M/s Microship Technology India Private Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-4(1)(2), Bangalore

MA 85/BANG/2021

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1899 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-08-2021
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 254(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. No. 85/Bang/2021 (in ITA No. 323/Bang/2019) Assessment Year : 2010-11 M/s. Microchip Technology (India) Pvt. Ltd., Plot No. 149-B, EPIP 1 st Phase, Industrial Area, Whitefield, Bangalore – 560 066. PAN: AABCM9868J Vs. The Deputy Commissioner of Income Tax, Circle – 4(1)(2), Bangalore. APPELLANT RESPONDENT Assessee by : Smt. Tanmayee Rajkumar, Advocate Revenue by : Sri Sankar Ganesh K., JCIT (DR) Date of Hearing : 01-10-2021 Date of Pronouncement : 04-01-2022 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present Miscellaneous petition arises out of order dated 14/06/2021 passed by this Tribunal in the above referred assessee. The Ld.AR submitted that in the order dated 14/06/2021passed by this Tribunal, certain typographic errors have crept in which is rectifiable under section 254(2) of the Act. 2. Ld.Counsel submitted that in the appeal, the assessee had, vide ground no. 5.6 sought exclusion of Asian Business Exhibition & Conferences Limited (Asian), HCCA Business Services Private Limited ('HCCA'), Hindustan Housing Co. Limited ('Hindustan') and Killick Agencies & Marketing Limited ('Killick') from the final list of companies for the MSS segment. Page 2 of 4 M.P. No. 85/Bang/2021 (in ITA No. 323/Bang/2019) 3. She further submitted that although this Hon'ble Tribunal has noted at paragraph 17 of its order that the assessee is seeking exclusion of the aforesaid four companies vide ground no. 5.6. the Hon'ble Tribunal has not adjudicated on the exclusion of two companies i.e., Asian and Hindustan. To this extent, there is a mistake apparent from the record. We have perused the submissions advanced by the Ld.Counsel in light of records placed before us. 4. The comparables Asian Business Exhibition & Conferences Ltd. and Hindustan Housing Co.Ltd., has been inadvertently missed out to be adjudicated while passing the order dated 14/06/2021. Accordingly we are adjudicating the two comparables as under: 5. Following paragraph shall be read as a part of para 17.3 of the order dated 14/06/2021. We note that these comparables have been dealt with by coordinate bench of this Tribunal in case of ARM Embedded Technologies Pvt.Ltd vs.ITO (supra) for assessment year 2010-11 by observing as under: Asian Business Exhibition and Conference Ltd., This comparable has been included by Ld.TPO which has been objected by assessee by submitting that this is functionally dissimilar with that of assessee. It has been submitted that this company is involved in organising exhibitions and sale of stall spaces holding and banners etc. Ld.Counsel placing reliance upon decision of this Tribunal in case of DCIT vs Electronics for Imaging India Pvt.Ltd (supra) and ITO vs Interwoven Software Services (India) Pvt.Ltd (supra) in support of this contention. Ld.CIT DR placed reliance upon the view expressed by Ld.TPO and objected for its exclusion. We have perused submissions advanced by both sides in the light of the records placed before us. It is observed that annual report of this company is placed at page 13561389 of company to annual reports. The financial statement at page 1367 is profit and loss account, where income earned by this company is categorised as direct income and indirect income, Page 3 of 4 M.P. No. 85/Bang/2021 (in ITA No. 323/Bang/2019) bifurcation of which has been given in schedule 12 and 13. Schedule No. 12 and 13 placed at page 1374 is amply clear that this company has earned income mainly from exhibitions and events sponsorship/promotional charges miscellaneous receipts and delegate fees. We are therefore of considered opinion that these functions are absolutely not similar to the marketing and sales function undertaken by assessee before us. In decisions relied upon by Ld.Counsel, this company has been excluded by following the view of Mumbai bench Tribunal in case of RGA services India private limited reported in (2016) 65 taxmann.com 297. Respectfully following the same we direct Ld.AO/TPO to exclude this company from the list of comparables. Hindustan Housing Company Ltd., This comparable has been included by Ld.TPO which has been objected by assessee for the reason that it is functionally different. He submitted that this company is engaged in diverse functions and has significant related party transaction to the extent of 44.2%. Ld.Counsel also submitted that income has been earned by this company by providing services like air conditioning services lifts services computer services communication services general administrative services photocopy services housekeeping services etc and are not therefore into marketing and sales support services. Ld. CIT DR submitted that Ld. CIT (A) has not discussed any of the comparables in relation to marketing and sales support service segment and he has decided only on filters. She placed reliance upon the view of Ld.AO/TPO. We have perused submissions advanced by both sides in the light of the records placed before us. It is observed that this company is functionally not at all similar with that of assessee and therefore this comparable has to be excluded at the threshold itself. Accordingly we direct this comparable to be excluded from the final list. 6. The next issue raised in regarding incorrect amount mentioned in paragraph 18.1. It is submitted that the amount Page 4 of 4 M.P. No. 85/Bang/2021 (in ITA No. 323/Bang/2019) remitted by assessee towards cost of ESSOP is 1,99,91,400. She submitted that the amount is wrongly mentioned as 19,91,400. We have perused the records and observe that the amount so mentioned in paragraph 18.1 needs to be rectified. Accordingly para 18.1 shall henceforth read as under: “18.1 The Ld.Counsel submitted that during the year under consideration assessee had remitted an amount of Rs.1,99,91,400/- to its AE representing cost of ESOP bone by a foreign insurance of stock option to the employees of assessee. It has been submitted that the claim was raised by way of revised return which was not granted by the Ld.AO.” Accordingly the issues raised by assessee in the present MP stands allowed. In the result the present miscellaneous petition stands allowed. Order pronounced in the open court on 04 th January, 2022. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 04 th January, 2022. /MS / Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore