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TMI Blog2018 (7) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... e. - I.T.A.No.53/2016 - - - Dated:- 29-6-2018 - Dr. Vineet Kothari And Mrs. S. Sujatha, J.J. Mr. Jeevan J. Neeralgi, Adv.- For the Appellant Mr. Ankur Pai, Adv.- For the respondent JUDGMENT The Appellants-Revenue have filed this appeal u/s.260A of the Income Tax Act, 1961, raising purportedly certain substantial questions of law arising from the order of the ITAT, C Bench, Bangalore, dated 31.07.2015 passed in IT(TP)A No.1444(Bang) 2012 (GXS India Technology Centre Pvt. Ltd. vs. The Income-tax Officer) for A.Y.2008-2009. 2. The proposed substantial questions of law framed in the Memorandum of appeal by the Appellants-Revenue are quoted below for ready reference:- 1) Whether the ITAT is right in fact and in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5: The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and the Respondent-assessee, has given the following findings against Revenue with regard to various issues raised before it with regard to Transfer Pricing and Transfer Pricing Adjustments made by the concerned authorities below. We consider it appropriate to quote from the order of Tribunal rejecting the Application seeking a review before Tribunal as hereunder:- i) Avani Cimcon: 7.1 Thus, it was brought to the notice of the Tribunal that the said company is primarily engaged in the development of software products and particularly in customized software solution like DXchange, Carma etc. products. The Tribunal after consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... biotech and pharmaceuticals etc. This company has also incurred R D expenditure which is morethan 3% of the sales. Therefore, this company cannot be treated as functionally similar to the assessee for the purpose of determining the ALP. In support of his contention, he has relied upon the decision of the co-ordinate bench of this Tribunal in case of 3DPLM Software Solutions Ltd. (Supra). 9.1 On the other hand, learned DR relied upon the orders of the authorities below and submitted that the objections of the assessee were duly considered by the TPO/DRP and this company was found to be a good comparable of the assessee. 9.2 We have considered the rival submissions and the material on record. At the outset, we note that the functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PT at 15% is applied in a particular comparable then, this filter should also applied to all other comparables companies. The assessee has also disputed functional comparability of this company and contended that this company is engaged in the software product development. However, the relevant record has not been produced before us to show the functional profile and the revenue generated activity of this company. In view of the facts and circumstances of the case, we are of the considered opinion that the functional comparability as well as the applicability of RPT filter is required to be properly examined at the level of TPO. Accordingly, we set aside the functional comparability and application of the RPT filter to the record of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in (2015) 127 DTR 0327 (Kar), which has been affirmed by the Hon ble Supreme Court in the case of Commissioner of Income-tax, Central III vs. HCL Technologies Ltd., [2018] 93 Taxmann.com 33(SC). 5. The relevant portion of the judgment of the Hon ble Supreme Court in the case of HCL Technologies Ltd. (supra), is quoted below for ready reference:- 17. The similar nature of controversy, akin this case, arose before the Karnataka High Court in CIT v. Tata Elxsi Ltd. [2012] 204 Taxman 321/17/taxman.com 100/349 ITR 98. The issue before the Karnataka High Court was whether the Tribunal was correct in holding that while computing relief under Section 10A of the IT Act, the amount of communication expenses should be excluded from the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on 25.06.2018 (Prl. Commissioner of Income Tax Anr. Vs. M/s. Softbrands India Pvt. Ltd.,) has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable and the relevant portion of the said judgment is quoted below for ready reference: Conclusion: 55. A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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