Deputy Commissioner of Income-tax, V. M/s. Symantec Software (I) Pvt. Ltd., Pune

ITA 461/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5840 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-01-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PORUS F KAKA MANISH K KANTH
• Keywords: Transfer pricing; International transaction; Tax effect
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 461 /PUN/201 6 / ASSESSMENT YEAR : 201 1 - 1 2 THE DY . COMMISSIONER OF INCOME TAX, CIRCLE - 6 , PUNE ....... / APPELLANT / V/S. M/S. SYMANTEC SOFTWARE (INDIA) PVT. LTD., EON FREE ZONE, 5 TH FLOOR, WING 1, CLUSTER B, PLOT NO.1, SURVEY NO.77, MIDC, KNOWLEDGE PARK, KHARADI, PUNE 411004 PAN : A AACV6015F / RESPONDENT . /CO NO. 29 /PUN/2018 / ASSESSMENT YEAR : 20 11 - 12 (OUT OF ITA NO. 461 /PUN/201 6 ) M/S. SYMANTEC SOFTWARE (INDIA) PVT. LTD., EON FREE ZONE, 5 TH FLOOR, WING 1, CLUSTER B, PLOT NO.1, SURVEY NO.77, MIDC, KNOWLEDGE PARK, KHARADI, PUNE 411004 PAN : AAACV6015F / CROSS OBJECT OR VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE - 6, PUNE . / RESPONDENT ASSESSEE BY : S/SHRI PORUS F. KAKA, MANISH K. KANTH AND RAJENDRA AGIWAL REVENUE BY : SHRI O.A. MAO, CIT 2 ITA NO. 461 /PUN/201 6 CO NO.29/PUN/2018 / DATE OF HEARING : 30 .0 1 .201 9 / DATE OF PRONOUNCEMENT : 30 .0 1 .201 9 / ORDER PER D. KARUNAKARA RAO, AM TH E CAPTIONED APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF DCIT , CIRCLE - 6, PUNE , DATED 2 7 - 0 1 - 201 6 FOR THE A.Y. 201 1 - 1 2 . THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS AGAINST APPEAL OF REVENUE. 2. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE COMPANY E - FILED ORIGINAL RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 74,57,07,730 / - . THE ASSESSEE COMPANY HAS UNDERTAKEN CERTAIN INTERNATIONAL TRANSACTIONS DURING THE YEAR UNDER CONSIDERATION. THE TRANSFER PRICING OFFICER (TPO) HAS MADE AN ADJUSTMENT OF RS.48,92,29,241/ - TO THE ARM'S LENGTH PRICE DETERMINED BY ASSESSEE IN RESPECT OF INTER NATIONAL TRANSACTIONS ENTERED INTO WITH ITS ASSOCIATED ENTERPRISES . AFTER CONSIDERING THE OBJECTIONS FILED BY ASSESSEE AND REMARKS OF THE TPO, T HE DISPUTE RESOLUTION PANEL (DRP) GAVE DIRECTIONS TO THE ASSESSING OFFICER FOR INCLUSION / EXCLUSION OF CERTAIN COMPARABLES . THEREAFTER, THE ASSESSING OFFICER PASSED FINAL ASSESSMENT ORDER GIVING CERTAIN RELIEF TO THE ASSESSEE UNDER SECTION 143(3) R.W.S. 144C AND 92CA OF THE ACT. AGGRIEVED WITH THE ORDER OF ASSESSING OFFICER , THE REVENUE IS IN APPEAL BEFORE US. THE ASSESSEE ALSO FILED CROSS OBJECTIONS AGAINST APPEAL OF REVENUE. 3 ITA NO. 461 /PUN/201 6 CO NO.29/PUN/2018 3 . AT THE OUTSET, LD. AR FOR THE ASSESSEE SUBMITTED THAT THE APPEAL FILED BY THE DEPARTMENT IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT . HE FURTHER SUBMITTED THAT EVEN IF ALL THE GROUNDS RAISED BY REVENUE ARE ALLOWED, THE NET TAX EFFECT WOULD BE BELOW THE MONETARY LIMIT PRESCRIBED BY CBDT VIDE NO.3 /201 8 DATED 11 TH JULY, 2018 . IN THIS REGARD, THE LD. AR FILED WRITTEN SUBMISSION, WHICH ARE EXTRACTED BELOW: THE DEPARTMENTS GROUNDS OF APPEAL RAISES THE INCLUSION / EXCLUSION OF CERTAIN COMPARABLES DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE DISPUTE RESOLUTION PANEL (DRP). ON GIVING EFFECT TO THE HONBLE DRPS ORDER, THE ENTIRE ADJUSTMENT ON TRANSFER PRICING HAS BEEN DELET ED. EVEN IF THE DEPARTMENTS APPEAL WAS TO BE ALLOWED, IN RESPECT OF THE COMPARABLES, THEY ARE AGITATING BEFORE THE HONBLE TRIBUNAL, THE ASSESSEES MARGIN FALLS WITHIN 5% RANGE PERMITTED BY LAW AND HENCE, THERE WOULD BE NO ADDITION. IN VIEW OF THIS, DEPARTMENTS APPEAL IS BARRED BY CIRCULAR NO.3 OF 2018 DATED 11 TH JULY, 2018 AS BEING BELOW THE MONETARY LIMIT OF RS.20 LAKHS BEFORE THE HONBLE TRIBUNAL. 4 . THE LD. AR SUBMITTED THAT CBDT VIDE CIRCULAR (SUPRA) HAS RAISED THE MONETARY LIMIT FOR FILING OF APPEAL BY THE DEPARTMENT BEFORE THE TRIBUNAL TO RS. 20 LAKHS, THEREFORE, THE APPEAL FILED BY THE DEPARTMENT IS NOT MAINTAINABLE. 5 . ON THE OTHER HAND, THE LD. DR FOR THE REVENU E DEFENDED THE ASSESSMENT ORDER . HOWEVER, THE L D. DR FAIRLY ADMITTED THAT THE T AX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.2 0 LAKHS . 6 . BOTH SIDES HEARD. ON GOING THROUGH THE FACTS OF THE CASE AND THE ORDERS OF THE REVENUE, T HE TOTAL TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS UNDISPUTEDLY LESS THAN RS.2 0 LAKHS. THE CBDT CIRCULAR NO. 3 /201 8 DATED 11 TH JULY, 2018 RAISED THE MONETARY LIMIT OF TAX EFFECT FOR FILING OF 4 ITA NO. 461 /PUN/201 6 CO NO.29/PUN/2018 APPEAL BY THE DEPART MENT BEFORE THE TRIBUNAL TO RS. 2 0 LAKHS. THE CIRCULAR APPLIES TO THE PENDING APPEALS OF THE DEPARTMENT BEFORE THE TRIBUNAL TOO . THUS, IN VIEW OF THE CBDT CIRCULAR , WE ARE OF THE OPINION THAT THE PRESENT APPEAL OF THE REVENUE IS LIABLE TO BE DISMISS ED ON ACCOUNT OF LOW TAX EFFECT WITHOUT GOING INTO THE MERITS OF THE CASE. 7. IN VIEW OF OUR DECISION DISMISSING THE APPEAL OF REVENUE, THE CROSS OBJECTIONS FILED BY ASSESSEE BECOME INFRUCTUOUS. 8 . IN THE RESULT, THE APPEAL OF THE REVENUE AND CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 30 TH DAY OF JANUARY , 201 9 . SD/ - SD/ - ( /V IKAS AWASTHY ) ( . / D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 30 TH JANUARY , 201 9 . GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE DRP - , MUMBAI ; 4. THE DIT (TP/IT), MUMBAI ; 5. , , BENCH A PUNE . 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE