Asst. C.I.T., Bangalore V. M/s Sonus Networks India Pvt. Ltd., Bangalore

ITA 629/BANG/2016

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7032 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMER SINGH MEENA; OSD
• Keywords: Transfer pricing; Double taxation relief
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “A”, BANGALORE Before Shri George George K, JM & Shri B.R.Baskaran, AM IT(TP)A No.629/Bang/2016 : Asst.Year 2011-2012 The Assistant Commissioner of Income Tax, Circle 6(1)(2) Bangalore v. Ribbon Communications Private Limited (formerly known as M/s.Sonus Networks India Private Limited) Crescent IV, 12 th Floor Prestige Shantineketan Business Precinct Whitefield Road Bangalore – 560 066. PAN : AALCS5706P. (Appellant) (Respondent) IT(TP)A No.683/Bang/2016 : Asst.Year 2011-2012 Ribbon Communications Private Limited (formerly known as M/s.Sonus Networks India Private Limited) Bangalore – 560 066. v. The Assistant Commissioner of Income Tax, Circle 6(1)(2) Bangalore (Appellant) (Respondent) Revenue by : Sri.Sumer Singh Meena, CIT(OSD)-DR Assessee by : Smt.Rashmi, Advocate Date of Hearing : 06.12.2021 Date of Pronouncement : 06.12.2021 O R D E R Per B.R.Baskaran, AM : The assessee has filed appeal challenging the assessment order dated 28-01-2016 passed by the AO u/s 143(3) r.w.s 144C(13) of the Act for the assessment year 2011-12 in pursuance of directions given by Ld Dispute Resolution Panel (DRP). The revenue has filed appeal challenging certain directions given by Ld DRP. 2. At the time of hearing, the Ld A.R submitted that the assessee has resolved the dispute in respect of transfer pricing addition in Software IT(TPA Nos.629 & 683/Bang/2016 M/s.Ribbon Communications Pvt.Ltd. 2 development transactions under Mutual Agreement Proceedings (MAP) under Article 27 of DTAA entered between India and USA. Accordingly, she submitted that the assessee is seeking permission of the bench to withdraw the appeal. 3. We heard Ld D.R on this submission. Having regard to the submissions made by Ld A.R, we allow the assessee to withdraw its appeal, since it has become infructuous on account of resolution of the dispute relating to transfer pricing adjustment under MAP proceedings. 4. We shall now take up the appeal filed by the revenue. The first issue relates to the correctness of granting risk adjustment to the assessee by Ld DRP. Since the entire transfer pricing dispute has been resolved under MAP proceedings, this ground of the revenue does not require to be adjudicated. Accordingly, we reject the same. 5. The next issue relates to the deduction allowed u/s 10A of the Act, i.e, whether the Ld CIT(A) was justified in holding that the expenses incurred in foreign currency is required to be reduced from both export turnover and total turnover while computing deduction u/s 10A of the Act. 6. The Ld D.R fairly agreed that this issue has since been decided by Hon’ble Supreme Court in the case of HCL Technologies Ltd (2018 (5) TMI 357) holding that the expenses should be excluded both from export turnover and turnover for the purpose of computing deduction u/s 10A of the Act. We also notice that the CBDT has issued a Circular No.4/2018 dated 14 th August, 2018 directing the department not to file appeals in respect of the above said issue. Accordingly, this ground of revenue is liable to be rejected. IT(TPA Nos.629 & 683/Bang/2016 M/s.Ribbon Communications Pvt.Ltd. 3 7. In the result, the appeal of the assessee and the appeal of revenue are dismissed. Order pronounced on this 06 th day of December, 2021. Sd/- (George George K) Sd/- (B.R.Baskaran) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore; Dated : 06 th December, 2021. Copy to : 1. The Appellant. 2. The Respondent. 3. The DRP-2, Bangalore. 4. The Pr.CIT-6, Bangalore. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore