Dell International Services I P Ltd, Bangalore V. Deputy Commissioner of Income tax, Bangalore

MA 33/BANG/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5322 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAMALADAR
• Assessee Lawyers: K R VASUDEVAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER MP NO.33/BANG/2017 (IN IT (TP) A NO. 1 3 02 / BANG/20 1 0 ) (ASSESSMENT YEAR: 20 06 - 07 ) M/S.DELL INTERNATIONAL SER VICES INDIA PVT. LTD. 12/1, 12/2A, 13/1A , 3 RD FLOOR, DIVYASREE GREENS, KORAMANGALA RING ROAD, BANGALORE - 71 PA NO. AABCD 1741 M VS. PETITIONER DEPUTY COMMISSIONER OF INCOME - TAX, LTU, BANGALORE RESPONDENT PETITIONER BY : SHRI K.R .VASUDEVAN, ADVOCATE. RESPONDENT BY : SHRI KAMALADAR, STANDING COUNSEL DATE OF HEARING : 17 / 0 3 /201 7 DATE OF PRONOUNCEMENT : 31 /03 /2017 O R D E R PER I NTURI RAMA RAO, AM : THIS MP IS FILED BY THE ASSESSEE - COMPANY SEEKING MODIFICATION OF TH E ORDER PASSED BY THE TRIBUNAL IN IT (TP)A NO.1302/BANG/2010 DATED 22 /0 7 /2016 TO INCLUDE A DIRECTION TO THE AO/TPO TO DECIDE THE OBJECTIONS RAISED BY TH E ASSESSEE - COMPANY VIDE GROUND NOS.2 TO 8 PERTAINING TO APPLICATION OF VARIOUS FILTERS AND ACCEPTANCE/REJECTION OF CERTAIN COMPANIES. MP NO.33 /B/ 2017 PAGE 2 OF 3 2. WE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THIS TRIBUNAL, WHILE PASSING THE IMPUGNED ORDER VIDE PAR A.9 HAD CLEARLY HELD THAT: 9. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN APPEAL IS WHETHER THE PRICE DETERMINED UNDER MAP MECHANISM CAN BE ADOPTED EVEN IN RESPECT OF NON - MAP TRANSACTIONS. IT IS THE SUBMISSION OF THE ASSESSEE - COMPANY THAT THE SAME PRICE FIXED UNDER MAP IN RESPECT OF US AES CAN BE ADOPTED EVEN IN RESPECT OF NON - US AES. WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE CAN BE DECIDED ONLY BY THE TPO AFTER UNDERTAKING FAR ANALYSIS OF NON - US TRANSACTIONS W ITH A VIEW TO FIND OUT WHETHER THERE IS ANY DISTINCTION IN THE FACTORS INFLUENCING THE PRICE BETWEEN US AND NON - US TRANSACTIONS. EVEN IN THE DECISION RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE HON BLE TRIBUNAL HAD RENDERED A CATEGORICAL FINDI NG THAT THERE IS NO SUCH DISTINCTION. WE, THEREFORE, DIRECT THE TPO TO ADOPT THE SAME PRICE. IN THE PRESENT CASE, NO ATTEMPT HAS BEEN MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE TO BRING OUT THE SIMILARITIES OF THE FACTORS THAT INFLUENCED THE PRICE BETW EEN US AND NON - US TRANSACTIONS. IN THE ABSENCE OF THIS ANALYSIS, COMPARABILITY MAY NOT BE IN TERMS OF THE PROVISIONS OF RULE 10B(1)(2) OF THE IT RULES, 1962. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER BE RESTORED TO THE FILE OF THE TPO/A O FOR FRESH ANALYSIS ON THE LINES BETWEEN US AND NON - US TRANSACTIONS AND IF IT IS FOUND THAT FACTORS INFLUENCING THE PRICE ARE SIMILAR BETWEEN US AND NON - US TRANSACTION, THE PRICE ADOPTED FOR US TRANSACTIONS MAY BE ADOPTED FOR NON - US TRANSACTIONS ALSO. THIS TRIBUNAL IN PARA.9 OF ITS ORDER, RESTORED THE ISSUE OF COMPARABILITY OF NON - U SA TRANSACTIONS WITH THAT OF USA TRANSACTIONS TO FIND OUT SIMILARITIES OF THE FACTORS INFLUENCING PRICE BETWEEN USA AND NON - USA TRANSACTIONS. IT IS THE CONTENTION OF THE ASS ESSEE - COMPANY THAT IN CASE IT IS FOUND THAT THERE ARE NO SIMILARITIES OR FACTORS FIXING THE PRICE BETWEEN USA AND NON - USA TRANSACTIONS, THE COMPARABILITY HAS TO BE EXAMINED BY APPLYING MP NO.33 /B/ 2017 PAGE 3 OF 3 VARIOUS FILTERS UNDERTAKING FAR ANALYSIS . IN THE ABSENCE OF THIS DIREC TION, TPO MAY NOT UNDERTAKE THIS EXERCISE. WE FIND MERIT IN THE SUBMISSION OF THE ASSESSEE - COMPANY. THEREFORE , WE DIRECT THE AO/TPO TO ADJUDICATE THE ISSUE OF COMPARABILITY OF VARIOUS ENTITIES WITH THAT OF ASSESSEE - COMPANY BY APPLYING VARIOUS FILTERS UND ERTAKING FRESH FAR ANALYSIS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE OPPORTUNITY TO THE ASSESSEE - COMPANY. 3. IN THE RESULT, THE MP IS ALLOWED ON THE ABOVE LINES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2017. S D/ - S D/ - (VIJAY PAL RA O) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE D A T E D : 31 /0 3/2017 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A ) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE