Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 7571 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
22-07-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Assessment Year
2013-2014
Appeal Filed On
15-04-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKA RAN , ACCOUNTANT MEMBER MP NO.34/BAN/2019 [ I N IT(TP)A NO . 2735/BANG/2017 ] ASSESSMENT YEAR : 2013 - 14 M/S. METRICSTREAM INFOTECH (INDIA) PVT. LTD., AMR TECH PARK, 4B, NO.23& 24, HONGASSANDRA VILLAGE, BEGUR HOBLI, BENGALURU SOUTH TALUK, BENGALURU - 560 068. PAN: AACCM 4991K VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4(1)(2), BANGALORE. APP L IC ANT RESPONDENT AP P L IC ANT B Y : SHRI NARENDRA KUMAR J. JAIN, ADVOCATE RESP ONDENT BY : DR . PRADEEP KUMAR, ADD L.CI T(DR)(ITAT) , BENGALURU. DATE OF HEARING : 28 .0 6 .2019 DATE OF PRONOUNCEMENT : 22 . 0 7 . 2 0 1 9 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS IS A MISCELLANEOUS PETITION FILED BY THE ASS ESSEE U/S. 254(2) OF THE INCOME TAX ACT, 1961 (THE ACT) PRAYING FOR RECT IFICATION OF CERTAIN ALLEGEDLY APPARENT ERRORS IN THE ORDER OF THE TRIBU NAL DATED 27.2.2019 PASSED IN THE AFORESAID APPEAL BY THIS TRIBUNAL. 2. THE ONLY ISSUE THAT AROSE FOR CONSIDERATION IN T HE APPEAL BY THE REVENUE AND THE ASSESSEE WAS WITH REGARD TO DETERMI NATION OF ARM'S LENGTH PRICE (ALP) IN RESPECT OF INTERNATIONAL TRAN SACTION OF RENDERING MP NO.34/BAN/2019 PAGE 2 OF 4 SOFTWARE DEVELOPMENT SERVICES BY THE ASSESSEE TO IT S ASSOCIATED ENTERPRISE (AE) U/S. 92 OF THE ACT. 3. IN GROUND NO.13 OF THE GROUNDS OF APPEAL OF THE ASSESSEE, THE ASSESSEE PLEADED FOR INCLUSION OF CERTAIN COMPANIES IN THE LIST OF COMPARABLE COMPANIES FOR THE PURPOSE OF COMPARISON OF PROFIT MARGIN OF THE ASSESSEE WITH THAT OF COMPARABLE COMPANIES. GR .NO.13 RAISED BY THE ASSESSEE READS AS FOLLOWS: 'THE LD. AO/LEARNED TPO/HON'BLE DRP HAS GROSSLY ERR ED IN REJECTING COMPANIES THAT OUGHT TO HAVE BEEN INCLUDE D AS COMPARABLE TO THE APPELLANT: - AKSHAY SOFTWARE TECHNOLOGIES PVT. LTD. - CAT TECHNOLOGIES LTD. - CIGNITI TECHNOLOGIES LTD. - SASKEN COMMUNICATION TECHNOLOGIES LTD. - FCS SOFTWARE SOLUTIONS LTD. - LUCID SOFTWARE LTD. - MAVERIC SYSTEMS LTD. - THINKSOFT GLOBAL SERVICES LTD. - YBRANT DIGITAL LTD. 4. WHILE ADJUDICATING THE AFORESAID GROUND OF APPE AL, THE TRIBUNAL IN PARAGRAPH-15 OF ITS ORDER DEALT WITH THREE OUT OF T HE AFORESAID COMPARABLE COMPANIES AND THE MERIT OF THE ASSESSEES CLAIM FOR INCLUSION OF THESE COMPANIES AS COMPARABLE COMPANIES, VIZ., (I) LUCID SOFTWARE LTD., (II) MAVERICK SYSTEMS LTD. AND (III) THINKSOFT GLOBAL SE RVICES LTD., AS FOLLOWS: 15. IT WAS SUBMITTED THAT THE ASSESSEE SEEKS TO IN CLUDE THE FOLLOWING 3 COMPANIES VIZ., LUCID SOFTWARE LTD., MA VERICK SYSTEMS LTD. AND THINKSOFT GLOBAL SERVICES LTD. THE SE COMPANIES WERE REGARDED AS NOT COMPARABLE BY THE TPO FOR THE REASON THAT NO DATA RELATING TO RESULTS OF THESE COMPANIES WERE AV AILABLE IN THE PUBLIC DOMAIN. OUR ATTENTION WAS DRAWN BY THE LD. C OUNSEL FOR THE ASSESSEE TO PAGE NOS. 764 TO 828 OF THE ASSESSEE'S PB WHICH GIVES THE FINANCIAL RESULTS OF THESE COMPANIES AS AVAILAB LE IN THE PUBLIC MP NO.34/BAN/2019 PAGE 3 OF 4 DOMAIN. THE LIMITED REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE WAS TO REMAND TO THE TPO THE ISSUE OF CONSIDERING THESE COMPANIES AS COMPARABLE COMPANIES. 4. IT HAS BEEN POINTED OUT IN THE MP THAT THE TRIBU NAL HAVING SET OUT THE REQUEST OF THE ASSESSEE FOR REMAND HAS NOT GIVEN AN Y DIRECTION TO THE TPO TO CONSIDER THE COMPARABILITY OF THESE COMPANIES ON THE BASIS OF DATA NOW AVAILABLE IN PUBLIC DOMAIN AND NOT DOING SO IS AN A PPARENT MISTAKE FROM RECORD WHICH NEEDS TO BE RECTIFIED BY GIVING SUITAB LE DIRECTION. 5. WE HAVE CONSIDERED THE PLEA OF THE ASSESSEE IN T HE MP AND HEARD THE PARTIES. THERE WAS NO DISPUTE BY EITHER OF THE PARTIES THAT THERE IS AN APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL AND T HAT THE SAME CAN BE RECTIFIED BY GIVING APPROPRIATE DIRECTIONS TO THE T PO TO EXAMINE THE CLAIM OF THE ASSESSEE FOR INCLUSION OF THE AFORESAID COMPANI ES AS COMPARABLE COMPANIES IN THE LIGHT OF THE DATA RELATING TO THE FINANCIAL RESULTS OF THESE COMPANIES NOW AVAILABLE IN PUBLIC DOMAIN. WE ARE S ATISFIED THAT THERE IS AN APPARENT ERROR IN THE ORDER OF THE TRIBUNAL AND THE SAME NEEDS TO BE RECTIFIED BY ADDING THE FOLLOWING SENTENCE AT THE E ND OF THE EXISTING PARAGRAPH-15 OF THE TRIBUNAL, VIZ., THE PLEA OF THE ASSESSEE IS ACCEPTED AND THE ISSUE WITH REGARD TO THE COMPARABILITY OF THESE THREE COMPANIES IS SET A SIDE TO THE TPO FOR CONSIDERATION AFRESH IN THE LIGHT OF THE DATA N OW AVAILABLE IN PUBLIC DOMAIN AND BROUGHT TO OUR NOTICE BY THE ASSE SSEE. WE HOLD AND DIRECT ACCORDINGLY. 6. NO OTHER POINTS WERE URGED BEFORE US. THE MP IS ACCORDINGLY ALLOWED TO THE EXTENT INDICATED ABOVE. MP NO.34/BAN/2019 PAGE 4 OF 4 7. IN THE RESULT, THE MISCELLANEOUS PETITION BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY, 2019. SD/- SD/- ( B.R. BASKARAN ) ( N.V . VASUDEVAN ) A C COUNTANT M EMBER VICE PRESIDENT BANGALORE, DATED, THE 22 ND JULY, 2019. / D ESAI S MURTHY / COPY TO: 1. A PP LICANT 2. R ESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.
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