M/s GT Nexus Software Pvt Ltd , Bangalore V. The Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

MA 72/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4919 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 05-06-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: PADAMCHAND KHINCHA
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P NO.72/BANG/2020 IT(TP)A NO.1079/BANG/2017 ASSESSMENT YEAR : 2012 13 M/S G.T NEXUS SOFTWARE PVT. LTD., THE SIRIUS, NO.69/3, MILLERS ROAD, BENGALURU. PAN AABCB 6817 E. VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(2), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI PADAMCHAND KHINCHA, C.A RESPONDENT BY : SMT. R PREMI, JCIT (DR) DATE OF HEARING : 11-09-2020 DATE OF PRONOUNCEMENT : 16 -10-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT MISCELLANEOUS PETITION IS BEEN F ILED BY ASSESSEE SEEKING CERTAIN ALLEGED MISTAKES IN ORDER DATED 06/ 09/2019 PASSED BY THIS TRIBUNAL IN IT(TP)A NO.1079/BANG/2017. 2. IT HAS BEEN SUBMITTED BY LD.AR THAT THIS TRIBUNAL WHILE CONSIDERING COMPARABILITY OF GENESIS INTERNATIONAL CORPORATION LTD., CATEGORISED ASSESSEE QUA KPO/BPO, WHICH IS IN CONSISTENT WITH THE MATERIALS PLACED ON RECORD. HE SUBMITTED T HAT, ASSESSEE IS A SOFTWARE DEVELOPMENT SERVICE PROVIDER WHICH IS CAPTIVE OFFSHORE SOFTWARE DEVELOPER FOR ITS AE. HE THUS SUB MITTED THAT PAGE 2 OF 4 M.P NO.72/BANG/2020 CATEGORISING ASSESSEE TO BE KPO/BPO IS A MISTAKE AP PARENT ON RECORD. 3. ON THE CONTRARY LD. SENIOR DR RELIED ON THE OBSE RVATIONS OF THIS TRIBUNAL. 4. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 5. IN FUNCTION PERFORMED BY ASSESSEE, THIS TRIBUNAL NOTED THAT, THOUGH ASSESSEE IS A CAPTIVE SERVICE PROVIDER, IT I S INVOLVED IN DEVELOPING SOFTWARE CODING, UNIT TESTING, GLOBAL OP ERATIONS LIKE PRODUCT DEPLOYMENT SUPPORT, TECHNICAL SUPPORT AND IMPLEMENTATION SUPPORT. IT WAS BASED ON THSES FACTS THAT THIS TRIBUNAL CONSIDERED SUBMISSIONS ADVANCED BY LD.CIT.DR AND REMENDED COMPARABLE GENESYS INTERNATIONAL CORPORATI ON LTD TO LD.AO/TPO TO ASCERTAIN SERVICES RENDERED BY ASSESSE E. 6. WE SPECIFICALLY REFER TO VIEW EXPRESSED BY THIS TRIBUNAL IN GENESIS INTEGRATING SYSTEMS INDIA PVT.LTD., VS DCIT REPORTED IN (2012) 20 TAXMAN.COM 715 , WHEREIN, VARIOUS STAGES INVOLVED IN A SOFTWARE DEVELOPMENT WAS ANALYSED, WHICH INCLUDES S OFTWARE CONSULTANCY, SOFTWARE DEVELOPMENT AND VARIOUS OTHER VERTICALS. AS WE NOTE FROM FUNCTIONS PERFORMED BY PRESENT ASSE SSEE, IT SPECIFICALLY FALLS IN THE CATEGORY OF DEVELOPMENT O F SOFTWARE, AND THEREFORE, COMPARABLE GENESYS INTERNATIONAL WAS REM ANDED TO LD.AO/TPO, SINCE IT IS ALSO INVOLVED IN ENGINEERING SERVICES. THE REMAND WAS WITH A DIRECTION TO COMPARE FUNCTIONS PE RFORMED BY THIS COMPARABLE AND SIMILARITY IN RISKS ASSUMED AND ASSETS OWNED WITH THAT OF ASSESSEE. 7. AT THIS STAGE WE CONCUR WITH OBJECTION REGARDING CATEGORISING ASSESSEE AS KPO/BPO. HOWEVER, REMANDIN G THIS PAGE 3 OF 4 M.P NO.72/BANG/2020 COMPARABLE TO LD.AO/TPO WAS A CONSCIOUS VIEW TAKEN BY THIS TRIBUNAL . ACCORDINGLY TO THE EXTENT OF CATEGORISING ASSESSE E AS KPO/BPO UNDER SOFTWARE DEVELOPMENT SERVICES MAY BE IGNORED. WE THEREFORE RESTRICT REMAND ONLY TO THE EXTENT OF COMPARING FUNCTIONS PERFORMED BY THIS COMPARABLE WITH THAT OF ASSESSEE IN ORDER TO ASCERTAIN SIMILARITY/DISSIMILARITY IN FAR AND TO ASCERTAIN, IF IT COULD BE PART OF FINALIST OF COMPA RABLES. ACCORDINGLY, WE DELETE CATEGORISING OF ASSESSEE TO BE KPO/BPO STANDS DELETED FROM THE CONCLUSION AND THE PARAGRAP H 8 AT PAGE 14 SHALL HENCEFORTH READ AS UNDER: -------- WE HAVE ALREADY CONSIDERED HEREINABOVE VARIOUS VERTICALS IN PROCESS OF SOFTWARE DEVELOPMENT CYCLE. FAR OF PRESENT ASSESSEE, NEEDS TO BE COMPARED WITH FAR OF THIS COMPARABLE. IN THE RESULT, MISCELLANEOUS PETITION FILED BY ASSE SSSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCT, 2020. SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 16 TH OCT, 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.