M/s. MetricStream Infotech (India) Private Limited, Bangalore V. Assistant Commissioner Of Income Tax, Circle- 4(1)(2), Bangalore

MA 127/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2039 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 07-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: PADAMCHAND KHINCHA
• Keywords: Transfer pricing; International transaction; Notional interest; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI. B.R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P NO.127/BANG/2020 (IN IT(TP)A NO.2347/BANG/2019) ASSESSMENT YEAR : 2015 16 M/S METRIC STREAM INFOTECH INDIA PVT. LTD., AMR TECH PARK-4B, NO.23 & 24, HONGASANDRA VILLAGE, BEGUR HOBLI, BENGALURU SOUTH TALUK, BENGALURU-560 068. PAN AACCM 4991 K VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-4(1)(2), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI PADAMCHAND KHINCHA, C.A RESPONDENT BY : SHRI PRIYADARSHI MISHRA, JCIT (DR) DATE OF HEARING : 23-10-2020 DATE OF PRONOUNCEMENT : 04-12-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT MISCELLANEOUS PETITION HAS BEEN FILED BY ASSESSEE SEEKING CERTAIN DIRECTIONS TO BE PROVIDED IN THE DE CISION GIVEN IN RESPECT OF GROUND NO.7 IN THE IMPUGNED ORDER DATED 24/04/2020. 2. LD.AR SUBMITTED THAT, ASSESSEE HAD RAISED A SPEC IFIC GROUND RELATING TO WORKING CAPITAL ADJUSTMENT IN GROUND 5 (O) ADD 6 (J) FOR PAGE 2 OF 4 M.P NO.127/BANG/2020 SOFTWARE AND SALES AND MARKETING SEGMENT RESPECTIVE LY. IT HAS ALSO BEEN POINTED OUT BY HIM THAT WHILE ARGUING GRO UND NO.7, IT WAS CONTENDED THAT ONCE WORKING CAPITAL ADJUSTMENT IS GRANTED NO SEPARATE ADJUSTMENT WOULD BE REQUIRED IN RESPECT OF NOTIONAL INTEREST AS ASSESSEE HAS USED TNMM AS MOST APPROPRI ATE METHOD. HE SUBMITTED THAT THIS TRIBUNAL HOWEVER WHI LE CONCLUDING THE ISSUE IN GROUND NO.7 HAS INADVERTENT LY NOT DIRECTED GRANTING OF WORKING CAPITAL TO ASSESSEE. I T HAS BEEN THEREFORE SUBMITTED BY LD.AR THAT, IN THE EVENT SOM E CHANGES IS MADE IN PARA 17.9 THE CONCERNED REGARDING NON-GRANT ING OF WORKING CAPITAL WOULD BE ADDRESSED. 3. LD.SR.DR DID NOT OBJECT TO THE DIRECTION IN RESP ECT OF WORKING CAPITAL ADJUSTMENT. 4. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 5. WE NOTE THAT SUBMISSIONS ADVANCED BY LD.AR ARE C ORRECT AND THERE IS A NEED TO EXPRESSLY DIRECT LD.AO/TPO T O ASSESS THE RECEIVABLES UNDER THE INTERNATIONAL TRANSACTION ON THE WORKING CAPITAL OF ASSESSEE. THIS ASPECT HAS BEEN INADVERTE NTLY MISSED OUT IN PARA 17.9. ACCORDINGLY, HENCEFORTH, PARA 17.9 SHALL BE READ AS UNDER: 17.9. IN VIEW OF THE ABOVE, WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO LEARNT AO/TPO FOR DECIDING IT I N CONFORMITY WITH THE VIEW TAKEN IN ABOVE REFERRED JU DGMENT, BASED ON THE WORKING CAPITAL OF ASSESSEE. NEEDLESS TO SAY PAGE 3 OF 4 M.P NO.127/BANG/2020 THAT ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUN ITY OF BEING HEARD IN ACCORDANCE WITH LAW. 6. WITH THE ABOVE MODIFICATION THE CONCERN OF ASSES SEE WOULD BE ADDRESSED. IN THE RESULT, PRESENT MISCELLANEOUS PETITION FILED BY ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DEC, 2020 SD/- SD/- (B.R BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 4 TH DEC, 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 4 OF 4 M.P NO.127/BANG/2020 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -12-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -12-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -12-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -12-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -12-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -12-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -12-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS