Aptean India Private Limited, Bangalore V. Assistant Commissioner Of Income Tax, Circle-1(1)(1), Bangalore

MA 193/BANG/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0103 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-11-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARITHIVEL
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. No. 193/Bang/2023 (in IT(TP)A No. 422 /Bang/2022) Assessment Year : 2017-18 M/s. Aptean India Pvt. Ltd., 1/2, 8 th Floor, Level 5, Golden Heights, 59 th C Cross Road, 4 th M Block, Rajajinagar, Bangalore – 560 010. PAN: AAACC5890M Vs. The Assistant Commissioner of Income Tax, Circle – 1(1)(1), Bangalore. APPELLANT RESPONDENT Assessee by : Smt. Tanmayee Rajkumar, Advocate Revenue by : Shri Parithivel, JCIT DR Date of Hearing : 03-11-2023 Date of Pronouncement : 08-11-2023 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present miscellaneous petition has been filed by assessee against order dated 20.01.2023 passed by this Tribunal in the above referred appeal. 2. At the outset, the Ld.AR submitted that an issue raised in Ground nos. 12 and 13 has not been addressed by this Tribunal. She submitted that the disallowance that was challenged by the Page 2 M.P. No. 193/Bang/2023 (in IT(TP)A No. 422/Bang/2022) assessee regarding payments made towards payroll processing and leased line could not be subjected to tax deduction at source was on two premises. a) That it cannot be chargeable to tax in India as Royalty or FTS which was raised in Ground no. 14 b) It was also argued that the same represents cost to cost reimbursement without there being any income element embedded therein. This issue was raised in Ground no. 13. 3. It is submitted by the Ld.AR that this Tribunal while deciding the issue in para 8.11 had only directed the Ld.AO/TPO to verify the payments based on the principles laid down by Hon’ble Supreme Court in case of Engineering Analysis Centre of Excellence (P.) Ltd. vs. CIT reported in [2021] 125 taxmann.com 42, it is in connection to whether the payments could be categorised as Royalty / FTS. 4. She submitted that nothing has been directed to the Ld.AO regarding verifying the payments to be purely in the nature of reimbursement and therefore there is a mistake apparent on record that has crept in. 5. She also submitted that a direction is necessary to be given to the Ld.AO to verify whether the payments were in the nature of reimbursement. On perusal of the record, we note that no direction has been made in respect of the above submission of the assessee which also forms part of the submissions filed by the assessee on 03.11.2022. We accordingly, in continuation to para 8.12 add following paragraphs as 8.12.1 which shall read as under: Page 3 M.P. No. 193/Bang/2023 (in IT(TP)A No. 422/Bang/2022) “8.12.1 It is submitted by the Ld.AR that the payments made by assessee are in the nature of cost to cost reimbursement without there being any income element embedded in it. She also had placed reliance on the inter company agreement between the assessee and the AE which is placed at pages 666-668 of the paper book along with sample invoices and debit notes at pages 401 – 440. Reconciliation statement at page 663 of the paper book is also relied by the Ld.AR in order to establish the payments made by assessee were in the nature of cost to cost reimbursement. The Ld.AO is directed to verify all these evidences and consider the claim in accordance with law.” The above para shall be read after para 8.12 of the impugned order. 6. Apart from the above changes, other portions of the order shall remain unchanged. In the result, the miscellaneous petition filed by the assessee stands allowed. Order pronounced in the open court on 08 th November, 2023. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 08 th November, 2023 /MS / Page 4 M.P. No. 193/Bang/2023 (in IT(TP)A No. 422/Bang/2022) Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore