M/s Dell International Services India Private Limited , Bangalore V. Additional Commissioner of Income TAx (LTU) , Bangalore

MA 64/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9255 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 19-05-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Keywords: Transfer pricing
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI. A.K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P NO.64 & 65/BANG/2020 (IN IT(TP)A NO.1907 & 1971/BANG/2018) ASSESSMENT YEAR : 2008 09 M/S DELL INTERNATIONAL SERVICES INDIA PVT. LTD., (FORMERLY KNOWN AS DELL COMPUTERS INDIA PVT. LTD.,) NO.12/1, 12/2A, 13/1A, DIVYASHREE GREENS, CHALLAGHATTA VILLAGE, VARTHUR HOBLI, BENGALURU-560 071. PAN : AAACH 1925 Q VS. THE ADDL. COMMISSIONER OF INCOME-TAX, LTU, BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SMT. TANMAYEE RAJKUMAR, ADVOCATE RESPONDENT BY : SHRI PRIYADARSHI MISHRA, JCIT DATE OF HEARING : 07-08-2020 DATE OF PRONOUNCEMENT : 14-08-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT MISCELLANEOUS PETITIONS ARE FILED BY ASSESS EE, ALLEGING FOLLOWING MISTAKES APPARENT ON RECORD INAD VERTENTLY CREPT IN ORDER DATED 23/10/2019 PASSED BY THIS TRIBUNAL IN ABOVE APPEAL: PAGE 2 OF 5 M.P NOS.64 & 65/BANG/2020 (I) THE GROUND OF APPEAL NO. 11 CONTENDS FOR REJECTION OF 10 COMPANIES FROM THE LIST OF COMPARABLE COMPANIES FOR IT SERVI CES. HOWEVER, WHILE DOING SO, THE HON'BLE TRIBUNAL MISSED ADJUDIC ATING ON E-ZEST SOLUTIONS LTD. AND SOFTSOL INDIA LTD. THE GROUND OF APPEAL NO. 11. (II) THE HON'BLE TRIBUNAL MENTIONED SOFTSOL INDIA LTD. I N PARA 6 ON PAGE 12 AND AFTER PARA 11.2 ON PAGE 22 BUT MISSED PROVID ING ITS DIRECTION IN THE CAPTIONED ORDER. WITH RESPECT TO E-ZEST SOLU TIONS LTD., THE HON'BLE TRIBUNAL MENTIONED IT WHILE RE-PRODUCING TH E GROUND OF APPEAL NO. 11 OF THE PETITIONER ON PAGE 3 OF THE CA PTIONED ORDER, HOWEVER, MISSED IT FOR ADJUDICATION (III) FURTHER, THE HON'BLE TRIBUNAL HAS MENTIONED THE OPE RATING COST MARK-UP EARNED BY THE PETITIONER TO BE 14.83% ON PA GE 11 OF THE CAPTIONED ORDER. THE CORRECT OPERATING COST MARK-UP EARNED BY THE PETITIONER IS 15.58% WHICH HA S BEEN DETERMINED BY THE LEARNED TPO ON PAGE 24 OF THE ORD ER. (IV) 2.2 CORPORATE TAX GROUND - APPELLANT APPEAL - ITA 1907/BANG/2017 THE PETITIONER IN THE GROUND OF APPEAL NO. 15 AND 1 6 OF THE APPEAL HAD CHALLENGED THE ORDER OF THE LEARNED CIT(A) UPHO LDING THE ACTION OF THE LEARNED AO IN NOT ALLOWING DEDUCTION UNDER S ECTION 10A OF THE ACT ON THE ENHANCED EXPORT INCOME DETERMINED AS PER MUTUAL AGREEMENT BETWEEN THE COMPETENT AUTHORITIES ('CA') OF INDIA AND USA AND AS ACCEPTED BY THE PETITIONER. B) ALSO, THE LEARNED CIT(A) AND THE LEARNED AO ERRE D IN CONSIDERING THE SAID ENHANCEMENT OF INCOME AS TRANSFER PRICING ADJU STMENT UNDER SECTION 92C(4) OF THE ACT. THE LEARNED CIT(A) HAS E RRED IS NOT APPRECIATING THE SUBMISSIONS MADE IN THIS REGARD. (V) 2.3 CORPORATE TAX GROUND - DEPARTMENTAL APPEAL I TA 1971/BANG/2017 FURTHER, THE DEPARTMENT IN ITS GROUND OF APPEAL NO. 1 OF THE APPEAL HAS CHALLENGED THE ORDER THE LEARNED CIT(A), FOR HOLDIN G THAT FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 10A OF THE ACT , EXPENDITURE DEDUCTED FROM EXPORT TURNOVER SHOULD ALSO BE DEDUCT ED FROM TOTAL TURNOVER.) 2. LD.AR SUBMITTED THAT ABOVE ISSUES HAVE INADVERTE NTLY NOT ADJUDICATED, IN THE IMPUGNED ORDER. 3. LD.SR.DR SUBMITTED THAT, 2 COMPARABLES REFERRED IN MISCELLANEOUS PETITION HAVE NOT BEEN ADJUDICATED HO WEVER IN RESPECT OF CORPORATE ISSUES, IT WAS SUBMITTED THAT THIS TRIBUNAL WHILE DECIDING THESE ISSUES HAVE JOINTLY CONSIDERED THE GROUND RAISED BY ASSESSEE IN PARA 14-15. IT WAS SUBMITTED THAT THESE PAGE 3 OF 5 M.P NOS.64 & 65/BANG/2020 ISSUES HAVE BEEN ALLOWED BY THIS TRIBUNAL DIRECTED LD.AO TO GRANT EXEMPTION UNDER SECTION 10A. 4. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 5. WE HAVE PERUSED THE GROUNDS RAISED BY ASSESSEE A S WELL AS IMPUGNED ORDER PASSED BY HIM THIS TRIBUNAL. 6. WE NOTE THAT WHILE DEALING WITH TRANSFER PRICING ISSUES IN GROUND 11, THIS TRIBUNAL , INADVERTENTLY DID NOT ADJUDICATE COMPARABILITY OF FOLLOWING COMPARABLES WITH ASSESSE E: E-ZEST SOLUTIONS SOFTSOLE INDIA LTD 7. WE ACCORDINGLY, RECALL THIS GROUND FOR LIMITED P URPOSES OF ADJUDICATING COMPARABILITY OF E-ZEST SOLUTIONS AND SOFTSOLE INDIA LTD., WITH ASSESSEE. 8. NOW COMING TO CORPORATE TAX ISSUE ALLEDGED TO BE NOT ADJUDICATED IN ASSESSEES AS WELL AS REVENUES APPE AL. 9. IT HAS BEEN SUBMITTED THAT, THIS TRIBUNAL WHILE ADJUDICATING GROUND NO.15-16 IN ASSESSEES APPEAL, ADJUDICATED G ROUND NO. 1 OF REVENUE APPEAL. 10. WE NOTE THAT THIS TRIBUNAL RECORDS THE ARGUMENT OF LD.AR REGARDING EXPORT INCOME DETERMINED AS PER MAP AS AC CEPTED BY ASSESSEE. HOWEVER WE NOTE THAT THERE INADVERTENTLY A VIEW HAS NOT BEEN EXPRESSED IN THIS REGARD. 11. WE ALSO NOTE THAT CORPORATE GROUND IN REVENUES APPEAL THOUGH HAVE BEEN DISCUSSED, HOWEVER SINCE IT IS APP EARING UNDER GROUND 15-16 OF ASSESSEES APPEAL, CONCLUSION NEEDS TO BE ALSO MODIFIED. PAGE 4 OF 5 M.P NOS.64 & 65/BANG/2020 ACCORDINGLY, WE RECALL IMPUGNED ORDER FOR LIMITED P URPOSES OF ADJUDICATING GROUND 15-16 IN ASSESSEES APPEAL A ND GROUND NO.1 IN REVENUES APPEAL UNDER CORPORATE TAX ISSUES. IN THE RESULT, MISCELLANEOUS PETITION FILED BY ASSE SSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUG, 2020 SD/- SD/- (A.K GARODIA) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 14 TH AUG, 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 5 OF 5 M.P NOS.64 & 65/BANG/2020 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -08-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -08-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -08-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -08-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -08-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -08-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -08-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS