M/s.IBM India Private Limited, Bangalore V. Assistant Commissioner of Income-Tax, Circle-3(1)(1), Bangalore

SA 10/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6191 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 10-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K V ARAVIND STAN DING
• Keywords: TDS
• Section: 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER A ND SH RI P AVAN KUMAR GADALE, JUDICIAL MEMBER SP NOS. 9 TO 12/BANG/2019 [IN IT(TP)A NOS.773 & 2041/BANG/2016, (IT(TP)A 625 /BANG/2017 & IT(TP)A 725/BANG/2018] ASSESSMENT YEAR S : 20 1 0 - 1 1 TO 2013 - 14 IBM INDIA PRIVATE LIMITED, NO.12, SUBRAMANYA ARCADE, BANNERGHATTA MAIN ROAD, BANGALORE 560 029. PAN: AAACI 4403L VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BANGALORE. APP L IC ANT RESP ONDENT APP L IC ANT BY : SHRI AJAY ROTTI, CA RESPONDENT BY : SHRI K.V. ARAVIND, STAND ING COUNSEL DATE OF HEARING : 01 . 0 2 .2019 DATE OF PRONOUNCEMENT : 01 . 0 2 . 201 9 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER BY THESE STAY PETITIONS, THE ASSESSEE SEEKS TO ST AY THE OUTSTANDING DISPUTED DEMAND OF TAX FOR DIFFERENT ASSESSMENT YEA RS AS FOLLOWS :- ASSESSMENT YEAR OUTSTANDING D EMAND (RS.) 2010 - 11 6 36,58,33,477 2011 - 12 7 11,45,62,089 2012 - 13 6 56,89,65,601 20 13 - 14 6 18,70,42,2 57 T OTAL 2 62 3 , 6 4 , 0 3 , 4 24 SP NOS. 9 TO 12/BANG/2019 PAGE 2 OF 4 2. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THESE ARE HIGH-PITCHED ASSESSMENTS PASSED BY THE AO WITHOUT GRANTING EXEMP TION U/S. 10A/10AA, DISALLOWANCE OF PAYMENT TO AE, DISALLOWANCE OF DEPR ECIATION ON LEASED ASSETS AND SHORT-GRANT OF TDS. HE SUBMITTED THAT T HE ISSUE RELATING TO GRANT OF EXEMPTION US/. 10A CAME UP BEFORE THIS TRI BUNAL FOR THE AY 2008- 09 IN ITA NO.1543/BANG/2012 AND THE TRIBUNAL VIDE O RDER DATED 20.12.2013 HAS REMITTED THE ISSUE TO THE FILE OF TH E AO WITH THE FOLLOWING OBSERVATIONS:- 3.86 AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE AO AS WELL AS THE DRP PROJECTED THE CLAIM OF TH E ASSESSEE FOR DEDUCTION U/S. 10A OF THE ACT ONLY ON THE GROUND TH AT THERE WAS NO RBI APPROVED BANK ACCOUNT OUTSIDE INDIA IN WHICH THE SALE PROCEEDS OF COMPUTER SOFTWARE EXPORTED OUT OF INDIA WERE DEPOSITED. THIS WOULD BE MATERIAL ONLY FOR TAKING THE BENEFIT OF EXPLANATION-2 TO SECTION 10A(3) OF THE ACT. THE AS SESSEE IS NOT BARRED FROM CLAIMING DEDUCTION UNDER THE MAIN PROVI SIONS OF SECTION 10A(3) OF THE ACT, WHEREBY IT CAN SATISFY T HE AO ABOUT THE RECEIPT OF SALE PROCEEDS OF COMPUTER SOFTWARE E XPORTED OUT OF INDIA BEING BROUGHT INTO INDIA IN CONVERTIBLE FOREI GN EXCHANGE WITHIN THE PERIOD STIPULATED IN THE PROVISIONS U/S. 10A(3) OF THE ACT. AS RIGHTLY SUBMITTED ON BEHALF OF THE ASSESS EE, DEDUCTION U/S. 10A/10AA OF THE ACT CANNOT BE TOTALLY DENIED. THE FACT THAT THE ASSESSEE HAS EXPORTED COMPUTER SOFTWARE OUT OF INDIA AND BROUGHT CONVERTIBLE FOREIGN EXCHANGE INTO THE COUNT RY IS NOT DISPUTED. THE QUANTUM HAS TO BE ARRIVED AT ON THE DEDUCTION WHICH THE ASSESSEE IS ENTITLED TO, HAS TO BE ALLOWE D. 3. ACCORDING TO THE LD. AR, THE ASSESSEE HAS A PRIMA FACIE CASE AND HAS PAID MORE THAN 50% OF THE ORIGINAL DEMAND OF TA X. HENCE HE PRAYED THAT ABSOLUTE STAY MAY BE GRANTED. 4. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT IN THE PRESENT ASSESSMENT YEARS, THERE IS A DISPUTE REGARDING EXPO RT OF SOFTWARE OUT OF INDIA AND BRINGING OF CONVERTIBLE FOREIGN EXCHANGE INTO THE COUNTRY. SP NOS. 9 TO 12/BANG/2019 PAGE 3 OF 4 HOWEVER, IN THE EARLIER ASSESSMENT YEAR, THESE FACT S WERE NOT DISPUTED AND HENCE THE RATIO LAID DOWN IN THE EARLIER ASSESSMENT YEAR CANNOT BE APPLIED AND OBJECTED TO GRANT OF STAY. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, THERE IS A PRIMA FACIE CASE IN FAVOUR OF THE ASSESSEE. HENCE, IN THE INTEREST OF JUSTICE, WE AR E INCLINED TO GRANT CONDITIONAL STAY. THE ASSESSEE HAS TO PAY 20% OF T HE OUTSTANDING DEMAND AS ON DATE BY WAY OF 2 INSTALMENTS AS FOLLOWS:- 10% OF THE OUTSTANDING DEMAND: ON OR BEFORE 15.02.2 019 10% OF THE OUTSTANDING DEMAND: ON OR BEFORE 15.03.2 019 6. NEEDLESS TO SAY THAT THE AO HAS TO ASCERTAIN THE CORRECT OUTSTANDING BALANCE OF DEMAND AS ON DATE OF THIS ORDER AND ACCO RDINGLY THE ASSESSEE IS DIRECTED TO MAKE THE PAYMENT AS INDICATED ABOVE. STAY IS ACCORDINGLY GRANTED FOR A PERIOD OF SIX MONTHS FROM THE DATE OF THIS ORDER, OR TILL THE DISPOSAL OF APPEAL, WHICHEVER IS EARLIER. THE APP EALS ARE FIXED FOR HEARING ON 02 ND MAY, 2019 (02.05.2019) AND THE PARTIES SHALL NOT SEEK ANY ADJOURNMENT WITHOUT SUFFICIENT AND JUSTIFIABLE REAS ON. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE. 7. IN THE RESULT, THE STAY PETITIONS FILED BY THE A SSESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF FEBRUARY, 2019. SD/- SD/- ( PAVAN KUMAR GADALE ) ( CHANDRA POOJARI ) J UDI CIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST FEBRUARY, 2019. / D ESAI S MURTHY / SP NOS. 9 TO 12/BANG/2019 PAGE 4 OF 4 COPY TO: 1. APP L IC ANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.