DCIT, Circle- 1(1)(2), International Taxation, New Delhi V. BBC Media Action (India) Ltd., New Delhi

ITA 7886/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9379 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I1
• Assessment Year: 2009-2010
• Appeal Filed On: 29-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY CHOUDHARY
• Keywords: Transfer pricing; International transaction; Tax effect
• Section: 195

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI I-1 BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.7886/DEL/2017 ASSESSMENT YEAR : 2009-10 DCIT, CIRCLE-1(1)(2), NEW DELHI VS BBC MEDIA ACTION (INDIA) LTD., E-21, HAUZ KHAS MARKET, NEW DELHI-110016. PAN-AADCB2196G APPELLANT RESPONDENT APPELLANT BY SH.VIJAY CHOUDHARY, SR.DR RESPONDENT BY SH.ATUL JAIN, ADV. DATE OF HEARING 15.07.2021 DATE OF PRONOUNCEMENT 15 .0 7 .2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-38, DELHI DATED 27.09.2017. THE REVENUE HAS RAISED FOLLOWING GROUND OF APPEAL:- 1. ' W HETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW TO EXCLUDE THE OTHER OPERATING EXPENSES FROM THE OPERATING COST WITHOUT CONSIDERING THE IT RULE 10B( 1)(E) WHICH CLEARLY STATES THAT THE NET PROFIT MARGIN REALIZED BY THE E NTERPRISE FROM AN INTERNATIONAL TRANSACTION ENTERED INTO WITH AN ASSO CIATED ENTERPRISE IS COMPUTED IN RELATION TO COSTS INCURRED OR SALES EFF ECTED OR ASSETS EMPLOYED OR TO BE EMPLOYED BY THE ENTERPRISE OR HAV ING REGARD TO ANY OTHER RELEVANT BASE? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) WAS JUSTIFIED IN LAW TO EXCLUDE THE REIMBURSEMENT P AYMENT FROM THE OPERATING COST NOT APPRECIATING THE FACT THAT THESE REIMBURSEMENT PAYMENT WOULD ATTRACT WITHHOLDING TAX U/ S 195 OF T HE IT ACT, 1961? ITA NO. 7886/DEL/2017 2 | P A GE 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) WAS JUSTIFIED IN LAW IN GIVING DIRECTION TO THE TPO FOR INCLUSION OF COMPARABLE M/S IDBI INTECH LTD., M/S CYBER MEDIA IN DIA ONLINE LTD. AND INDIA INFOLINE MEDIA & RESEARCH SERVICES LTD. O N ACCOUNT OF FUNCTIONAL SIMILARITY WITHOUT CONSIDERING THE DETAI LED ANALYSIS AND SPEAKING ORDER OF THE TPO, THAT THE LD. TPO HAS REJ ECTED M/S IDBI INTECH LTD. ON FUNCTIONAL DISSIMILARITY WHILE CYBER MEDIA INDIA ONLINE LTD. FAILS THE RPT FILTER AND INDIA INFOLINE MEDIA & RESEARCH SERVICES LTD. FAILS THE SERVICE FILTER APPLIED BY THE TPO IN HIS ORDER? 2. HOWEVER, LD. SR. DR FOR THE REVENUE POINTED OUT THAT THE PRESENT APPEAL IS TO BE WITHDRAWN AS THE TAX EFFECT INVOLVE D IN THE CASE IS BELOW RS.50 LACS. 3. THE CBDT VIDE CIRCULAR NO.17/2019 DATED 08.08.20 19 HAS REVISED THE MONETARY LIMIT FOR FILING THE APPEALS BEFORE TH E TRIBUNAL TO RS.50 LACS. FURTHER, CBDT VIDE LETTER DATED 20.08.2019 HAS ALSO CLARIFIED THAT CIRCULAR NO.17/2019 WOULD BE APPLICABLE TO ALL PENDING APPEA LS. IN SUCH CIRCUMSTANCES, THE PRESENT APPEAL FILED BY THE REVE NUE IN CASE OF LOW TAX EFFECT IS NOT MAINTAINABLE. 4. BEFORE PARTING, WE CLARIFY HERE THAT THE REVENUE SHALL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RE-INSTITUTION OF APPEAL, IF THE REQUISITE MATERIAL IS BROUGHT TO SHOW THAT THE APPEAL IS PROTECTED BY THE EXCEPTIONS PRESCRIBED IN PARA 10 OF THE CIRCULAR DATED 11.07.2 018. 5. IN CONCLUSION, BY APPLYING THE CBDT CIRCULAR DAT ED 08.08.2019 AND LETTER DATED 20.08.2019 (SUPRA), THE CAPTIONED APPE AL OF THE REVENUE IS DISMISSED AS WITHDRAWN/NOT PRESSED. ITA NO. 7886/DEL/2017 3 | P A GE 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRT UAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 15 TH JULY, 2021. SD/- SD/- (R.K.PANDA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIA L MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI