Appeal details
Counselvise Citation
[2024] 101 COUNSELVISE.COM (IT) 5037 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
21 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
12-08-2024
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
C
Next Hearing Date
25-07-2024
Assessment Year
misc
Appeal Filed On
22-07-2024
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. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) Assessment Years : 2017-18 & 2018-19 M/s. InMobi Technology Services Pvt. Ltd., 7 th Floor, Block Delta, B Block, Embassy Tech Square, Kadubeesanahalli, Varthur Hobli, Bangalore – 560 103. PAN: AACCI7117F Vs. The Deputy Commissioner of Income Tax, Circle – 3(1)(1), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Bharath .L, CA Revenue by : Ms. Neera Malhotra, CIT-DR Date of Hearing : 26-07-2024 Date of Pronouncement : 13-08-2024 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present miscellaneous petitions has been filed by the assessee arising out of order dated 11.06.2024 passed by this Tribunal in the above mentioned appeals. Page 2 of 7 M.P. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) 2. The Ld.AR submitted that, certain clarifications / typographic errors have crept in the impugned order that deserves consideration, the details are as under: 1) The Ld.AR submitted that while adjudicating ground no. 9, this Tribunal directed for denovo verification in respect of the nature of services provided by the assessee to its AE based on the FAR analysis. It is submitted that this Tribunal did not specifically adjudicate considering assessee’s segmental financial information as per the observations in para 13.4 of the impugned order. We have perused the submissions of the assessee having regards to the records. 1.1) In para 15.2, grounds 6-14 was remanded to the Ld.TPO for denovo verification. This Tribunal in all the preceding paragraphs observed and recorded the arguments of the assessee on the grounds in consolidated way. In para 15.1, this Tribunal observed the recharacterisation by the Ld.TPO to be in violation of principles of natural justice. This Tribunal also noted that the FAR of the assessee in respect of the services rendered as per the service agreements deserves to be verified. In our opinion, the denovo verification amounts to readjudication of all the issues raised by the assessee in ground nos. 6-14 and therefore we do not find any merit in the submission of the assessee that Ground no. Page 3 of 7 M.P. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) 9 has not been specifically adjudicated in accordance with law. However, we may clarify that the arguments of the assessee recorded are to be considered by the Ld.TPO while readjudicating these issues. Accordingly, the first issue raised by assessee in paras 2- 4 stands partly allowed. 2) The next issue raised by the assessee in paras 5-8 of the miscellaneous petition is regarding non-adjudication of specific issue relating to ESOP cost normalisation adjustment in para 16.6 of the impugned order. We have perused the submissions of the assessee based on the records placed before us. 2.1) It is noted from the argument of the assessee in respect of the mistake alleged on this issue is that, a corresponding adjustment deserves to be made in case of comparables and that such observation has not been made in para 16.6. 2.2) We agree with the submission of the assessee has not been mentioned in para 16.6. Accordingly, in para 16.6 following is added towards the end. Page 4 of 7 M.P. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) “16.6 On the basis of the submissions advanced by the Ld.AR, ..........................verification in accordance with law. The Ld.TPO may also make necessary adjustment in respect of the comparables considering the fact that the esop adjustment would be an extraordinary event in the case of assessee alone.” Accordingly, this issue raised by assessee in paras 5-8 stands allowed. 3) The last issue raised by the assessee is in respect of non- consideration of set off of outstanding receivables and payables raised by the assessee in ground no. 20. 3.1) The Ld.AR submits that, the assessee raised the argument that the entire receivables and payables deserves to be netted off, before computing the interest on the outstanding payables due to the AE. The Ld.AR relied on the decision of Coordinate Bench of this Tribunal in case of Wipro GE Healthcare Pvt. Ltd. vs. ACIT reported in (2023) 154 taxmann.com 97, wherein there is an observation that interest should be charged on the net amount of the receivables and payables only. Page 5 of 7 M.P. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) 3.2) He submitted that while coming to such conclusion, this Tribunal relied on the decision of Bangalore Tribunal in case of ISG Novasoft Technologies Ltd. vs. DCIT reported in 128 taxmann.com 440. We have perused the arguments based on the records placed before us. 3.3) In respect of the reliance placed by the Ld.AR on the decision of this Tribunal in case of Wipro GE Healthcare Pvt. Ltd. vs. ACIT (supra), we note that the same is factually distinguishable. It is noted that this Tribunal while deciding the issues relied on ISG Novasoft Technologies Ltd. vs. DCIT (supra) which is not decided identically. We therefore do not concur with the reliance placed by this Tribunal in coming to such conclusion. 3.4) However, we do not deny that during the relevant Financial Year whatever receivable and payable that gets captured in the working capital of the assessee needs to be considered. We place reliance on the decision of Hon’ble Delhi Tribunal in case of Orange Business Services India Solutions Pvt. Ltd. vs. DCIT in ITA No. 6570/Del/2016 vide order dated 15.02.2018 which is referred in para 17.5 of the impugned order. For the invoices raised during the year, and received beyond the stipulated period of agreement which does not get captured in the working capital Page 6 of 7 M.P. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) adjustment, are the ones on which the interest are to be imputed. This specific observations has been given by this Tribunal in paras 17.7 and 17.8 of the impugned order. 3.5) We therefore do not find any reason to make any changes in the observations on this issue considered by this Tribunal. We also do not find any merit on the argument raised by the assessee on this issue and the reliance placed on the decisions are factually distinguishable. Accordingly, this issue raised in the miscellaneous petitions stands dismissed. 3. The M.P. No. 35/Bang/2024 for A.Y. 2018-19 are on identical issues and has to be followed mutatis mutandis. There is no other changes made in the impugned order dated 11.06.2024 and the result remains the same. In the result, both the miscellaneous petitions filed by the assessee stands partly allowed. Order pronounced in the open court on 13 th August, 2024. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 13 th August, 2024. /MS / Page 7 of 7 M.P. Nos. 34 & 35/Bang/2024 (in IT(TP)A Nos. 303 & 839/Bang/2022) Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore
