UE DEVELOPMENT INDIA PVT LTD V. THE COMMISSIONER OF INCOME TAX-III

ITA/195/2015

AI Insights

UE Development India Pvt. Ltd. filed an appeal under Section 260-A of the Income Tax Act, 1961, challenging an order from the Income Tax Appellate Tribunal dated 30.08.2013 concerning the Assessment Year 2004-2005. The appeal raised several substantial questions of law regarding the application of Chapter X of the Income Tax Act to transactions occurring entirely within India, the assessment of net margins of comparable entities, and the determination of arms-length pricing under specific contractual circumstances. The High Court of Karnataka, after considering the submissions and the precedents set by similar cases, dismissed the appeal, citing that the questions raised had been previously addressed and decided against the appellant in related cases.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 763220 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-07-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: NIVEDITHA THIMMAIAH
• Keywords: Arms' length price; Assessment Year 2004-2005; Income tax appeal; Income tax appellate tribunal; Transfer pricing
• Section: 260-A

Judgement Text

" 1/4 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 25TH DAY OF JULY 2018 PRESENT THE HON’BLE DR.JUSTICE VINEET KOTHARI AND THE HON’BLE MRS.JUSTICE S.SUJATHA I.T.A.No.195/2015 BETWEEN : UE DEVELOPMENT INDIA PVT LTD., #116, 702, 7TH FLOOR PRIDE HULKUL LALBAGH ROAD BANGALORE-560027 ALSO AT, ‘QUORUM’, #85, 7TH CROSS 4TH BLOCK, KORAMANGALA BANGALORE. REP. BY ITS COUNTRY MANAGER Ms. HAYATI BINTI TAMZIR. ...APPELLANT (BY MRS NIVEDITHA THIMMAIAH, ADV. FOR SRI K.ARUN KUMAR, ADV.) AND : 1. THE COMMISSIONER OF INCOME TAX-III C.R.BUILDING, QUEENS ROAD BANGALORE-560 078. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(5), BANGALORE. …RESPONDENTS (BY SRI K.V. ARAVIND, ADV.) Date of Judgment 25-07-2018, ITA No.195/2015 UE Development India Pvt. Ltd., Vs. The Commissioner of Income Tax-III & Another. 2/4 THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 30.08.2013 PASSED IN ITA NO.284/BANG/2012, FOR THE ASSESSMENT YEAR 2004-2005, ANNEXURE-A, PRAYING TO: 1]. DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THIS HON’BLE COURT. 2]. SET ASIDE THE ORDER DATED 30/08/2013, ANNEXURE-A, IN SO FAR AS THE ISSUES ANSWERED AGAINST THE APPELLATE IN PROCEEDINGS No.284/BANG/2012 FOR AY 2004-05. THIS APPEAL COMING ON FOR HEARING, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING: J U D G M E N T Mrs. Niveditha Thimmaiah, Adv. for Mr. K.Arun Kumar, Adv. for Appellant – Assessee. Mr. K.V.Aravind, Adv. for Respondents – Revenue. This Appeal is filed by the Appellant-Assessee purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, Bangalore Bench ‘A’, Bangalore, in IT[TP]A No.284/Bang/2012 dated 30.08.2013, relating to the Assessment Year 2004-05. 2. The appeal has been admitted on 07.02.2017 to consider the following substantial question of law: Date of Judgment 25-07-2018, ITA No.195/2015 UE Development India Pvt. Ltd., Vs. The Commissioner of Income Tax-III & Another. 3/4 “a] Whether the provisions of Chapter X of the Income tax Act can be applied to the subject transaction when there is no shifting of profits outside India and where all parts of the transaction occur only in India? b] Whether the Assessing Officer can take into consideration net margin of comparable entities without also assessing the expected net profit margin of the Appellant which arises considering the peculiar facts of the present case? c] Could the arms-length pricing determination be resorted to when the price at which the transaction was entered into by the Appellant was beyond the control of the associate entity which had already been awarded a contract at a predetermined price by the National Highways Authority of India? d] Can the TPO in making an assessment of the Arms-Length Price ignore the circumstances under which a contract was awarded to the associate entity, the price at which it was so awarded, losses suffered and the other surrounding circumstances?” 3. Learned counsel appearing for the parties submit that the appeals filed by the Revenue against the Date of Judgment 25-07-2018, ITA No.195/2015 UE Development India Pvt. Ltd., Vs. The Commissioner of Income Tax-III & Another. 4/4 order of the learned Tribunal challenged herein, has been considered and dismissed by this Court on 12.07.2018 in I.T.A. Nos.52, 53, 54 and 55/2014. 4. In view of the aforesaid submissions made by the learned counsel appearing for the parties, this appeal does not survive for consideration. Accordingly, the appeal stands dismissed. However, it is made clear that the rights and contentions of the Assessee are left open to be agitated in the appropriate proceedings, in the event of Revenue challenging the orders of this Court in the appeals referred to supra. Sd/- JUDGE Sd/- JUDGE NC. "