Electronic Arts Games India Private Limited, Hyderabad, Hyderabad V. ACIT, Circle-17(1), Hyderabad, Hyderabad

MA 42/Hyd/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5779 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 25-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: HARISH SHAH; KARISHMA R PHTARPHEKAR
• Keywords: Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER M.A. NO. 42/HYD/2017 (IN ITA NO. 444/HYD/2017 ASSESSMENT YEAR: 2012-13) ELECTRONIC ARTS GAMES (INDIA) PVT. LTD., HYDERABAD. PAN AABCJ 4279Q VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 17(1), HYDERABAD. (APPLICANT) (RESPONDENT) ASSESSEE BY : SMT. KARISHMA R. PHTARPHEKAR & SHRI HARISH SHAH REVENUE BY : SMT. N. SWAPNA DATE OF HEARING : 1 1 /0 8 /2017 DATE OF PRONOUNCEMENT : 30/08/2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSE E U/S 254(2) OF THE I.T. ACT, ARISES OUT OF THE ORDER OF ITAT B BENCH, HYDERABAD BENCHES, HYDERABAD, IN ITA NO. 444/HYD/2017 DATED 28/04/2017, FOR RECTIFICATION OF MISTAKES APPARENT FROM RECORD THAT HAVE KEPT IN THE SAID ORDER. 2. IN THIS M.A. THE ASSESSEE HAS SUBMITTED THAT TH ERE ARE TWO MISTAKES APPARENT IN THE ORDER PASSED IN ITA NO. 44 4/HYD/2017, IN THE FINDINGS, THE BENCH HAS OBSERVED WHILE COMPARIN G THE FUNCTIONS OF THE ASSESSEE AND EVOKE TECHNOLOGIES PVT. LTD. AS BE LOW: 2 M.A. NO. 42/HYD/2017 ELECTRONIC ARTS GAMES (INDIA) PVT. LTD. HOWEVER, WE ARE NOT SURE WHERE THE ASSESSEE HAS G OT INFORMATION THAT THIS COMPANY INVOLVED IN ORACLE CO NSULTANCY SERVICES, MICROSOFT CONSULTANCY SERVICES, JAVA CONS ULTANCY SERVICES, IT STAFFING SOLUTIONS, ETC, WHICH WAS SUB MITTED BEFORE THE DRP. LD. AR SUBMITTED THAT, IN FACT, THESE SUBMISSIONS W ERE MADE BY LD. DR AND NOT BY THE ASSESSEE. IN SUPPORT OF THAT, SHE BROUGHT TO OUR NOTICE PARA 10 OF THE ORDER. 2.1 WITH REGARD TO SECOND MISTAKE, SHE POINTED OUT THAT THE BENCH HAS COMPARED THE EMPLOYEES COST OF THE ASSESSEE AND EVOKE TECHNOLOGIES PVT. LTD BY OBSERVING THAT ASSESSEES EMPLOYEE BENEFIT EXPENSES ARE IN HIGHER SIDE AND SHE SUBMITTED THAT THE TPO HAS ALREADY APPLIED THE FILTER BY REJECTING THE COMPANY S EMPLOYEE COST IS LESSER THAN 25% OF THE TURNOVER. SHE ALSO BROUGHT T O OUR NOTICE PAGE 6 OF THE DRP ORDER FOR THE FILTER OF REJECTING COMP ANIES WITH EMPLOYEES COST LESSER THAN 25% OF THE TURNOVER. ACC ORDINGLY, SHE PRAYED THAT BOTH THESE MISTAKES SHOULD BE RECTIFIED AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE TO INCLUDE EVOKE TEC HNOLOGIES PVT. LTD. AS A COMPARABLE COMPANY BY RELYING ON EARLIER SUBMISSIONS. 3. LD. DR SMT. N. SWAPNA, JCIT APPEARED/REPRESENTE D FROM THE DEPARTMENT. AS THIS MA INVOLVES TP PROCEEDINGS ORDI NARILY CIT-DR SHOULD APPEAR. HOWEVER, SMT. SWAPNA HAVING APPEARED FOR REVENUE, WE HAVE PROCEEDED WITH THE MATTER. 4. CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIAL FACTS ON RECORD. NO DOUBT WHILE ANALYZING THE FUNCTIONS O F THE ASSESSEE AND EVOKE TECHNOLOGIES PVT. LTD, WE OBSERVED THAT I T WAS THE SUBMISSION OF THE LD. AR, BUT, IT WAS THE SUBMISSI ONS OF THE LD. DR. HOWEVER, ON RECORD, THE ASSESSEE HAS MADE SAME SUBM ISSIONS BEFORE THE TPO WHILE OBJECTING TO INCLUSION OF EVOK E TECHNOLOGIES PVT. LTD. AS POSSIBLE COMPARABLE COMPANY AND THE SA ME OBJECTION WAS PUT FORTH BY THE LD. DRP AS WELL AS LD. DR SUBM ITTED BEFORE US. 3 M.A. NO. 42/HYD/2017 ELECTRONIC ARTS GAMES (INDIA) PVT. LTD. MOREOVER, ASSESSEE HAS DECLARED IN THE PAPER BOOK THAT THESE FUNCTIONS WERE TAKEN FROM WEB PAGE OF EVOKE TECHNOL OGIES PVT. LTD. SINCE THE DRP AND LD. DR HAVE RELIED ON THE ORIGINA L SUBMISSIONS OF THE ASSESSEE, WE ALSO OBSERVED IT AS SUBMISSION OF THE ASSESSEE. HOWEVER, THE ASSESSEE HAS ALREADY CLARIFIED THAT TH ESE INFORMATIONS WERE TAKEN FROM WEB PAGES OF M/S EVOKE TECHNOLOGIES PVT. LTD., WE WILL WITHDRAW OUR OBSERVATION. ACCORDINGLY, THE OBS ERVATION IN PARA 11 OF THE ORDER IS HEREBY WITHDRAWN. 4.1 COMING TO THE SECOND ISSUE, WE ARE IN AGREEMENT WITH THE SUBMISSIONS OF THE LD. AR SINCE THE EMPLOYEE COST F ILTER WAS ALREADY CONSIDERED BY TPO AND DRP, WE WITHDRAW THE OBSERVAT IONS MADE IN OUR ORDER. 4.2 ON CAREFUL PERUSAL OF THE DOCUMENTS AND INFORMA TION PLACED BEFORE US, WE OBSERVE THAT LD. TPO SUO-MOTO INCLUDE D EVOKE TECHNOLOGIES PVT. LTD. AS POSSIBLE COMPARABLE COMPA NY AND NO DOUBT ASSESSEE HAS OBJECTED FOR SUCH INCLUSION. WE INFER THAT ASSESSEE HAS AGREED WITH THE FINDINGS OF TPO THAT EVOKE TECHNOLO GIES PVT. LTD IS A POSSIBLE COMPARABLE COMPANY IN THE CASE OF ASSESSEE . ON CAREFUL CONSIDERATION OF THE ASSESSEES SUBMISSION THAT EVO KE TECHNOLOGIES PVT. LTD. IS IN THE BUSINESS OF SOFT WARE DEVELOPME NT ONLY AND IN THAT AY IT HAS EARNED INCOME ONLY THROUGH THIS SOURCE AN D THE COMPANY (EVOKE TECHNOLOGIES PVT. LTD.) HAS PROPERLY DECLARE D IN ITS FINANCIAL STATEMENT THAT IT IS THE ONLY SOURCE AND DID NOT EA RN ANY OTHER INCOME FROM OTHER SEGMENTS DURING THIS YEAR AND THE SAME W AS DECLARED IN SCHEDULE 19 OF THE FINANCIAL STATEMENT. CONSIDERI NG THE ABOVE OBSERVATIONS, WE ALLOW THE COMPANY EVOKE TECHNOLOGI ES PVT. LTD. AS A COMPARABLE COMPANY TO BE INCLUDED IN DETERMINING THE ALP OF THE ASSESSEE. 4 M.A. NO. 42/HYD/2017 ELECTRONIC ARTS GAMES (INDIA) PVT. LTD. 5. IN THE RESULT, MA FILED BY THE ASSESSEE IS ALLOW ED. PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2017. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED: 30 TH AUGUST, 2017. KV COPY TO:- 1) ELECTRONIC ARTS GAMES (INDIA) PVT. LTD., PLOT N O. 17, 7 TH FLOOR, VEGA BLOCK ASCENDAS IT PARK, MADHAPUR, HYDERAB AD 500 081. 2) ACIT, CIRCLE 17(1), 9 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYD. 500 004. 3) DRP, HYDERABAD 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 5) GUARD FILE