAS ENHANCED FROM R S.20 LAKHS TO RS.50 LAKHS. LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMI TS THAT IN THE CASE OF QUICKSTART RESOURCE MANAGEMENT PVT LTD, THE TAX EFF ECT IS RS.46,71,280/-, WHILE IN THE CASE OF QSG RESOURCE MANAGEMENT PVT LT D, THE TAX EFFECT IS RS.44,22,457/- AND HE HAS ALSO PLACED ON RECORD THE WORKING FOR THE SAME. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITS T HAT THE AFORESAID CBDT INSTRUCTION IS APPLICABLE TO THE PENDING CASES AS W ELL. THEREFORE, THE PRESENT APPEALS OF THE REVENUE ARE LIABLE TO BE DISMISSED A S NON-MAINTAINABLE AS HELD BY THIS TRIBUNAL IN THE CASE OF ITO VS. DINESH MADHAVLAL PATEL IN ITA NO.1398/AHD/2004 FOR AY 1998-99 VIDE A CONSOLIDATE D ORDER DATED 14.08.2019. IT(TP)A NOS. 348 & 349/AHD/2017 ACIT VS. TALENT ANYWHERE SERVICES PVT LTD ASSESSMENT YEAR: 2011-12 PAGE 3 OF 4 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT INVOLVED IN EACH APPEAL IS LESS THAN THE LIM IT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. AS LEARNED COUNSEL RIGHTLY CONTENDS, THE PRESENT AP PEALS OF THE REVENUE ARE NO LONGER MAINTAINABLE IN VIEW OF THE RECENT CBDT C IRCULAR NO. 17 OF 2019 DATED 08.08.2019. THE MANDATORY LIMIT FOR CASES IN WHICH REVENUE CAN CHALLENGE THE RELIEF GRANTED BY THE CIT(A) NOW STAN DS ENHANCED TO RS.50 LAKHS. THIS CONCESSION GRANTED BY THE CENTRAL BOAR D OF DIRECT TAXES (CBDT) IS RETROSPECTIVE IN EFFECT INASMUCH AS IT APPLIES T O ALL PENDING APPEALS AS WELL. IN VIEW OF THE ABOVE POSITION, THE APPEALS FILED BY THE REVENUE ARE NO LONGER MAINTAINABLE AND MUST BE DISMISSED AS SUCH. 6. IT IS, HOWEVER, MADE CLEAR THAT ON RE-VERIFICATI ON AT THE END OF THE ASSESSING OFFICER IT COMES OUT THAT THE TAX EFFECT OF MORE THAN RS.50 LAKHS IS BEING INVOLVED IN THE APPEAL OR THE APPEAL FALLS WI THIN THE EXEMPTION CLAUSE OF THE CIRCULAR, THEN THE REVENUE WILL BE AT LIBERTY T O FILE MISCELLANEOUS APPLICATION TO RECALL THE TRIBUNAL ORDER. THE APPLI CATION SHOULD BE FILED WITHIN TIME LIMIT PRESCRIBED IN THE ACT. 7. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMIS SED DUE TO LOW TAX EFFECT. PRONOUNCED IN THE OPEN COURT TODAY ON THE 24 TH SEPTEMBER, 2019 SD/- SD/- RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (VICE PRESIDENT) AHMEDABAD, THE 24 TH DAY OF SEPTEMBER, 2019 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD IT(TP)A NOS. 348 & 349/AHD/2017 ACIT VS. TALENT ANYWHERE SERVICES PVT LTD ASSESSMENT YEAR: 2011-12 PAGE 4 OF 4 1. DATE OF DICTATION: ..LOW TAX EFFECT 24.09.201 9....... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: .... . 24.09.2019........... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: .24.09.2019....... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: ... 24.09.2019. .... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .24.09.2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER : 8. DATE OF DESPATCH OF THE ORDER: ......